Before we dive into the details of a Business Intelligence (BI) Software, you must be wondering if this is something for you. Right?
If not, why would you be interested in this topic.
Just to be clear, BI is not a new concept, and neither is it a new tool. The tasks performed by a BI Software has been done by the Management Information System (MIS) or the Data Mining team, that predominantly exists in the banking sector, for decades (Yes, it’s been around for awhile already).
To understand what a business intelligence software is, we must first define Business Intelligence itself.
Hans Peter Luhn, an IBM researcher who first coined the term, defines Business intelligence as the ability to apprehend interrelated data to guide an action towards a goal. Another researcher, Howard Dresner, defines business intelligence as a decision-making tool that are based on available information and data.
In layman terms, business intelligence just means the combination of process, method, and technologies that convert data into knowledge that could assist in decision making.
Let’s explore this deeper.
What is Business Intelligence really about?
Based on the definitions that we have discussed above; we could then define Business intelligence software as a set tools that could convert big data into an actionable knowledge.
Now, you might wonder how a Business Intelligence Software could be applied in the real-world, right?
Take Google Analytics for example, Google Analytics allows a website administrator to measure the performance of a website. The data generated from this analysis could be then used to optimize the website. Example, with the analytics, you can identify customer segments who have higher tendencies to convert (from leads into sales) or identify where you’re cost-per-click (cpc) spending is generating higher/lower revenue. And you’re your results, again, are based on data.
This is a simple example of what business intelligence software do.
Generally, BI takes a seemingly unorganized/trivial data and uses it to provide insights that could be extremely useful for decision making. Business intelligence tools allow companies to see both historical and current data, which enables the user to make comparisons. Hence, supports better decision making.
BI also allow for easy interpretation of big data that helps identify new opportunities. At the same time, it helps in assisting the implementation of an effective strategy based on insights that can provide businesses with a competitive market advantage and long-term stability.
Does all these make sense?
If yes, are you still interested in BI? I certainly hope you are.
So, How Business Intelligence could help my business?
Now, you might consider installing a BI system/software for your business, below are several areas where applying business intelligence could provide a significant competitive advantage for you:
1. Increase Sales
Improving sales is one of the primary reasons to implement BI for your business. I’m sure that we all have encountered some difficulties in convincing our potential customers to buy our products or services, right? But fear not since with a proper application of Business Intelligence, which includes the sales process of a business, could become a lot easier.
As discussed before, Business Intelligence could be used to analyze many specific KPI (Key Performance Indicators) such as sales conversion rate, customers habit, and customer demographic.
This enables BI to help you identify your customer behavior and needs, and by having these information in advance, you could offer products and services that matches their needs. This could potentially improve everything from conversion rates to overall profit margins
2. Analyze & Visualize Data
Data that are generated from BI could also be useful to support claims you made during sales, since it is laid out in an easily-understandable graphics.
Let me explain more.
Did you know that converting data into numbers could greatly speeds up your cognitive process? Our brain could process images and visual cue 60,000 times faster compared to text. This is why visualizing data is important to better understand a business’ operation.
Business intelligence utilizes a range of tools that are built to analyze and manage data about your business’ operations. However, unlike regular data analysis, BI could provide visualization of these data.
Now, you might be thinking that data visualization is only useful for analyzing data that is financially related. However, Business Intelligence could analyze and visualize so much more than just financial data. Business Intelligence allows you to visualize data that you didn’t think could be visualized such as employee’s productivity and attendance, sales conversion, logistic/stock keeping, and etc.
Providing data in visual format makes it easier to comprehend, this is why business intelligence could make the least experienced employee in your company to draw insight from data. This could reduce or even eliminate the need for Data Scientist/Analyst in your company, since you and the rest of your employee could just “feed” the BI system with the appropriate data, and it’ll automatically transform those data into an actionable insight.
Of course, there are benefits in hiring Data Scientist. Is just that not all companies need one when they start.
3. Performance Management
Next. Have you ever been in the situation where you couldn’t monitor your business progress? Or even finish a project after the deadline?
Well, if your business uses a Business Intelligence system, you’ll not be facing this kind of situation.
BI enables organization to monitor a project or a goal progress with a pre-defined timeframe. The goal could be in the form of project completion deadlines, monthly sales goals, and also delivery time. This sounds like regular management, right? And some of you might be thinking “Why should I use a BI just to manage those kinds of stuff?”
Because, BI system could analyze past data, the result of this analysis could be in the form of sales forecast, delivery time, and fulfillment time. This could help managers set realistic deadline and goals which increases its success’ chances.
BI could also provide managers with real-time updates on the progress of a goal or project. This helps managers to better understand what is needed to fulfill the goal or finish the project more easily. It also helps employees to track their own progress in the project, and make the whole team become more focused in finishing the goal or project.
Since performance and progress are constantly tracked by BI, the amount of time that a company waste to find out what is needed to complete the goal or project is reduced and projects or goal could be completed more efficiently.
I think you get the gist of what I’m trying to share here. But, honestly, there’s only so much I can praise BI as a tool. It’s like, trying to tell you how great a F1 car is, you’ll eventually just need to get your hands dirty and start using it. Until then, you won’t really get it.
Anyway, hope this was useful.