Business Intelligence (BI) describes technologies, applications, strategies & practices that are used to collect, analyze, and integrate other pertinent information to allow businesses to take informed and strategic decisions related to them. Businesses can leverage critical information and extract meaningful insights from old and current data. This is made possible by the use of business intelligence tools, which process big data sets from various sources and deliver the results and insights in visual forms that are easy to understand and take action on.
Let’s illustrate departmental-specific examples regarding the use of BI:
- Human resources– The HR department can reap benefits from BI implementation by utilizing productivity analysis, compensation, payroll tracking & other insights into employees.
- Finance– BI can provide valuable and in-depth insights into financial data. It can help track budgets, identify potential financial problems, and help improve the overall organizational business health and financial stability.
- Sales– By predicting sales cycles and analyzing the conversion rates and income, BI can help increase sales. It can show what works for the company and what does not which can help in enhancing sales performance.
It keeps track of the customer data and provides a better understanding of their interaction with the company. Such analysis can help resolve customer issues and also leverage sales with tailored messages.
- Marketing– BI solutions can help marketing teams to develop better campaigns that can generate higher ROI by providing analytics on current and previous campaigns. It can also provide metrics like customer acquisition cost (CAC), cost per lead (CPL), along with campaign click-through rates (CTR) which are essential for successful marketing campaigns.
Some of the tools and software used for Business Intelligence are
- Spreadsheets- Microsoft Excel and Google Docs are some of the most widely used BI tools.
- Reporting software- It’s used to report, organize, filter and display data.
- Visualization software- Data visualization software translates and transforms data into visual graphical representation for easier and simpler interpretation.
- Data mining tools- These tools dig into big data and data streams to find patterns and trends using artificial intelligence, machine learning and statistics.
- Online analytical processing (OLAP)- These tools are used to analyze datasets.
Let’s take a look at some of the advantages of business intelligence and the importance of BI in organizations;
- Enhanced decision-making capabilities: Today, companies track and analyze KPIs and business metrics from several data feeds. BI helps in accelerating and improving business decisions by giving a very comprehensive view of the business data and by generating visual insights offering a better and enhanced understanding of the data available.
BI helps in monitoring performance at a peak level and can return results in a visual format facilitating better understanding for decision making. It highlights business trends and can identify potential KPIs to be tracked.
- Better organizational efficiency: Efficiency often gets negatively impacted when the data is manually analyzed to create reports. With numerous data sources in various formats, the probability of error increases along with lag in reporting, resulting in impacting the decision-making process.
Using BI, the data is sorted, processed, and analyzed and visual reports are generated faster giving better insights for taking decisions and generally increasing efficiency.
- Productivity: Using business intelligence companies can reduce or eliminate bottlenecks, daily tasks can be automated, business processes can be refined & generally have better organization. Since data is processed centrally, the management is in a position to take decisions based on it and can direct teams for increasing productivity.
- Reporting: Companies can use BI to track KPIs for sales, operations, and finance by using customized reports generated from various data streams. Accurate reports including visual reports are generated in real-time using various data streams and companies can utilize these reports to make faster decisions. Interactive real-time reports give more detailed blow-by-blow accounts while variables can be added or removed to gain better insight.
- Identifying trends and patterns: One of the benefits of business intelligence is that it can be used to make informed decisions that are based on hard data analytics. Technologies using data analytics help companies spot trends and patterns that ultimately help optimization of resources and processes.
- Sales and marketing: Customer retention and the development of new customers is the goal of any business. Using BI and tracking the trends and patterns, sales and marketing teams can get a detailed analysis of customer profiles who make significant regular purchases and which kind of profiles can be targeted for increasing sales. BI can help sales and marketing teams track and evaluate promotional activities and also determine which campaigns work well. Such reporting helps companies make decisions on budget allocation, and plan sales pitches and campaigns to achieve higher sales and increase revenue.
- Upgraded customer experience: Organizations using business intelligence can better understand and give enhanced services to their customers from data collected from different sources like user behavior, purchase history, customer surveys, chat histories etc. Insights given by visual representation can help an organization provide better service and upgrade the customer experience.
- Performance and revenue: Companies focus on increasing their performance to generate higher revenue. Using business intelligence to further this goal gives an organization the tool to generate more revenue through performance. BI gives critical insights into customer behavior which helps in determining marketing strategy for increasing sales. It also helps in identifying opportunities. Since BI collates different data streams and reduces data redundancy, reducing costly inefficiencies, and increasing productivity. This translates into optimizing profits.
- Removing guesswork: Earlier companies did not have access to complete data and collating data sometimes led to human error and resulted in some guesswork or approximation for making decisions. BI has eliminated all this by collating the big data in a centralized way and generating reports that help eliminate the guesswork or approximation for decision making and increase the competitive advantage.
The adoption and use of BI have increased significantly due to the Covid-19 pandemic as more and more companies resort to remote work and accessing data remotely is the key to making informed decisions. The benefits of using business intelligence make it an important tool for businesses today and in the future.
We can conclude that using business intelligence is an effective business strategy. The advantages of business intelligence offer help in improving revenue, increasing productivity, reducing or removing bottlenecks, and enhancing customer experience.