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How can multidimensional analysis help the company?

How can multidimensional analysis help the company?

Given an increasingly competitive market, several enterprises have been looking for solutions that ensure more accurate decision-making and more efficient planning. In this context, the use of techniques and tools that allow the manager to have a clearer view on the real situation of the company is indispensable. For this reason, knowing how multidimensional analysis works, for example, is essential to help you in this process.

That is because multidimensional analysis allows you to have access to information about your business in a clear and objective way. The advantage of this is the ease of identifying what has generated good results and what needs to be changed in the management system. Knowing the importance of this subject, we have prepared this article to show you how this tool can contribute to the growth of your company. Check it out!

What is multidimensional analysis?

Multidimensional analysis is a resource that allows you to assess your company’s data from different points of view. For this reason, the information is organized by hierarchy, in order to make the study of these data easier. As such, we understand that a hierarchy is part of the different levels that make up a dimension, which is nothing more than an analysis unit.

To better understand how multidimensional analysis works in practice, we can mention regions as an example of dimension. After all, for the manager to create efficient strategies that will actually attract the target audience, it is necessary to analyze several characteristics that make up the customer profile, such as their region.

In this case, the region is considered as a dimension whose hierarchical levels are divided (and organized) by countries, states, cities and areas of operation. Thus, in a company, there are several dimensions (such as products, time, customers, production, etc.) that not only can, but should be analyzed together, by multidimensional analysis, in order to obtain better results.

After all, multidimensional analysis allows the manager to cross one or more dimensions. A clear example of this is the development of a product that meets the needs of the public in a given region and, after its release, the possibility of analyzing the time it takes to sell it.

In other words, by checking the way in which multidimensional analysis organizes data, the manager is able to identify which products sold the most within a certain period, in which region it had the best output, and which sales channel was used to generate this return.

The access to this information ensures a more accurate view of the company’s real situation. The advantage of this tool is the ability to identify failures and improvements in the management system, in addition to providing quick answers to unexpected situations.

How can multidimensional analysis be used in company costs?

As we mentioned, the current market is increasingly competitive, resulting in a reduction of prices due to the amount of supply available. Given this reality, entrepreneurs have been forced to adapt to the new way of doing business, in order to guarantee their permanence in the segment in which they operate.

After all, a few years ago, the consumer had to make do with the few offers that existed and accept the value that the supplier determined. Nowadays, consumers have become the main negotiating agent. This means that, in many situations, they are the ones who will determine how the sales process will be done.

In other words, this action provides more autonomy and a better purchase decision to the customer, as prices will be defined by them. Faced with these changes, the company, before establishing the value of its product and/or service, needs to understand how cost management works and how it affects its decisions.

Therefore, the use of multidimensional analysis is essential to ensure a more efficient cost management. This is because it will help you determine the company’s profitability, as it takes into account all your expenses and costs. That is, it crosses dimensions related to the product, the customer, the demand, the region, etc.

Through this action, you have in your hands a complete and accurate report on the company’s real financial situation, with the advantage of being able to identify expenses that can be eliminated and, above all, reduce other expenses without having to give up quality and efficiency.

How to do a multidimensional cost analysis?

Multidimensional analysis is a tool that works in a very similar way to a pivot table, in which you enter the information that will be useful for the analysis. For this reason, it is extremely important to define the dimensions according to the characteristics of your own business.

Therefore, it is possible to do multidimensional analysis by online analytical processing (or OLAP). This database technology allows you to analyze data from different angles, as it is a tool that provides a transactional database that is stored in cubes by Data Warehouse.

It is worth mentioning that, in addition to allowing a more accurate data analysis, OLAP also uses hierarchy to organize information. As a result, access to data is made more efficiently and quickly. Thus, the tool provides two basic types of data:

  • the measures – refer to the numerical data, the quantities and the averages that you use to make your decisions;
  • informed dimensions – refers to the categories that are used to organize the measures.

The way in which the analysis is carried out will vary according to the objective and the particularities of each company. In most cases, it is necessary to make several analyses to check the results, in order to guarantee the improvement of the management.

Thus, we saw that multidimensional analysis is a tool that contributes (a lot!) to your company’s growth, as by using it, you will have a broader view of your business. This action favors the identification of failures that often go unnoticed, eliminates unnecessary expenses and, above all, favors the healthy development of your business.

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