Business Intelligence: Components and Advantages for Businesses
Business Intelligence: Actionable Information to Generate Results
The term Business Intelligence was introduced during the 90’s. However, its popularity has increased a lot during the recent years. More and more companies are focusing on BI to make better decisions and deliver improved results. Business Intelligence can solve numerous problems apart from aiding decision making and producing intelligent business solutions. The use of Information technology in business has risen in the past several years. IT has reduced operational and labor costs and added efficiency to operations. Business Intelligence is a related area that mainly deals with the use of data to predict trends and to make better decisions according to the ever changing business environment. It is due to the volatility of the business environment and the high level of competition that the need for Business Intelligence has grown. Accurate and actionable information that aids quick decision is important for business success.
Every day more and more complex products arrive to the market. Businesses that are able to provide solutions based on the analysis of trends are going to survive. Every large organization collects a lot of data from its customers. Business Intelligence is based on advanced technologies and concepts. It aids decision making at the organizational level by producing actionable information from that data. In the 21st century, information is power. A well informed organization makes better decisions that keep it ahead of its competitors. Today, the use of Business Intelligence has become common and there are several types of tools that companies are using for this purpose. Some of the most common tools include business and data analytics, predictive analytics, cloud technology, mobile BI, Big data consultation and visual analytics. Here, Big data denotes the large volume of data several organizations generate daily including both structured and unstructured data.
The primary components of Business Intelligence:
OLAP (Online Analytical Processing) –
This is the component of BI that executives use to sort and select clusters of data for monitoring purposes. Specific tools help at the generation and analysis of these clusters of data based on which adjustments can be made to the business processes.
This component generates useful stats related to specific products and services. A fashion retailer can analyse the sales of certain products to make changes at the local, regional or national level. This data can also be used to predict if a particular product is going to be successful in a specific market.
Real Time BI:
This has become a very important component of BI which helps business owners to respond to real time trends. It can help marketing professionals create better deals and limited time offers. For example, it can help analyse the number, time and location of customers to provide better deals on a specific day or the weekends.
This component allows business managers and owners to analyse different sets of data and analyse patterns that can help at making changes to drive performance. For example business owners can go through sales data over previous years and accordingly make improvements to product development. They can also compare operational efficiency across their plants and supply chain.
This is the component related to the storage of several forms of data. It contains the raw data that can be processed using software and then actionable information can be generated. It also helps at making decisions based on facts at all the organizational levels. The information generated from the data sources can be used throughout the organization in various divisions.
The importance of Business Intelligence has grown based on the need to make real time decisions and to remain more competitive. Business Intelligence can be used to produce various types of comparative reports, make forecasts, design better marketing strategies and make better management decisions. At the operational level too, BI can provide answers to several complex problems in the supply chain and manufacturing. Moreover, it is not just at the executive level but at all the levels in any organization that decisions need to be made faster based on facts. Business Intelligence can provide the necessary information to users at all levels to make decisions and take action. Organizations also require actionable information to be accessible faster. BI reduces operational costs and time taken in the analysis of data and also increases income by helping at better predictions and forecasts. Apart from these things, the business environment has become increasingly complex and companies want to keep their IT costs lowest.
Advantages of Business Intelligence:
Gain better insights into customer behaviour:
There are immense benefits to be derived from Business Intelligence. First of all businesses can gain deeper insights into their customer’s behavior. It helps businesses understand buying trends. Based upon an analysis of these trends you can know which products are most successful and accordingly plan your product development. It helps predict which upcoming products are going to be loved by the customers. This will help improve sales and profits as well as attract and retain customers.
Identify problem areas easily:
Business Intelligence also helps identify the areas where performance is not up to the mark. Managers can analyse data sets to find out which areas are not generating expected results and make changes that can improve performance and profitability. Using software and skilled professionals the businesses can save both time and costs. Without the use of BI, such processes get to become time consuming and one would need to go through a large load of data to reach a conclusion.
Turning data into actionable information:
All organizations especially the large ones generate tons of data daily. One cannot analyse this data and derive conclusions randomly. A manager needs software and analytical skills to do this. All of it can be made possible using the BI software. It can process large volumes of data to derive actionable information from it that can be used at all levels to make sound decisions. This information also proves useful when it comes to finding opportunities.
Improves overall efficiency:
All the organizations want to have actionable intelligence while keeping their IT related costs minimum. Business Intelligence can provide information that can be shared easily across various departments. This saves both time and costs related to reporting. It improves the organization’s overall efficiency and helps complete projects in comparatively less time. So, BI can be used to save both time and efforts and to increase productivity.
Based on this, you can understand the importance of business intelligence and how it can keep a business ahead of its competitors. Data is everything in the modern world but the problem is to derive actionable information from it that can be turned into timely action and results. This task can be performed with the use of BI software. However, just BI technology would not suffice and businesses also need to hire skilled BI personnel that can handle the task.
Sources: [DBJournal] [Villanova] [ToddWestMedia]
Business Profile of Microsoft Inc.