The modern business environment has become increasingly cut throat. Firms are squeezing every ounce of competitive advantage to stay ahead of the pack. Keeping on top of new trends ahead of one’s competitors and spotting a rival’s weak spots are just some of the tricks that enterprises use to survive. Out of this landscape rose the need for information providing actionable insights. And the providers are the ones who also have the answer to: what is business intelligence nowadays?
As the world has turned towards information and technology for almost anything, so has the business community. This article will look at answering the question what is business intelligence? through assessing its uses, benefits and best practices.
What Is Business Intelligence?
Business intelligence is a term used to refer to a set of software tools that an organization uses to create a system dedicated to analyzing its data. It involves assessing a vast information pool to identify patterns that a business can make sense of and gain new insights that will inform its operations.
The different tools used have several features in common to help them perform. These include online analytical processing, data mining, bench mining, business performance management, reporting, predictive analytics and prescriptive analytics. The overarching objective of business intelligence is to break down complex sets of information into an easy-to-interpret analysis that adds value to the firm by directing decision-making strategies.
Who Uses Business Intelligence?
An understanding of what is business intelligence points to who it can be best intended for. What is business intelligence’s best use case?
- Retail: They use business intelligence systems to help address the problem of shrinkage i.e. the loss of an item between its being ordered and the point of sale. The single biggest contributor to shrinkage is theft. Gathering and analyzing data on what things get lost, in what locations and any other related information help them draft policies that can curb shrinkage and preserve revenue.
- Clothing industry: Apparel firms use business intelligence to identify the latest fashion trends. Through continual data collection and analysis, they can keep their products relevant to avoid sales falling off.
- Oil companies: Firms in the oil industry use business intelligence to monitor oil barrel prices and reflect any changes in refining, distribution and marketing costs to avoid losses.
Ways in Which Business Intelligence Can Help Your Business
What is business intelligence and how can it benefit your organization?
- Improves your business model: Business intelligence gives you a thorough understanding of your clients, their habits, and trends affecting the industry your organization is in. It also helps you analyze your competitors better. All these serve to help you make more informed decisions on how to improve your business model and pivot in reaction to competition.
- Gauges your marketing ROI: Business intelligence gathers data from the different marketing strategies you implement. Consequently, you can gain insights on what is working and what isn’t. The granular control it gives you helps perfect your marketing with the least bit of waste to boost ROI and consistently increase or maintain sales.
- Helps you make decisions faster: Business intelligence grows and maintains data on the firm’s operations. If archived in an easy-to-access and interpret format, it helps the company arrive at data-driven decisions quicker, increasing operational efficiency.
- Tailors your sales strategy: Business intelligence contributes towards improving sales by gathering and gleaning useful insights on potential customers. The sales team can better prepare for any objections or barriers to closing a deal from this information.
6 Ways to Fully Benefit from Business Intelligence
1. Involve the Firm
Business intelligence specialists need to continually collaborate with the company beyond just receiving a set of requirements. At each stage of the process from data gathering, parsing to final delivery, a consistent conversation with the enterprise helps add value to the information they are processing.
The result is an overall high-value output the firm can depend on.
2. Identify Your Core Criteria
Single out the primary imperatives that the business intelligence exercise must cover for your business. When you have your core and secondary imperatives, a framework for what priorities the process should emphasize on is clarified. This leads to operational efficiency and delivers an objective approach to decision making.
3. Encourage Simplicity
Complex business intelligence systems defeat the purpose for which they are created i.e. providing easy-to-interpret information that adds value to the firm. The objective in instituting a business intelligence project is to deliver an analytics tool that the company can utilize in a self-sufficient manner.
Complexity works against creating this as compared to an effective but relatively easy-to-use system that can be quickly adopted.
4. Improve Decision Making Strategies
What is business intelligence and its role in improving decision-making strategies? It represents a significant investment by a company to use data in informing its decisions. A robust system without a complimentary decision-making strategy dilutes the value of any high-value information it generates.
Focus on improving the quality of decision-making practices within the organization to carry on the maximum value of the analysis gained from information on to sound decisions.
5. Clean the Data
The value of any business intelligence system is the quality of data it can generate and make useful to the firm. Information put in a format that is easy to locate and interpret builds confidence in it. Strive to clean the data before embarking on implementation to simplify the project.
6. Build on it as You Go
Begin by identifying and focusing on a few goals. As the integration process advances, more objectives can be tacked on. This strategy helps simplify the process and lets the team concentrate on specific deliverables.
To the Point
Technology has touched every aspect of life in this modern era, and business strategy isn’t exempt. The need for better information providing a competitive advantage and the growth of analytics intersect to birth business intelligence. Companies derive specific benefits from using it to inform their decisions.
Best practices in implementation ensure that a company maximizes the advantage its investment in business intelligence delivers. The question of what is business intelligence must therefore be answered by any business no matter how small. Do you use business intelligence? Do you have any thoughts to share?
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