What Is Business Intelligence – A Modern CEO’s Guide
Decision-makers have always made business-related decisions based on the information that they had access to. However, that information used to be severely limited, resulting in a lot of guesswork. These days, there’s no reason to depend on gut instinct or guesswork to make important decisions. If you have an online presence, then you have access to a massive amount of data relevant to your business. However, collecting, organizing, and analyzing that data into actionable insight is a whole different matter. This is where business intelligence (BI) comes in.
Definition Of Business Intelligence
Business intelligence allows companies to analyze their accessible data and to turn it into actionable intelligence. This information is presented in the form of dashboards, reports, charts, graphs, summaries and more, making it easy for executives, managers, and other decision makers to read and understand. As a result of BI, you will be able to make more accurate and informed business-related decisions. It’s worth noting that BI is different from competitive intelligence and business analytics, although all three processes should be used to help make the best possible business decisions.
Business Intelligence vs Competitive Intelligence
Competitive intelligence is about understanding your industry and your competition, and informing strategic decisions that can help your company to compete better. This is different from BI, which is more concerned with your company independent of your competition or place within the industry.
Business Intelligence vs Business Analytics
Business analytics is a process in which a software analyzes data and makes predictions about what will happen or what could happen should you perform certain actions. While business intelligence is certainly capable of predictive analytics, it’s more focused on revealing what the state of your business was, and what it currently is. Business analytics allows you to make decisions based on what could happen, whereas business intelligence allows you to make decisions based on what actually happened or is happening.
The Importance Of Business Intelligence
Business intelligence is something that every company should leverage due to the impact that it can have on how you use your data and how it can improve organizational efficiency.
As To Data
Collecting data won’t profit your company if you can’t analyze it and turn it into actionable insights, which is exactly what BI does. The following are just a few ways in which this can help to improve your organization:
- Improve your business decisions – The main goal of BI is to organize the massive amounts of data into structured insight that you can easily analyze. Then you can make important business decisions that are driven by actual data.
- Increase your ROI – You can increase your company’s ROI (return on investment) in a variety of ways using BI. For example, your sales personnel will be able to identify trends in customer behavior. They’ll also be able to track their own sales performance and activity to improve their timing in how to approach prospects as well as to identify potential up-selling and cross-selling opportunities.
- Develop more accurate strategies – BI can be particularly effective for implementing marketing strategies. Using BI, you can obtain in-depth analysis of past and current marketing campaigns that will provide you with insight you can use to develop more effective strategies in the future.
- Improve customer satisfaction – The use of BI will improve your customer service response, thereby improving their satisfaction. It will do this by providing employees (such as your customer service representatives or sales team) with access to updated overviews of each customer’s information, including previous purchases, ongoing service cases, and their place in the sales cycle. This information can be immediately accessed in real time to tailor and personalize your interactions as well as to better meet the unique needs of each customer.
As To Time
Business intelligence can help make your organization more efficient by saving time. This is because BI can be leveraged to share information across various departments within your organization, resulting in faster reporting. This helps reduce miscommunication, ensures everyone is on the same page, and reduces the time wasted on duplicate duties and performing tasks based on inaccurate information. Instant access to important BI information provides all departments with quick answers to pressing questions so they can get back to business.
How Does Business Intelligence Help Optimize Your Business?
The following are a few more specific ways in which the use of BI can help to optimize your organization:
Performance Metrics And Benchmarking
BI solutions typically provide the ability to benchmark industry KPIs (key performance indicators) as a way to measure your company’s performance on a variety of levels. By using performance metrics and benchmarking capabilities, you’ll put your company in a position to make incremental improvements by tracking your company’s performance over time.
Many business intelligence solutions provide extensive data integration capabilities, meaning that you will be able to collect and analyze data from various systems and tools. While there are many different types of analytics tools out there, BI solutions allow you to perform analytics in one centralized location — and you won’t need a specialist to do so since BI analytics are easy to run. The use of visualization will make your analytics easy to understand (and therefore, easy to act on) as well. There are three types of analytics that a BI solution can provide:
- Descriptive analytics – Descriptive analytics is the process of descripting a dataset using measures of central tendency and spread.
- Prescriptive analytics – Prescriptive analytics is the process of determining the best course of action based on the available data in order to optimize outcomes.
- Predictive analytics – Predictive analytics is the process of creating models that predict unknown events or forecast trends using statistical techniques.
Arguably one of the most useful features of BI is the ability to display the most relevant and important metrics on a single dashboard, accessible by your entire organization, specific departments, or only for a few decision-makers.
This means that your organization won’t have to wait an entire month to obtain business reports that outline the company’s performance and overall health. In fact, in addition to the always available dashboard, most BI solutions can generate customized reports whenever you need them. You can manually request reports to be sent out to stakeholders at any time or even automate the generation and distribution of reports based on a specified schedule.
Because BI makes it so easy to access important metrics, you’ll greatly improve collaboration across not just individual departments, but throughout your entire organization. For example, your sales department may be having trouble solving a particular challenge. By having access to important marketing metrics, they can potentially pinpoint an issue in marketing that can be causing the issue on their end. They can then communicate with marketing to solve the problem together.
Some BI tools make it easy to communicate quickly by offering additional built-in collaboration features, such as chat, annotations, and discussion threads. And many BI dashboards can also be accessed on mobile devices, making it easy for your organization to collaborate remotely both in and out of the office.
The efficiency of your business depends greatly on your knowledge management capabilities. Knowledge management is the process of organizing and managing the information and resources (which includes the process of collecting, distributing, and using your knowledge) within your organization. BI solutions help to strengthen your knowledge management by enabling you to integrate data across your organization and to not only analyze your data into actionable insights, but also to make it instantly accessible so that you can make better and faster decisions.
Business Intelligence Tools
There are many different BI solution vendors to choose from. Choosing the right BI solution for your organization depends on many different factors, including how complex your business operations are, how big your company is, what kind of features you need, and what kind of technology you’ve already implemented. For example, if you’re already using IBM or Oracle technology, you might want to consider just using their BI solutions. Other popular vendors include Microsoft, Tableau, Qlik, Sisense, and Information Builders, to name a few.
One thing to explore when comparing different BI solutions is the features that are offered. Some of the different features to consider when choosing a BI solution follow:
Online Analytical Processing (OlAP)
OLAP is a powerful data discovery feature that greatly enhances BI by providing the ability to analyze multidimensional data from several perspectives. With OLAP, you’ll have access to limitless report viewing, predictive scenario planning, and complex analytical calculation capabilities. It makes use of three analytical operations, including consolidation, drill-down, and slicing and dicing, and can be applied to numerous applications, including sales reporting, management reporting, marketing reporting, budgeting, financial reporting, business process management, and more.
Ad Hoc Analysis
Ad-hoc analysis allows you to answer a question that may not be specifically addressed by your BI dashboard. If a BI solution offers ad-hoc analysis capabilities, you won’t be restricted by the analysis of your existing reports. You’ll be able to answer specific data-based questions as well as obtain more details about specific accounts, records, or transactions beyond what’s shown on the dashboard.
Reporting features are essential to how user-friendly the BI tool is. Besides the ability to automate the generation and distribution of reports according to a customized schedule, look for reporting features that include interactive dashboards that update data in real time. Ad-hoc reporting features will allow users to generate their own reports on the fly without the need for technical expertise. Drag-and-drop features are particularly helpful as they allow your employees to create new reports with ease. The more customizable and user-friendly the reporting features are, the better.
Traditional analytics are used by BI solutions to measure performance. If you want your BI solution to provide predictive analysis (so that you can forecast future trends and behaviors) then you will need advanced analytics capabilities. Advanced analytics not only includes predictive analytics, but also data mining, machine learning, and big data analytics.
If you need to expand your business intelligence into operational areas of your organization, then you will need operational BI capabilities. There’s a big difference between traditional BI solutions and operational BI. Operational BI is more focused on transactional and operational data. Its analytics are more connected with common business processes in order to support operational decision-making and operations monitoring.
If your organization has an IT department with extensive IT expertise and experience, you may want to consider an open-source BI. Open-source BI is essentially a free BI software solution. Vendors who offer open-source BI solutions will provide the code for free, and will typically offer specific services for a fee, such as software support. Most open-source BI solutions support reporting, data mining software, dashboards, online analytical processing, data profiling, and data integration tools.
If your company doesn’t have a large IT department (or lacks an IT department altogether), consider a self-service BI. Traditional BI solutions require IT users that can handle complex systems. Self-service BI has user-friendly interfaces that can be tailored to the varying experience and skill levels of users throughout your organization. A diverse range of users can access and use your BI solution effectively without the need of IT expertise.
Choosing The Right Tool
Considering all the different capabilities and features that BI solutions provide, it can be a little challenging to determine which tool is the right tool for your business. Here are just a few things to consider when deciding what features will be useful and what you should look for:
- Who needs access to your dashboards?
How technically adept are your users?
How user-friendly do you need it to be?
Do you need complex reports or simple summaries?
Do you require daily email reports and alerts?
What is your budget?
How scalable does it need to be?
Are the reporting features dynamic?
What kind of security does the tool have?
Can you control access to the dashboards?
Does the dashboard update in real time?
Is the tool mobile-friendly?
Do you prefer an on-premise platform or a cloud-based platform?
What kind of integration capabilities does it have?
Business Intelligence Trends
BI tools are being used more and more to analyze every facet of a business, from marketing and customer services to sales. In fact, here are a few BI trends that have caught on in the past few years:
- Integration of Data and Content – More organizations are turning to their BI tools to analyze the performance of their content and to use that data to help optimize their content marketing campaigns.
- Operational BI – Whereas traditional BI solutions focus on aggregating data from different sources and consolidating it into complex reports, these reports can be difficult for the operational aspects of your business to act on. The use of operational BI has allowed organizations to make quicker and more informed decisions in the day-to-day operations of their business.
- Embedded and Conversational BI – Whereas traditional BI tools have required users to view separate dashboards, embedded and conversational BI allows dashboards to be integrated into different applications to display data relevant to that application. As you can imagine, this gives users more convenient access to relevant information, allowing them to work much more productively. Since instant access to relevant data can ensure that more accurate and informed decisions are being made on a minute-by-minute basis, it’s no surprise that embedded and conversational BI is catching on.
Real Life Examples
There are thousands of examples of how companies have leveraged BI tools to improve their business in a variety of ways. Even huge corporations have been impacted by the implementation of BI. Take for example Coca Cola. Before adopting BI, they used manual reporting, which severely limited their access to real-time sales and operations data. They were able to automate their reporting process by implementing BI, saving countless man hours. The use of mobile dashboards also provided their sales teams with access to CRM data that gave them actionable information while out in the field, giving them a significant competitive advantage.
The implementation of BI tools had a similar effect on Chipotle. A self-service BI platform gave them a centralized view of operations for over 2,400 worldwide locations. This made it possible to track the operational effectiveness of their restaurants on a national scale.
Strategies on Implementation
As useful as a BI solution will likely be, actually implementing a BI platform can be quite challenging if you’re not prepared. We’ll offer a few strategies that will aid you in the process of implementing a new BI platform.
Selecting a Platform
In addition to considering the specific needs of your company to determine what kind of features you want, you should also consider the vendors themselves. Do a little research into the reputation of the vendor to determine if they are trustworthy and reliable. You’ll want to make sure that they offer good customer service, and you may want to consider a vendor that you have an existing relationship with. This can make implementation a lot easier as well.
Selecting a Consultant
Just because you’ve invested in a comprehensive BI platform that is user-friendly does not mean that you can just load it up and get started right away. You will need to find a BI consultant who can properly implement your new solution with all of your existing systems, applications, and databases. A consultant will also help optimize your dashboard and ensure that your staff is trained so that they know how to use the BI tools at their disposal.
When hiring a BI consultant, make sure that they are familiar with the specific BI platform that you’re implementing as well as your source systems. Remember, not all platforms are the same. It’s also essential that they are able to communicate. Lackluster communication can result in a misunderstanding about what your priorities are. They should also be more than willing to address concerns and answer questions. Finally, they should have a plan for transition to ensure that you and your staff get the most out of the BI tools at your disposal.
Potential Problems You May Encounter
Obviously, the bigger your company is, the longer it’s likely to take to fully implement and integrate your BI platform. Smaller companies may face the challenge of limited resources. However, when not taking into account the size of the company, arguably the biggest challenge is software-related issues. Other potential implementation problems include unclear requirements and training issues. Many of these issues can be avoided by hiring a capable BI consultant and knowing exactly what your needs and priorities are.
When Should You Consider Business Intelligence For Your Business?
For big businesses, BI is a no-brainer. The amount of data that they collect throughout their organization simply cannot be properly organized, analyzed, or accessed (especially in real time) without a good BI solution. However, smaller business owners might be wondering whether BI is necessary or not, especially considering the cost. Eventually, you will need BI to help manage and leverage your data. Watch for some of these signs that it’s time to invest in a BI solution:
- You have no data organization strategy
- You’re not using data to make informed business decisions
- You’re depending on monthly reports for information about your company’s performance
Business Intelligence Empowers You And Your Business
Using business intelligence is an absolute must. The benefits of BI, which include the ability to make fast, informed decisions, improve customer satisfaction, provide more effective risk analysis, and help to improve organization-wide communication, can greatly enhance the performance of your business. Finding a solid BI solution is well worth investing in no matter how big your company is.
Do you need help with Business Intelligence? Our team of experts is more than happy to help.