Business Intelligence is Not An Oxymoron
For many, the words "business intelligence" leads to thoughts of expensive technologies used by billion-dollar corporations to gain a competitive edge or just a blank stare of ignorance. So, what is BI? And, more importantly, what does it mean for your business?
BI is a broad term used to describe applications and technologies for gathering, storing, analyzing, and accessing data to facilitate strategic decision making.
The reality is that businesses generate copious amounts of data without the proper mechanisms in place to truly capture and analyze that information. In fact, more than 80 percent of companies' data are stored in unstructured formats.
Some businesses still use spreadsheets and reports to analyze their data and lose valuable time gathering information from multiple sources. This approach has other downfalls, including human error, version control, and outdated information.
BI helps solve these problems by providing a single interface to analyze a company's disparate data sources. It provides meaningful, actionable information that empower executives and managers to make better, faster decisions.
The BI Evolution
Large enterprises have been reaping the benefits of business intelligence tools for decades. Think about how Amazon understands its customers' buying habits or how Kelley Blue Book compiles its findings for every make and model of automobile.
At first, BI technology was designed and priced for big business and required a large IT staff to implement and use. Today's technologies have evolved and are now more affordable and scalable for all types of businesses. Technologies such as open source, cloud, in-memory, and visualization technology all have aided in this evolution.
Many companies are taking notice and jumping aboard to reap the benefits of BI. In fact, analysts like Gartner, Aberdeen, and SMB Group have identified BI as a top priority and investment for small- to medium-sized businesses in 2013. In addition, PwC named data mining, analysis and visualization in its "Top 10 Technology Trends for Businesses in 2013."
Business Benefits of BI
Industry gurus often refer to business intelligence as providing "the right data at the right time to the right people so that they can take the right decisions."
BI tools gather data from a number of sources, including databases; POS, CRM, inventory, and accounting systems; and even Microsoft Excel spreadsheets. This information is presented in customized dashboards with charts (bar, column, line, pine and scatter plot) and gauges that allow users to drill down into the data to perform functions like:
– Analyze sales trends
– Track customer buying habits
– Predict market demand
– Assess staffing needs and
– Evaluate marketing campaign
– Manage finances
– Analyze vendor relationships
This functionality gives executives and managers the ability to easily access accurate information, enabling them to highlight critical issues at a glance. It also allows them to easily identify their most efficient and productive areas, helping departments to prioritize as appropriate.
With all of this information available at the fingertips, businesses can gain strategic advantages, such as:
Better decision making: Executives and managers can establish key performance indicators for a business or department and then measure performance against these metrics. For example, a manager can track the current performance and closely monitor future phenomena, such as customer behavior, product demand, and inventory levels.
Greater productivity: Many companies in the current economy are trying to get more done with fewer people. Business intelligence automates information and reporting, saving time and money.
Return on investment: With a business intelligence implementation, companies can improve operational efficiency in the short term and optimize business processes in the long run. Businesses can improve in areas like revenue enhancement, margin protection, and cost reduction and avoidance.
In essence, business intelligence helps companies better navigate the current business climate and gain strategic advantages. And without the aid of tools like BI, companies that fail to monitor key areas like sales, finance, production, and human resources could be captaining a ship without a rudder.
Shannon Wilcox is a Client Services and Communications Manager at Safety Net. She can be reached at email@example.com.