There is no business that likes to leave money on the table. It’s tempting for companies to try to squeeze as much output as possible from their workforce. The issue with this approach is that it's not sustainable. Stressed out employees get burned out easily.
Too much data, demand, and digital elements—while also an enormous source of growth—can contribute to increasing work stress. A key solution to fight this business crisis is to deliver more intelligence to work.
If you're a business owner, business intelligence lets you make intelligent decisions by using data to generate desired business results, saving you from squandering time, resources, and energy.
Business Intelligence in a Nutshell
Business Intelligence (BI) pertains to a variety of tools, programs, technologies, and practices. These are used to collect, integrate, measure, analyze, and present raw information to generate insightful, valuable, and actionable business data.
BI provides a range of techniques and systems that make it easy for your business to:
These all aim to generate analytical results that will be available to both your company's executives (decision-makers) and employees (operational workers). BI tools and programs are used to glean important details such as market trends, internal insights, and parallels in lost opportunities.
You can also use business intelligence to:
Evaluating which work makes the most significant impression becomes a struggle for organizations without business intelligence.
How Does Business Intelligence Work?
Technically, business intelligence is not new technology. Modern BI descends from the foundation of the Decision Support System (DSS) in the mid-’60s. It took about three decades before BI achieved widespread approval. Today, it has become an effective tool in all kinds of businesses.
So, how does business intelligence work? The simple answer: by using a data-capture process, pieces of information are obtained from several sources and documented in a database specially designed for your business.
The final BI output presented is visual, but to completely understand how BI works—and to fully maximize its benefits—you need to go back to the fundamentals of the process: the data. This area is often the realm of the company’s IT department, but as a business owner or executive, you need to know its workings so that you can apply BI more effectively and accurately when you market your product or service.
Examining your data goes as follows:
Understand your data
First, analyze your data sources. Where does your data come from? Is the data structured or unstructured? Is it in Excel sheets or an SQL database? You need to have decent data sources, with the data stored properly. The data also needs to be complete before you begin analyzing it for assessment.
When you have all your data at hand, you can integrate all that information together. This is where business analytics tools, data mining, and (sometimes) real-time decision-making come in. Tables in your data sources need to be built then linked together so you can start analyzing them and draw value out of all that information.
When the analysis shows up, the ability to generate insights takes place. This is the part where you dig deeper into the data to extract meanings out of the numbers. This is also the phase where you can do text mining, to evaluate your website and other external resources.
When you've extracted the data, you can start scaling. You review your data to understand how your business is arranged, how the data courses through your business, and how your business practices work. Is your shipping on time? Does customer support work fast enough? Do you have the right inventory when needed?
When all the data is accumulated, measured, and assessed, presentation is the final stage. This is where visualizations are built in the form of team scorecards, dashboards, or graphs for your users.
Business intelligence is a great deal more than just a visualization tool. It is a process and a way to use your data to help you make informed decisions. BI is an effective strategy to view the behind-the-scenes of your business so you can manage operations successfully.
Who Uses Business Intelligence?
As businesses continue to use various systems to attain a competitive edge, BI has turned into a buzzword—but who really can benefit the most from business intelligence?
Senior Executives, Department Managers, Sales Reps
An effective BI tool is designed to be used by all company employees, from senior executives to department managers to sales representatives. It gathers data from all disparate programs and presents complete insights in a single, secure place. Employees from a specific department can access the data relevant to their position and determine actionable insights distinctive to their domain.
On an executive level, business intelligence gives a clear and detailed picture of the overall performance of your company. Executives can customize their BI tools’ dashboards and individualize the metrics that are pertinent to their specific needs. They can get readily available, updated data to help them create fact-based plans, which helps them ensure that they make crucial decisions based on acquired data instead of instinct alone.
BI is a very reliable tool in managing stock and inventory activities. Streamlining the company's supply management goes a long way in reducing costs and preventing losses. Business intelligence offers the ability to see precisely how much product you have available as well as the sales history of that stock. This data allows your inventory manager to maintain correct stock levels. Using this information, your purchasing manager can load a stockroom with enough products to meet the demand without overstocking. By averting overstock, company capital can be used elsewhere. Furthermore, the risk of unsold stock is prevented.
The state of the company's finances is an important aspect of any organization. With BI, financial supervisors and accountants can easily access financial statements to assess and investigate your company's financial health. With a complete view of the figures, the financial department can discern which areas need improvement. Through in-depth data, they can also create better financial strategies.
Your marketing team can use BI to discover trends and facilitate the rollout of marketing campaigns. BI tools can likewise measure the effectiveness of a finished campaign. Having a complete review also enables the marketing team to optimize the company's advertising budget.
Statisticians by nature, data analysts use BI data to gather fresh insights that can be used to underscore new business strategies.
IT is yet another key participant in the realm of business intelligence. With BI tools, IT can work better and closer with other departments to ensure that the latter gets the most from data analytics. IT also helps in bridging the gap between subdivisions to maximize BI adoption across the board.
Real-life examples of multinational companies that use BI in their business strategies include:
Starbucks – Through Starbucks' Loyalty Card program, the company accumulates individualized buying information from millions of customers. Using the data, the coffee company is able to anticipate what products and promos an individual customer might consider buying.
Why Is BI More Popular Today?
In the last decade, business intelligence has been transformed, modernized, and revolutionized. Data has gotten so big, it basically exploded, and data visualization plays a large role in this explosion.
While spreadsheets are still prevalent, they took a backseat to interactive business intelligence dashboards. The surge of self-service analytics opened and boosted the data product chain. All of a sudden, advanced analytics weren’t exclusive to analysts anymore.
2018, in particular, observed a substantial boost in the BI field. A significant number of BI trends were presented, and will continue to be valuable through 2019. Business intelligence is also at the peak of its popularity because of its capacity for customization.
BI popularity skyrocketed because detailed and secure data merged with straightforward and effective presentation.
What Are the Benefits of Using Business Intelligence?
When it comes to BI, the saying "work smarter, not harder" is emphasized to a T. Your company will get a ton of benefits from using business intelligence. To name a few, your company can:
1. Obtain useful insights into your business
BI software regularly gathers and evaluates data to provide actionable insights for your business. Your employees can produce reports on an assortment of information such as expenditures, operations, workforce, and customer support. BI reports also present the relevance of information. Your business can take better action based on the information that BI reports.
2. Visualize pertinent details
Pedestrian work evaluation can be hard to translate. This can reduce the ability of any company to identify and address key metrics. Among the major advantages of BI is that it delivers exceptional data visualization. This enables users to generate easy-to-understand, intuitive data visuals. Humans are visual creatures, and graphics, charts, images, videos, infographics, and animations are more engaging ways to translate information compared to chunks of numbers and spreadsheets.
3. Mine data
BI tools are remarkably well-suited for effective data mining, which is the method of searching for patterns in data to discover trends and pull insights. Data mining is sorted into five actions: collection, storage, organization, evaluation, and presentation. Because BI software can readily analyze inbound data, it can help your company grab fleeting opportunities that you might otherwise overlook.
4. Revolutionize decision-making
Quick thinking is critical in achieving business success. Usually, the executives who run the company don't have enough time to conduct multiple large-scale research studies at once. Utilizing BI is like having a constant, complex research team that compiles data for revolutionary decision-making.
5. Set up benchmarking
Benchmarking is a valuable data analysis tool that companies use to measure their work productivity, earnings, and overall success against that of their competition. Most organizations have trouble with benchmarking, but BI streamlines the process. Business intelligence provides actionable information that is easy to understand. With BI predictive analytics features, your company can take these benchmarks and carry them out proactively so that you can get ahead of your competition.
6. Manage performance
BI helps monitor, handle, and apply performance goals. Using BI tools, your company can input data-based targets like revenue goals, then track its progress on a regular basis. This monitoring system is referred to as performance management, and it presents an array of effective and easy-to-implement management goals.
7. Improve awareness
One of the vital BI benefits your company can take advantage of is enhanced awareness. BI software designers understand that companies simply can't benefit from opportunities that aren't on their radar. BI software makes those fleeting chances more obvious and provides the facts that enable companies to maximize the opportunities.
8. Streamline operations
Effective BI can cut down waste, and anything that doesn't add value to your company is a waste. This includes some operational and administrative duties that can be automated using a BI system. Business intelligence does the work that data analysts would normally get saddled with, such as data organization and duplication. This can benefit your company in different ways: one, your staff can dedicate their time to more rigorous tasks, boosting productivity; two, it can save the company time, money, and resources; and three, it minimizes human error.
9. Reduce guesswork
Without BI, companies are essentially compelled to take unnecessary risks when making important decisions relating to operations, finances, advertising, to name a few. BI implements a data framework to stimulate decision-making based on data. This helps decision-makers know the best plan and strategy, and not just make guesses.
How Do You Know When to Use BI in Your Business?
In today's cutthroat, technology-based business environment, only a few businesses can survive without BI. If you want to take your company to the next level, you need to invest in analytics software that presents real-time specifics on the productivity, profits, and management sections of your business.
Your company particularly needs BI if the business has:
If you are in the production business, workflow issues can lead to missed deadlines. Keeping track of your workflow will let you discover what you can do better to minimize production times and serve your clients better.
Slow, Unexplained Growth
If your business doesn't grow and you can't pinpoint the exact reason why, you need BI to document financial and production data so you can dig deeper.
If you are dealing with liquidity problems or are struggling to pay your workers and suppliers, you must find the root problem before it is too late. BI can help you sort out your cash flow. It can also help you determine if you have a low profit margin or excessive waste in your production line that messes with your budget.
If your business has various complex processes that employees undertake daily, it could be difficult for you to see where the problem lies. BI can break down each process and document information, so you can easily identify bottlenecks or problematic departments and provide support.
Keeping track of your vendors and deliveries is a demanding task even with a BI system available. However, BI still makes it easier thanks to data visualizations that allow you to actually see where problems originate in your supply chains.
If your company still primarily uses spreadsheets and workers spend too much time manually documenting the same details one too many times, you are wasting money and resources. Fix this by using a central BI console that is designed to collect and assess different data based on what you need to see.
What Is Done In A BI Analysis?
At its core, business intelligence is the processing of data to resolve these major inquiries:
The answers to these queries tend to be either from historical data analysis or real-time stats. The data is based on locations and activities that include consumer directories, supply chains, staff records, production data, and marketing and sales promotions.
Business intelligence analysis aims to draw pertinent data from such resources to help you and your executives generate business value through actions. Historical trends are generally analyzed to form extensive strategic choices. On the other hand, real-time data supports immediate, strategic decisions.
In the general BI structure, data analysis can be utilized in:
These actions are conducted while using any one of the various forms of BI programs, like ad hoc analysis, mobile, real-time, OLAP, and open-source.
How Do You Develop a BI Strategy?
There is a great deal to consider when creating and implementing a new BI strategy:
BI is mainly all about data and analytics. This means you must have both of those things to have a solid overall strategy.
In particular, you must understand and arrange:
Data and analytics
Think about who will use your BI solution, and focus on their needs.
BI requires lots of work, which means you need a team that can effectively carry out the tasks required.
BI is going to be ineffective if done wrong, or without the following people:
Most companies nowadays have data coming in from a large variety of sources. All the information must be assessed thoroughly to have an accurate and effective BI strategy.
Specifically, you need to organize your:
Core data – information generated via mobile app, website, e-commerce site, etc.
Peripheral data – information generated by analytics systems or CRM
External data – information generated from sentiment analysis
When you have the data resources, you need to know where to put and organize them. This will be your data warehouse.
In choosing the right one, you need to consider the following:
Business Intelligence Tools
An easy-to-use BI tool that automates data ingestion, processing, and reporting is very important for your company to comprehend and benefit from elaborate, big data. With hundreds of solutions in the market, it’s not always easy to select the right tool.
Gartner, a leading research firm, publishes a yearly review of the top 20 business intelligence vendors in the market. Access the 2018 report here.
Here are five of the best BI tools on the market:
At its core: Pyramid 2018 is a user-friendly analytics and BI solution that is suitable for any use case and any user - irrespective of their technical prowess - to enable data driven collaboration across the enterprise.
Pros: It's platform-agnostic so it's acquirable for any user. It has six analytical segments with a broad variety of features. It also has a free Community plan for small organizations and teams.
Cons: The customer support line (phone and online) requires ticket submissions, which are only available on a paid support plan.
At its core: Tableau is designed to help users see and fully grasp their data.
Pros: Tableau features an effective, drag-and-drop tool that makes it easy even for novices to use the software. The visualization output makes data more appealing.
Cons: Its price tag is a bit high.
At its core: QlikView differentiates itself from other BI tools by its unique inference engine (Qlik Associative) that can automatically keep data associations.
Pros: QlikView features a Google-like search process for gathering data. The tool itself can merge data sources, so there's no need to depend on IT.
Cons: It can be a bit challenging for non-tech users. There are also a few filtering issues on both the end user and designer levels.
At its core: Yellowfin is a modern BI platform. It distinctly holds the title of being the only one that can support the analyst and business user workflows. It delivers greater user adoption and faster assessment.
Pros: It features Yellowfin Signals, which delivers automated analysis determined by data patterns and outliers. It also has Yellowfin Stories, which integrates multiple data reports into one narrative.
Cons: YellowFin doesn't include profit analysis.
At its core: SAS Visual Analytics brings together data planning, interactive presentation, visual breakthrough, self-service statistics, scalability, and management all directly from just one impressive in-memory ecosystem.
Pros: SAS delivers a modern, built-in environment for data discovery and exploration with easy-to-understand analytics and visualizations.
Cons: Both OLAP and profit analysis features are not available.
The Future of BI
With BI tools front and center in today's business world, what can it offer next?
Collaborative BI– Among the major future trends predicted by experts is the growth of the digital BI world. Soon enough, tools and platforms will end up a lot broader across the spectrum and will be more collaborative.
Progressively Integrated BI Systems– BI software is anticipated to be more embedded in well-established workflows. Numerous vendors are already working toward this improved integration. Incorporation of abilities is also expected to branch out in BI software from within, concurrently providing third-party features from BI tools while also applying BI features in other programs.
More Insight and Self-Service – BI is likely to grow to become significantly more intuitive in the next couple of years. The predictive functions of these systems are expected to expand into recognition features that offer insights using the framework of the proposition.
Network Breakthroughs– As software technologies improve business intelligence systems, new networking clusters are also growing to deal with these huge troves of data for a smoother flow in and out of business systems.
The business intelligence industry has widened tremendously in the past few years, and it is expected to continue expanding. In conjunction with these advancements, however, you need to take on the responsibility of training your workforce.
Don't expect everyone to be data-driven quickly. As a business owner, you must provide education regarding how to use business intelligence. More than the technical aspect of things, it's necessary to enlighten employees with tangible business goals for data and how BI can help in achieving those goals.