Business intelligence (BI) is a combination of the company’s business analytics added with data mining along with data visualization, data tools as well as infrastructure. It also includes the best practices that will help organizations in making better data-driven decisions in the future.
Companies know they are using modern methods of business intelligence when they have a comprehensive and overall view of their organization’s data. Then they use this data to drive change in the company, eliminate inefficiencies, and then manage to adapt to market changes or changes in supply quickly.
Business intelligence has evolved over time and now it includes even more processes and activities that will help them improve their company performance.
These processes are:
- Data mining uses different existing databases, statistics as well as machine learning to help companies discover trends in large datasets.
- Reporting means the stakeholders get the data analysis gathered so that they are able to make decisions and draw conclusions.
- Performance metrics and benchmarking is used to track performance against goals by comparing the company’s current performance data to it’s historical data while using customized dashboards.
- Descriptive analytics is when companies use their preliminary data analysis so that they can find out what happened.
- Querying involves asking the data very specific questions.
- Statistical analysis is the process where companies take the results from descriptive analytics and then continue to explore the data using statistics that track the reasons why a trend happened and how it took place.
- Data visualization takes place when companies turn the data analysis into visual representations. These representations can be in the form of charts, graphs, and histograms so that the data can be consumed more easily.
- Visual analysis is a way for companies to explore data through visual storytelling. This can be of big help in communicating insights on the go and staying with the flow of the analysis.
- Data preparation is when the organization compiles all their data sources and then identify the dimensions and measurements, so that all of it is ready for data analysis.
Why is business intelligence important?
The biggest reason why business intelligence is so important for organizations is because it can be of big help for companies in making better decisions. This is done by showing all existing and historical data that comes within their business context. This way, it becomes possible for analysts to leverage their BI and provide performance and competitor benchmarks. This will help in making the company run smoothly and improve its efficiency. By using business intelligence, analysts can also spot market trends more easily which will help them in increasing their sales or revenue. When the right data is put to use in an effective manner, it can help the business with nearly everything, from compliance to hiring efforts.
Here are a few ways in which business intelligence helps organizations improve their working processes and make smarter, data-driven decisions:
- It can identify different ways to increase company profit
- Business intelligence helps in analyzing customer behavior
- Analysts can now compare data with their competitors
- It helps in keeping track of performance
- You can also optimize all company operations
- It becomes easier to predict success
- Analysts get better at spotting market trends in the future
- Companies can now discover issues or problems more easily
How business intelligence works
All businesses have goals they need to achieve. They also have a lot of questions they need to answer, as well as track their performance against the goals they have set. To be able to do this successfully, they need to gather all the necessary data that is required. After which, they need to analyze it and then determine the actions they need to take so that they are able to reach their goals.
When it comes to the technical side of business intelligence, companies need the raw data that is collected from the activities the business does. This data gets processed and then stored in data warehouses. After the data gets stored, it becomes accessible to users so that they can begin with the analysis process and then eventually answer business questions.
How BI, data analytics, and business analytics work together
Data analytics and business analytics are both a part of business intelligence, but they are not the entire process. Business intelligence can be used to help the users in drawing conclusions from data analysis. This is why data scientists need to dig into the specifics of the data that has been collected. They do this by using advanced statistics as well as predictive analytics. This helps them in discovering various patterns and also forecasting future patterns. When companies conduct data analysis, it is usually to find the reason as to why an occurrence took place and what are the possibilities of it taking place again in the future, and what other things can take place in the future. Business intelligence takes these models and algorithms collected through data analytics and breaks down the results into actionable language for the company to use.
Companies conduct business analytics as a part of their bigger business intelligence strategy. Business Intelligence, however, is created so that it can answer very specific queries and then provide analysis that is easy to understand so that the company can make plans or decisions. But, companies can also use data analytics to improve their iteration and get their follow up questions.
The process of business analytics should not be one that is linear. This is because when you answer one question, it usually leads to another follow-up question, then more and more. Instead, companies should think of business analytics as a cycle that begins with access to data, then the discovery, exploration, and finally sharing of information. This process is called the cycle of analytics. It is a modern terminology that explains the way companies use analytics to react to the constantly changing questions and expectations.
The Benefits of Using Business Intelligence in an Organization
Improve Competitive Intelligence
Companies can improve their competitive edge when they use business intelligence. This is done by using the data collected effectively and turning it into actionable information. When companies utilize business intelligence solutions, they make their data more accessible to their authorised users and then allow them the interaction with other competitive intelligence. All of this is done from one secure, which is the data warehouse that is managed centrally. This way, organisations can take more strategic decisions. This is done by utilizing the gathered information quickly and then accessing this information in different and effective ways.
Improve Market Intelligence
After companies enhance their competitive intelligence, they can use the Business Intelligence software to gather market intelligence. When organizations use business intelligence tools, they can analyze their data in a better fashion. These tools include the following:
- Identifying customer insights
- Buying patterns
- Monitoring customer behaviour
- Predicting market trends
All this information is readily available with business intelligence tools from one centrally located source. By using this information, businesses can become more responsive to the changes that take place in the marketplace. This way businesses and their owners can plan and improve their production unit. By improving their production unit, organizations can optimize their product manufacturing, which will help them reduce their wastage. If companies use their Business Intelligence effectively and intelligently, they can also improve their market intelligence in a lot of ways.
Data Integration
Most businesses store their data in various forms and over a multitude of solutions. This way, data analysis and reporting becomes a lot more complex and also more challenging. When you employ business intelligence solutions, it can lead to reducing complexities that exist with the data that is locked within different software and spreadsheets.
The Business Intelligence tools integrate all the data that is present in the workplace in many different forms. This is done directly with their existing software solution, and then the real-time data gets leveraged, all of this to provide a more robust view of your business operations. When your business intelligence solution is completely integrated, it becomes a lot simpler to achieve success for your business.
Effective Business Model
When companies have gathered and integrated all their data and collected enough market insights, along with the statistics of customer buying habits, as well as the competitor market strategy, it becomes obvious for the company to focus more on making their business model a more durable one and also more result oriented. Business Intelligence helps companies in making analysis of the company’s own data and also take into consideration all the external business information that exists.
Business intelligence has become significantly more effective because of the revolution of ecommerce. Everything people and consumers need is not more than a click away, which means business owners have to be extremely careful in their product placement as well as studying existing market trends and investing their funds at the right place and time for all their marketing initiatives, as well as evaluating their efforts. Business Intelligence helps businesses in building a way more effective business model as compared to just simply doing guesswork and making predictions.
Customer Insights
Business intelligence can integrate business processes into a single and centrally managed solution. This includes customer insights as well. All the customer data from CRM, social media campaigns, email marketing campaigns and website engagements can be traced in the company’s data management platform. This can also be monitored from an integrated dashboard so that businesses can keep a holistic view of all their customers and their interactions with the business.
This becomes extremely important for businesses because there has been a significant increase in the customer interactions across many platforms and channels. Consumers or potential consumers use the company’s website, their social media platforms, live chat tools as well as emails to interact. Companies need to interact with their customers in a more informative and effective manner. When companies study the given data by their business intelligence solution, it can improve customer engagement through social media, other marketing processes and direct contact with customers.
Personalized Sales Strategy
It is very important for the sales and marketing teams to understand the businesses they work with. Sales teams need to know the different aspects of the company before they pitch to them, such as:
- Annual turnover
- Sales numbers
- Merger information
- Competitors
- Trading policies
- Outsourcing partners
The information is available easily when the company is traded publicly. If the company is not public then you have to find out on your own.
Business Intelligence helps in improving the sales strategies by making them more composed and effective. Sales teams need to understand the lead’s business before they pitch to them. BI tools give companies all the related data to the company’s annual turnover, their budget plans as well as plans for expansion, their sales numbers, their competitors and more.
The future role of business intelligence
With business intelligence, you can also calculate the ROI of all marketing strategies, get a holistic view of your business, improve the decision making and save time.
The process of business intelligence is evolving constantly. This is based on various business needs and technology. Each year, business intelligence solutions need to identify current trends and keep their users updated on recent innovations. Artificial intelligence and machine learning will always continue growing, which means that businesses can integrated their insights form their artificial intelligence into a broader business intelligence strategy. All companies always strive to more data-driven in today’s world. They are putting more effort in sharing data and collaborating across teams. The data visualization will become even more important when it comes to working together across teams as well as departments.
Business Intelligence comes with various capabilities that help with near real-time sales tracking. The solutions also allow their users to discover insights into the behavior of their customers. It will help in forecasting their profits and more. There are a lot of industries such as retail, insurance, and oil that have adopted Business Intelligence already and a lot more industries are joining every year. Business intelligence platforms are constantly evolving to adapt newer technology and the innovation of its users.
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