Business intelligence tools are essential for companies to stay competitive and maximize revenue streams. Organizations at every size and stage are using BI software to analyze, manage, and visualize business data. Here are ten benefits business intelligence software can add to any business:
- Fast and accurate reporting
- Valuable business insights
- Competitive analysis
- Better data quality
- Increased customer satisfaction
- Identifying market trends
- Increased operational efficiency
- Improved, accurate decisions
- Increased revenue
- Lower margins
Every business has its quirks and the right business intelligence (BI) software takes these quirks into account and offers a complete, customized solution. One of the main functions of business intelligence software is data analytics and the type of analysis a company needs depends on their goals. Data Analytics can help companies describe their businesses, look at reasons why positive or negative things have happened, generate information they may not have, and advise on possible action plans to take. Business intelligence tools can help companies perform these types of analyses, monitor key performance indicators (KPIs), and generate accurate reports. When analysts use these tools to communicate their findings to stakeholders, they can turn their insights into action.
BI software tools may also help give companies an advantage over their competitors by analyzing market trends, shining a light on new opportunities, and developing new strategies. These tools may also help organizations understand their customer and client needs and help optimize their services, from business-to-business (B2B) to business-to-consumer (B2C). Companies may also use these tools internally to monitor employee productivity in real time.
How Does Business Intelligence Work?
Business intelligence is the foundation for any short-term and long-term business strategy. BI is used as a catch all phrase since it doesn’t apply to any specific type of analysis. It refers to the business intelligence tools and processes used to extract insights from raw data to aid in business decision making. Organizations leverage this data to get ahead of competitors and optimize overall performance. These tools are necessary for most BI analysts, but there are also a range of BI tools available that can help employees from a variety of departments. Some BI software can integrate with tools for specific business verticals such as retail, travel, and media services. BI reporting and BI analytics may help these users find solutions to inform their day-to-day business, using dashboards, complex analytical processing, and powerful visualizations. BI reporting also represents a vital part of business intelligence because it helps executives make timely, data-supported decisions.
But how does business intelligence really work? Most companies are in the preliminary phase of business intelligence and only key individuals have access to basic analytics and historical reports. They have a lot of data stored in different places, but they aren’t able to keep track of this information or unify these different data sources. BI tools can deliver fast and accurate information to decision makers using a variety of data sources without assistance from an IT department to run complex reports. These data sources could be from marketing or sales analytics, operations performance, from a customer relationship management software system (e.g. Salesforce), or supply chain data. Typically, BI software can pool all of these sources together to provide historical, current, and predictive views to help with business planning.
It is important for companies to consider how they are operating, including current data integration, reporting, and information sharing processes. From there, they can define their goals, and then develop a strategy for rolling out a new system. For customized solutions, BI software can be deployed in stages. Businesses can start with customer data first for example, then build out the next section, such as financial data. This process is more manageable for most companies so that they’re only focusing on certain insights a specific time and eliminate being overwhelmed by too much data at once.
Business Intelligence VS Business Analytics
Experts tend to disagree on the differences between business intelligence and business analytics. The reason why no one can agree? Business intelligence and business analytics, or BA, are also very similar and are connected. Some experts believe the main difference comes down to time: business intelligence helps in the day-to-day operations and how things look in the present, whereas business analytics helps business planning for the future, such as using predictive analytics to figure out why things are happening and how things will look in the future. Individuals that handle business analytics, typically have a background in mathematics or statistics or an online masters degree in business analytics. Business intelligence experts should also be good with numbers and have an analytical mind.
Pat Roche, Vice President of Engineering at Magnitude Software believes, “BI is needed to run the business while Business Analytics are needed to change the business.” Business intelligence and business analytics work well when paired together. Since business intelligence helps companies manage and optimize their daily operations, business analytics can pick up where BI left off and determine ways to improve the company’s future performance. Following Roche’s line of logic, to break it down even further, business intelligence focuses more on the first two types of business analytics – descriptive and diagnostic, and business analytics focuses on predictive and prescriptive analytics.
How Do Business Intelligence and Business Analytics Support Decision making?
Regardless of whether or not there are similarities and differences between business intelligence and business analytics, companies still need to figure out which tools to use and which software to invest in to get the valuable insights they need and make timely and accurate decisions. Some may argue that the most important benefit of BI and BA is improved decision making. BI and BA can help decision makers at every level understand their business, increase profits, and make decisions that aren’t just supported by gut instincts, but actual statistical reasoning and data. Businesses can use this data to make decisions such as entering new markets and what steps to take to mitigate risks. They can also make decisions regarding operational processes or restructuring departments.
Why Is Business Intelligence So Important?
In today’s data-driven world, companies are facing information overload and companies who are interested in working smarter, are investing in ways to control and understand this information. The era of big data is upon us. In fact, we are producing so much data that 90% of the data out there has been collected in the past few years. Although adopting new technology may seem like a daunting task, BI software usually has a good pay off even if the benefits aren’t seen immediately. Business Intelligence helps companies monitor trends, adapt to varying market conditions, and improves decision making at all levels of the organization. The BI tools a company uses depends on their goals. Some companies are interested in gaining insights into consumer buying, other companies are interested in improving employee productivity or seeing who the best performers are. There are an infinite number of ways companies can deploy a business intelligence solution. Here are just ten ways business intelligence can improve businesses.
The Benefits of Business Intelligence Softwares
- Fast and accurate reporting: Employees can use templates or customized reports to monitor KPIs using a variety of data sources, including financial, operations, and sales data. These reports are generated in real time and use the most relevant data so businesses can act quickly. Most reports include easy to read visualizations, such as graphs, tables, and charts. Some BI software reports are interactive so that users can play with different variables or access information even faster.
- Valuable business insights: Businesses can gauge employee productivity, revenue, overall success as well as department-specific performances. It can uncover strengths and weaknesses since BI tools help organizations understand what’s working and what isn’t. Setting up alerts is easy and can help track these metrics and help busy executives stay on top of the KPIs that matter the most to their business.
- Competitive analysis: The ability to manage and manipulate a large amount of data is a competitive edge in itself. Furthermore, budgeting, planning, and forecasting is an incredibly powerful way to stay ahead of the competition, goes way beyond standard analysis, and is also easy to perform with BI software. Businesses can also track their competitor’s sales and marketing performance and learn how to differentiate products and services.
- Better data quality: Data is rarely squeaky clean and there are many ways that discrepancies and inaccuracies can show up – especially with a hacked together “database”. Businesses that take care of collecting, updating and creating quality data are typically more successful. With BI software, companies can aggregate different data sources for a fuller picture of what is happening with their business.
- Increased customer satisfaction: BI software can help companies understand customer behaviors and patterns. Most companies are taking customer feedback in real time and this information can help businesses retain customers and reach new ones. These tools may also help companies identify buying patterns, which help customer experience employees anticipate needs and deliver better service.
- Identifying market trends: Identifying new opportunities and building out a strategy with supportive data can give businesses a competitive edge, directly impact long-term profitability, and gives the full scope of what is happening. Employees can leverage external market data with internal data to detect new sales trends by analyzing customer data and market conditions, as well as spotting business problems.
- Increased operational efficiency: BI tools unify multiple data sources, which help with a business’s overall organization so that managers and employees spend less time tracking down information and can focus on producing accurate and timely reports. Armed with up to date and accurate information, employees can focus on their short and long term goals and analyze the impact of their decisions.
- Improved, accurate decisions: Competitors move quickly and it’s important for companies to make decisions as quickly as possible. Failure to issues with accuracy and speed could lead to lost customers and revenue. Organizations can leverage existing data to deliver information to the right stakeholders at the right time, optimizing time-to-decision.
- Increased revenue: Increasing revenue is an important goal for any business. Data from BI tools can help businesses ask better questions about why things happened through making comparisons across different dimensions and identifying sales weaknesses. When organizations are listening to their customers, watching their competitors, and improving their operations, revenue are more likely to increase.
- Lower margins: Profit margins are another concern for most businesses. Fortunately, BI tools can analyze inefficiencies and help expand margins. Aggregated sales data help companies to understand their customers and empowers sales teams to develop better strategies about where budgets should be spent.