Aug 15, 2016
Business Intelligence: Making Business Smarter
Business intelligence enables companies to analyze the past in order to come up with strategies to improve the future.
The term business intelligence refers to a variety of software applications that are used to analyze a company’s raw data.
Business intelligence can help your company cut cost, identify new business opportunities, and make better decisions. With the help of business intelligence systems, companies can identify processes that are inefficient and change them.
In the past, business people had to wait for IT to run complex reports in order to analyze company data. However, technological improvements to business intelligence systems have made it possible for anyone with access to the system to analyze data.
Thanks to business intelligence tools, also referred to as BI tools, many companies can back up their decisions with hard data. Although, ensuring that the data source for BI applications is clean can be a challenge for some companies.
When implementing BI systems in your organization, you need to make sure that your data source can be trusted.
The following is a short video which is a visual explanation of business intelligence:
What is Raw Data?
Raw data sometimes referred to as “source data” or “atomic data” is any data that has not yet been processed for use. Unprocessed data is not useful information until it is processed. Once raw data is processed, then it becomes useful information.
For example, let’s assume that you own an online store. Your store seems to be getting a lot of visitors and many of these people are regular purchasers of your products. These purchasers have accounts setup in your store.
You want to improve the experience that they get from your store. How would you do this? You may install BI software that tracks the buying behaviors of your customers. Most BI tools are able to make buying suggestions for your customers (cross-selling).
Essentially, the software in our example will be able to process the raw data that your website receives from the traffic that it gets, then transform that data into information that can help you sell more products.
Why is Business Intelligence Important to Organizations?
“BI is about providing the right data at the right time to the right people so that they can take the right decisions”.
Nic Smith with Microsoft BI Solutions Marketing
The seamless delivery and integration of relevant, as well as useful information within companies, are important for their long-term survival. Companies use BI to identify and monitor business trends, as well as detecting significant events that may lead to opportunities.
By providing BI training to your employees, you can improve the decision-making processes at all levels within your organization. Here are six reasons why BI is important to many organizations.
1: Understand Your Customers
BI allows companies to gain insights on consumer behavior. You can use this information to develop better products, cross-sell to existing customers, and ultimately improve profits.
2: Actionable Information
BI lets you convert raw data into actionable information. The information that you gather from BI tools can be used to identify suited opportunities and potential problems in your organization.
3: Improve Operations Efficiency
You can easily share information across different departments in your organization, which saves you time on analytics and reporting.
The easier it is for organizations to distribute information across different departments, the more efficient the organization becomes. Better efficiency often results in increased productivity.
4: Competitive Intelligence
Learn about your competitors and monitor their activities. There are intelligent tools that can do this for your company. Knowing what your competitors are up to is a good way to stay ahead of them and remain competitive.
5: Increase Sales
A BI tool such as a CRM (customer relationship management) will help you gather market intelligence that you can use to increase sales. CRM is software that manages and analyzes customer interactions with your business.
6: Improve Control
By using BI systems, you can improve transparency within your organization.
Do you have an error in your profit and loss statement? Are you missing some of your stock?
These are some questions that BI tools help organizations solve. Good BI is essential because it improves your control with important business matters like performance evaluations, inventory counts, and measuring profits.
What Kinds of Companies Use Business Intelligence Anyway?
Businesses that need to make strategic decisions such as what new products to add to their inventory, what products to remove, or which stores to close, need to use BI systems.
Restaurant chains like Wendy’s, McDonald, East Side Mario’s, use BI systems. Companies like Forbes, Ford Motors, and Toyota use BI systems to help them understand their customers.
So what kinds of companies use BI systems? Any company that has a need to understand the past so that it can serve its customers better in the future.
How to Implement Business Intelligence
Thinking of implementing BI in your organization? Before you do, you must analyze the way that your organization is currently making decisions and what information is needed to help your team make better decisions.
You also need to decide how you want the information to be delivered.
The BI system that you choose based on your needs has to give context as well. For example, a sales tracker is a sales tracker. However, a sales tracker that also tells you why your sales dropped or increased in a given day, is a BI system.
Are you the CIO (chief information officer) of your company? CIO’s have to ensure that they are aware of the feelings of others in the organization.
BI systems only work when they are used strategically. If an employee is uncomfortable with them or feels threatened by them, they will not use the system. This is the case for many other technologies.
What business intelligence software(s) is your organization currently using?
Let us know what you think about business intelligence tools and how it can affect your business in the comments below.