What is business intelligence and how can it benefit your business?
Gleaning value from the deluge of data being created and captured by businesses is a hot topic. You’ve probably heard the term business intelligence (BI)—but what does it really mean, and are the benefits of BI worth the investment?
In this day and age, many businesses are continuously generating massive amounts of data. If leveraged correctly, using tailored business intelligence dashboards, this data can offer deep insights into the operations of your business.
Business intelligence platforms can help you:
- Identify strengths and weaknesses of divisions/functions,
- Improve processes,
- Reduce wastage,
- Take informed action, and
- Increase the return on investment of initiatives.
Let’s take a closer look at what business intelligence offers and how your business can benefit.
The decision-making imperative
Being able to make the right decision, and quickly, gives you a competitive advantage. Effective decisions are needed every day, and at every level of your business.
Of course, there are many organisational and cultural factors that influence whether your business is good at making decisions. But among the main barriers to good decision-making include not having clarity around the required choice or the right kind of inputs to base your decision on
This is a major issue for senior executives who spend more of their time and energy on big decisions that impact the future profitability of your business.
A global survey by McKinsey in 2018 found that the C-suite typically spend more than 70 percent of their time making decisions, yet most respondents felt this time was not well spent. The survey revealed that in the organisations most capable of making decisions that drove growth—speed and quality outcomes were highly interrelated
“According to respondents, the organizations that make decisions quickly are twice as likely to make high-quality decisions, compared with the slow decision makers,” reports McKinsey.
Accurate, complete, and timely information that drives better decisions is what business intelligence software can deliver. BI solutions give you real-time insights so you can confidently act or adjust your course as changes arise.
What is business intelligence?
Business intelligence is a type of reporting tool. BI software uses algorithms to surface company-wide data via easy-to-understand visualisations. These graphical dashboards give your team the ability to monitor performance at a glance.
BI dashboards overcome the drawbacks of traditional reporting, which is typically:
- Based on historical data or a specific period of time in the past
- Onerous to compile and out-of-date by the time it’s ready
- Too detailed to take in quickly and not customised for the reader
Dashboards can convey operational metrics as well as high-level analytics to guide strategic planning.
You can get a clear picture of important metrics as soon as you open your computer or mobile device—like who your top customers are, how many overdue orders are in the queue, your monthly profit and loss, and a cash flow forecast.
Answers when you need them
BI dashboards are distinguished by their immediacy and interactive nature—you can see what’s happening right now and then easily inspect the underlying data for more detail if needed.
For instance, a sales manager can easily grasp how the business is tracking against its sales target, and drill-down to see who is making the sales and how different teams or regions compare.
Rather than wasting your time collating and interpreting data, implementing the right BI software in your business allows your team to:
- Get instant visibility into key performance indicators (KPIs)
- See what needs attention and ask the right questions
- Prioritise tasks and understand broader trends
- Make better short and long-term decisions
Making the most of BI dashboards depends on solutions being carefully configured to integrate multiple data sources and present the most relevant information for individual decision-makers.
Your finance manager cares about different metrics than your warehouse manager. Dashboards should be customised for the KPIs that matter to the role, or else your team may be overwhelmed by information that doesn’t help them do their job.
Do the benefits of BI justify the cost?
Can you really trust the insights you get from your current systems? Are you confident you’re basing decisions on the best available data? If the answer is no, then investing in BI dashboards is a clever move.
In particular, doing more with your customer data in order to provide better products and customer experiences leads to more sales and higher margins. When you know more about how different products perform, which marketing activities deliver a return, and what contributes to churn—you can improve your offering and streamline your processes
Being data-driven ensures you can understand what actually drives revenue, and how you can improve efficiency and reduce costs. That’s likely to become more important as new technologies emerge.
Consider how much data you’re already gathering via your business systems, websites, social media, video, geolocation devices, point of sale, etc. In future, networks of sensors, smart home, smart city, and wearable devices will be more prevalent as the Internet of Things expands.
You’ll need fast and intuitive ways to interpret usage, purchasing behaviours, and operational requirements to meet customer demand. BI tools may also open up new opportunities to generate revenue—such as mining data for customer-facing apps (to track usage for example) or identifying patterns for business clients (e.g., fraud detection).
Being able to extract meaning from data gives businesses an edge in the digital economy. Don’t miss out.