Making the most informed decisions requires business intelligence (BI). The right tools and business intelligence infrastructure can turn data into insights that make a company more efficient, improve revenue growth and create a better customer experience.
What is Business Intelligence?
BI is more than just hard data. It refers to the infrastructure that’s put in place to collect, store and analyze data about business operations. It’s a broad concept that involves a variety of tools, and people (data analysts) are needed to manage the process.
Generally speaking, a primary function of business intelligence is putting all of the data generated by a company into reports that make the data easy to interpret. In doing so, the data becomes actionable information that can inform business decisions and provide the basis for testing assumptions.
A business intelligence infrastructure may include:
- Data mining
- Data storage
- Data reporting
- Data analysis
- Performance benchmarking
- Descriptive analytics
- Statistical analysis
- Predictive analytics
While business intelligence, in theory, is the same for all companies, implementing BI is a unique process. It takes analyzing operations and goals upfront to create a system that guarantees accurate, timely collection of specific types of data from different sources. You must identify what information to capture and how to record it so that it can be easily analyzed by stakeholders.
NOTE: Business intelligence isn’t the same as business analytics. BI is focused on what has happened and is happening now. Business analytics, the act of analyzing business data to make future projections, is a part of the overall business intelligence strategy.
Why Business Intelligence Tools are so Important
Business intelligence is something every manager and corporate executive should be thinking about. Without it, leadership is making guesstimates and assumptions that may or may not be accurate. Basing business decisions on gut feelings or hunches is a risky move that can end up being very costly.
The ability to collect and analyze data has been a game-changer. Leadership no longer has to fly blind, going off of basic metrics like number of sales that tell you very little. When a company is faced with a major decision the data can provide objective guidance on what should be done.
Another reason why companies should adopt business intelligence is because the competition already has. Companies that use business intelligence are the first to recognize how the market is moving, what customers want most out of a product or service and how to pivot when circumstances change.
If nothing else, business intelligence is an important factor in reaching goals. It gives you the ability to track performance and gauge how close you are to meeting business goals. If goals aren’t being met the data can provide clues as to what is preventing you from reaching them.
Adopting BI is a move that can potentially benefit every department within a company. Business intelligence provides a wide array of knowledge that can be used to:
- Cut costs
- Determine which products or services will be the most profitable
- Decide which features are worth developing
- Find new opportunities
- Identify and correct inefficiencies
- Analyze and track customer behavior
- Increase customer satisfaction
- Improve employee satisfaction
- Increase and decrease production to better meet demand
- Identify market trends more quickly
- Lower margins
- Provide competitor benchmarks
- Monitor key performance indicators (KPI)
A good BI infrastructure is one that improves the quality and amount of data that’s gathered. It will also structure data in a way that’s readable and merge data from various sources into one platform so you have a complete picture. Ultimately, business intelligence helps you visualize important data in a manageable way.
This can prove to be a challenge for many businesses because data can come from so many different sources and be in a variety of formats. Fortunately, there are tools businesses can leverage to make BI much easier to manage and put into practice.
Analytics Tools for Business Intelligence
You have to be able to collect and track data in order to make use of it, which is why analytics software is essential for business intelligence. Enterprise-level analytics software is often the best solution for bringing together company data from multiple sources and analyzing the data sets.
The automated BI process goes something like this:
Raw data is gathered by the software
The raw data is processed and restructured
The processed data is stored
Data is configured into reports that are easy to decipher
Stakeholders access the reports to analyze the data
How data is configured and delivered is a key aspect. Data serves no purpose if you can’t understand it. BI should give companies a way to easily decipher information that’s important for meeting business goals.
BI tools present data in dashboards, charts, graphs, spreadsheets and summaries of the findings. Dashboards are particularly useful for seeing information at a glance and visualizing multiple data sets at once. The best analytics software for BI will allow for high-level data analysis as well as the ability to drill down deeper and create custom reports.
Most companies will need to use a combination of analytics tools to cover all types of business intelligence. For example, Calendar is a tool that can be used to measure employee productivity and ways to get more done in less time. This is a completely different data set from the user behavior analytics provided by a platform like Mixpanel.
There are other analytics tools that are designed to measure social media engagement, SEO, competitor comparisons and much more. Today, if there’s data you want to measure most likely an analytics tool already exists that can handle the task.
Although data is getting more widespread and fragmented, there are more BI tools than ever to help companies make sense of it all. In order to get the most valuable insights out of your data, it’s important to first establish business goals and understand where all of your data is generated. From there an infrastructure can be built to collect, configure, store and report data so that historical and real-time information can be used to make better business decisions.