Business intelligence is helping executives around the world derive meaningful performance insights for more strategic decision-making and improved company performance. Joining data, technology and analytics, business intelligence (BI) provides executives with the opportunity to uncover new business opportunities, expand into new markets and find new, compatible business partners.
What Is Business Intelligence?
Business intelligence is a technique for turning raw business data into insights meaningful to company decision-makers:
According to Gartner, “Business Intelligence is an umbrella term that includes the applications, infrastructure and tools and best practices that enable access to and analysis of information to improve and optimize decisions and performance.”
The central objective of using BI is to improve the relevance and quality of raw business data, which in turn allows businesses to better assess performance. In order to leverage BI to achieve a company’s strategic priorities, it is vital to have a structured approach to viewing, reporting and assessing the business’s data.
With the advent of business intelligence tools that capitalize on data mining and data warehousing, businesses can better analyze activities, understand their performance. For example, using new business intelligence tools, firms can now more efficiently find and connect with relevant companies.
Leveraging Business Intelligence
To use business intelligence tools effectively, organizations need to plan a strategic way of incorporating data into their decision-making and move away from intuition-based planning. This sentiment is echoed by Larry Ellison of Oracle: “Without BI, a company runs the risk of making critical decisions based on insufficient or inaccurate information,” Ellison said. “Making decisions based on gut feeling will not get the job done.”
Here are some important steps for leveraging BI in your organization:
- Identify the various types of data your business generates or could potentially generate in the future. These can include sales data, inventory counts or workplace accidents statistics, for example.
- Choose the data set(s) that can best help your business achieve a strategic objective. For example, if you decide that maximizing the efforts of your sales team is a primary objective, you will want to organize and extract your sales data.
- Choose a BI tool to help you pull insights from your chosen data set.
- Communicate the information extracted from your BI tool. This is where charts and other data visualizations come into play.
- Turn the information gleaned into actionable insights that guide strategic project planning. For example, after gathering and organizing your sales data, you might gain a new view into daily or weekly sales data as opposed to the monthly view you used to use. This more in-depth view might lead you to find that sales are typically highest on Tuesday’s and lowest on Friday’s. You could therefore direct your sales team to conduct more housekeeping on Friday’s to prep for higher sales on Tuesday’s.
Room for Improvement
In a survey conducted by SunGard, only 13 percent of executives reported using advanced BI techniques like predictive analytics and alerts. Many companies today are still conducting reporting through manual data extraction and analysis and feeding data into static spreadsheets. Reliance on spreadsheets and periodic reports can hinder or limit a company’s knowledge base due to the fact that these documents are showing a mere snapshot of information rather than dynamic real-time data. BI tools allow companies to view their aggregated information in real time, allowing them to make both reactive and proactive decisions.
To improve the timeliness and quality of information viewed, it is imperative for companies to proactively use BI tools, which often use key performance indicators to assess the present state of business and allow for a prescribed course of action. By utilizing the various tools at their disposal, businesses gain in-depth knowledge about internal and external factors such as customers, competitors, business partners, economic environment and internal operations. This leads to more effective and strategic decisions.
Using BI Effectively
Once in place, BI tools and the synchronistic nature of the BI environment can help facilitate a very different orientation to the everyday, often arduous tasks of data accumulation and processing. With BI, executives can now spend more time focusing on information analysis and strategic recommendations and less time pulling data together.
When used correctly, business intelligence becomes a powerful agent of change for defining strategy, driving partnership decisions and profitability and developing a performance-oriented organizational culture.