The volume of available data has continued to grow significantly over the past 20 years. A recent study concluded that big data has become an essential way for businesses to compete, discover new opportunities, combat inefficiencies, and attract new customers. Though many companies know how to collect data, they aren't quite versed in how to use it to their benefit.
An efficacious strategy is to implement different business intelligence technologies that harness data to monitor performance and deliver valuable insights to decision-makers. Read ahead to learn how to use business intelligence solutions in the workplace to improve productivity and increase profits.
What is Business Intelligence?
Originally defined in the 1960s to describe how information is shared across an organization, the term business intelligence has now become somewhat of a buzzword.
Business intelligence is best defined as a combination of all of the technologies, applications, and strategies used to analyze business data in the workplace. It is an integration of analytics, visualizations, and a variety of other tools that help an enterprise make informed business decisions.
A BI strategy is implemented when a company has an overarching view of its data and utilizes that knowledge to make changes that decrease inefficiencies and improve workflow processes.
Modern business intelligence tools allow users to conduct self-service analysis and manage information on a reliable platform that provides valuable insights.
Examples of Business Intelligence
Over time, BI has evolved to encompass a number of processes and tools that help to improve workflow processes.
Many use trial and error or combine one or more of these types of intelligence in the workplace-
Data Mining - The process of discovering patterns and trends in large data sets
Reporting - Providing data analysis to management so they can make better business decisions
Performance Metrics - Comparing historical and current data to track performance against targets
Descriptive Analysis - A quantitative summary of information
Querying - Requesting information from a set of data
Statistical Analysis - taking descriptive analysis results and performing further research to see why certain trends are occurring
Data Visualization - Utilizing charts, graphs, and other visuals to explain data analysis
Visual Analysis - Using storytelling to explain insights derived from data
Data Preparation - The process of collecting and organizing data to prepare for analysis
The Importance of Business Intelligence
BI systems are utilized to identify consequential events and track patterns so businesses can quickly adapt to any changes and overcome challenges.
A functional BI tool will enhance and refine decision-making processes throughout every department of an organization.
Implementing a business intelligence strategy also allows businesses to-
Analyze Customer Behavior Because of BI's capacity to collect and manage transactional and financial data, businesses can detect trends in their customers' purchasing habits.
This information is useful to help know which products to develop and how to best meet consumer needs. Acting on these insights leads to an increase in revenue over time.
Improve Visibility Business intelligence tools give organizations the ability to answer important questions. For example, who are the strongest team members? Which areas of the company need improvement? Why is there a decrease in revenue?
Instead of needing to sort through hundreds of documents to find the right answers, analysts can use a BI system to quickly find the information they need.
Turn Raw Data into Actionable Information A BI system is able to identify important trends in data that make it simpler to understand which areas of the company need improvement.
Decision-makers can then use these insights to create strategies that increase revenue, streamline workflow processes, and improve efficiency.
Utilizing an effective BI tool allows stakeholders to pinpoint opportunities for growth and generate constructive plans to carry it out.
Improve Efficiency A business intelligence system allows workers to share information across various departments.
Because everyone is better informed, there won't be as much replication of duties and roles. Furthermore, there will be an improvement in the reliability and functionality of data because everyone is up to date on what needs to happen to complete a project or task.
As a result of the ease of information sharing, there will be an increase in worker productivity and efficiency.
Increase Sales and Market Knowledge Tracking customer activity is an essential part of running a business. A customer relationship management database (CRM) is a type of BI system that manages all of the company's interactions with its clients.
A CRM collects customer data and presents this information in the form of charts, graphs, and other visuals. This software allows businesses to have a comprehensive view of their customers' demographics, what they like to purchase, and how much they are buying.
The marketing team can use these insights to create targeted campaigns for current and prospective clients. As a result, it will be easier to reach sales goals, increase revenue, and improve customer service.
Improve Competitive Advantage With current information at its disposal, businesses have accurate insights that predict future sales and market trends.
This real-time data is also useful because it can be used to increase productivity, efficiency, and the bottom line.
Businesses can also employ a BI system to analyze historical and current financial/sales data and find areas of waste that hinder the ability to compete.
Ways to Improve Your Business Intelligence
Many organizations are spending time and money implementing a BI solution but are not achieving the benefits they should be.
Without creating a strategic plan to govern large quantities of data and weed out the unimportant information, businesses aren't deriving as many valuable insights that are useful for improving performance.
Here are the most effective ways to improve a BI strategy and leverage data-
1. Develop a Holistic Approach A BI project's success depends on three factors- ownership, acceptance, and connection. The IT department should not be the only one handling a business intelligence tool.
Management and any decision-makers need to be the ones taking ownership of the BI strategy, as they are the people who will most frequently use it.
Management also has to accept that they are not the only ones who should be running reports because the information at their disposal doesn't always convey a complete picture of what's happening in the company.
Employees should be well-trained in how to find the data they need to do their jobs. They should also know how to run reports by themselves.
Finally, businesses need to recognize the importance of connecting a BI solution to a long-term strategy that improves performance across all departments.
To carry out these elements, take the following into consideration-
Begin with the needs of the users and owners of the data, not with the possibilities the technology offers.
Create a sound information infrastructure that prioritizes the important key performance indicators. Collect, manage, and track information with the goal of improving the ability to meet key objectives.
Dedicate resources to collecting quality data rather than purchasing the most expensive piece of BI technology available.
2. Link Data to Business Goals and Pick Valuable KPIs The data collected needs to be relevant to the organization's business goals. A business intelligence strategy should coincide with a performance strategy.
KPIs measure the success of an organization, or how well a certain business activity is carried out. Picking the correct key performance indicators is essential to know which type of data to collect.
Because only 23% of enterprises pick key performance indicators that are relevant to achieving business goals, a lot of workers are rewarded for reaching performance objectives that aren't very relevant.
Furthermore, BI systems are being used to collect and manage data that doesn't help to achieve organizational goals.
To pick relevant KPIs, try utilizing the SMART method-
Specific The KPI should be a goal that drives action
Measurable A KPI should be measurable
Assignable Goals and the metrics that track them should be assigned to a person or team that can monitor and follow-up on them
Relevant The KPI should be relevant to the growth of the organization
Time-Bound Every goal should have a target completion time or date
3. Reevaluate the BI Platform and Save Money A quality self-service business intelligence solution is not just a standard software purchase, but a small piece of a larger puzzle whose purpose is to improve performance across all levels of an organization.
Good analytics software contains a variety of applications that have the capacity to extract and cleanse information from different data warehouses.
Make sure to avoid paying unnecessary costs when installing the IT architecture for any intelligence tools. It isn't essential for the IT department to utilize an overabundance of applications to ensure a successful BI strategy.
By combining different elements of business intelligence into a few tools, businesses can dramatically reduce the costs of IT architecture.
Business Intelligence vs. Business Analytics
Though sometimes used interchangeably, business intelligence and business analytics are two separate terms that have different meanings.
Business intelligence tells what events or processes are occurring in real-time and which historical events triggered them.
Analytics is an overarching term for various data analysis techniques that predict what will happen in the future (predictive analytics) and what should be done to create a better outcome (prescriptive analytics).
The purpose of an intelligence system is to give a picture of the current state of the company to decision-makers and management. Business analytics requires data analysts to study and interpret information on an in-depth level.
While data analytics is useful for experts who understand how to drill down into data and derive insights, business intelligence tools are better suited for everyday workers and management.
In the past, the IT department was usually the only one who used business intelligence systems. As these technologies have evolved and become more intuitive, everyday workers are now equipped to share information and generate reports with ease.
Why You Should Invest in Data Analysis for Better BI
Organizations that take their BI strategy seriously should hire an in-house data analyst that knows how to drill down into valuable information.
A qualified data analyst will utilize all of the elements of BI tools to collect important data that shows revenue loss, inefficiencies, or departments that aren't as productive as they could be.
Data analysts also ensure that the collected information is relevant and consistent, which includes finding and cleaning information from other databases. The primary purpose of employing an analyst is to find ways to save money and increase revenue so the company can stay competitive and improve the bottom line.
Data analysis gives greater insight into business activities while demonstrating the correlation between an action and an outcome. It helps business owners know which processes and tasks to complete today so sales and revenue can increase tomorrow.
While business intelligence solutions are great for reporting what happened, data analysis is needed to show why it happened. Both of these components are necessary to gain the most value from the data that gets collected. Standalone reporting doesn't deliver the same value as it does when an analysis is conducted as well.
Here are the key points to remember about business intelligence-
BI is a combination of tools and strategies - Business intelligence encompasses all of the strategies, tools, and applications needed to analyze data and generate insights. Its purpose is to help management and workers make better business decisions.
There are many types of BI tools Business intelligence is an overarching term that encompasses a variety of applications. These include data mining, reporting, performance metrics, descriptive analytics, querying, statistical analysis, data visualizations, visual analysis, and data preparation.
Know the importance of incorporating a BI Strategy A quality BI strategy assesses customer behavior, improves visibility, turns data into actionable information, improves efficiency, increases sales and market knowledge, and improves competitive advantage.
Make improvements to a BI strategy To make improvements,develop a holistic approach, pick valuable KPIs, and pick the right BI platform.
Business intelligence vs. analytics Business intelligence describes a real-time event while analytics delves into why an event happened.
Data analysis is an essential component of BI While reporting alone is helpful, data analysis will drill down further info information to gain actionable insights that promote better decision-making throughout the organization.