Business intelligence (BI) first surfaced in a 1958 paper published by IBM. Countless organizations have since benefited from BI. Yet, even though BI is an established business tool, many companies are still lagging behind their competitors because they underestimate the transformative power of BI.
Why would any organization ignore or neglect a tool that can transform business growth? The answer may lie in a lack of understanding of exactly what business intelligence is and what it can accomplish. After all, BI is a broad term that can easily get lost inside a cloud of data-driven initiatives.
Every data initiative and the associated preponderance of vendors all take unique marketing angles. There’s an ever-growing vocabulary, too, while the rapid pace of change in the BI market further complicates matters. For instance, augmented analytics sounds a world apart from established business intelligence, when it essentially sits under the same umbrella.
Irrespective of the initiative, vendor, or industry parlance, BI comes down to the same thing!
Business intelligence is about harnessing data to improve operations and customer service, to grow revenue, and give strategic decision makers actionable information.
In this article, we will answer questions such as what modern-day BI does, why it matters for business success. And, we will also outline typical use cases. Then, we will also look at the importance of self-service BI and take a view on the future of BI.
What Does Modern-Day BI Accomplish?
While the BI market is established, it continues to grow. Statista suggests that the BI market will grow from USD 14.3bn in 2019 to USD 16.5bn in 2023. Yes, BI has penetrated deeply into day to day business operations, but some companies still do not make effective use of BI. In a growing BI market, what features and benefits do companies risk losing out on?
Collecting, Centralising and Unifying Data
Perhaps the most important role played by BI software is the ability of BI solutions to bring together countless sources of data. With no concerted effort, business data is likely to sit in silos, but BI tools bring siloed data together into a central data analytics environment.
As a result, organizations have a broader and deeper capacity for data analysis and enjoy more data visibility. BI tools also link previously disconnected sources so that broader patterns and trends can be easily identified across multiple, discrete data sets.
Reports and Dashboarding
BI tools provide easy, effective ways to generate reports from existing business data. These reports are not just rows of numbers; a modern BI tool will deliver an interactive dashboard that allows users to manipulate data on the fly. With drag and drop actions, users can quickly distill complex reports into easy to digest insights.
Reports matter; a company can sit on mountains of valuable data that contains critical insight. BI-driven reporting helps decision-makers extract the value contained in this data. User-friendly dashboards allow executives to extract knowledge instantly, and to do so rapidly, using ranking reports, for example.
Monitoring KPIs
Key performance indicators help an organization monitor its performance over time. See a dip or a rise in KPIs? It may well indicate problems ahead. However, compiling and reviewing KPIs is a time-consuming process.
BI solutions take the effort out of setting up, monitoring, and responding to KPIs. A BI solution can automatically flag indicators that are out of range to ensure that your business responds rapidly to any cause for concern.
What-If and Scenario Analysis
Decisions are often made under uncertain circumstances. BI tools make it easy to evaluate different scenarios based on existing business data. Executives can depend on business intelligence software to do automatic scenario analysis, highlighting how a change in circumstances will affect outcomes.
The power of BI lies in its ability to automate the What-If process. There’s no need to manually calculate scenarios, modern-day BI tools fluently present dashboard scenarios and carry a high degree of interactivity. Endless scenarios can be rapidly evaluated using visual BI tools.
The features I listed are the bread-and-butter of a typical BI solution. Of course, BI is a vast and complex field that covers capabilities such as location intelligence and collaborative BI. We’ll address some of the cutting-edge BI features in a later section.
Yes, an organization can get by without access to BI features, but a complete lack of BI capabilities will encumber any business of size. For those who can’t spend heavily, there are free and open-source business intelligence software tools.
Why BI Matters for Business Success
Let’s consider why business intelligence platforms play such an important role in business operations, growth, and strategy.
BI Delivers Operational and Customer Success
Data insight relieves inefficiencies and bottlenecks, improving the pace of business operations, and saving money in the process. Operations in almost every industry benefit, whether it’s improved stock control in a hospitality business or efficient maintenance of industrial plants, analytics has the ability to iron out kinks in business operations.
Companies that leverage BI have happier customers too. Data drives customer knowledge, which means products and services are more closely tailored to customer needs and wants. With BI, companies can adapt to their clients more rapidly, consistently delivering relevant customer experience throughout their interaction with clients. In turn, BI boosts customer retention.
Data and Business Intelligence Drives Revenue
Organizations can ask better questions with the aid of BI tools. It is much easier to make comparisons using interactive BI dashboards, for example. Dashboards can instantly identify sales weaknesses and successful products or lucrative customer segments.
BI also informs marketing activities. Contemporary solutions can go as far as grading individual business leads for follow up. Furthermore, BI helps companies derive ideal pricing strategies, staying ahead of competitors, and maximizing customer spend.
Executives Make Better Strategic Decisions With BI
Fast and accurate reporting means that senior executives can make better decisions at a more rapid pace. Indeed, modern BI platforms deliver live data dashboards that lead to proactive decision making. Businesses that respond to market changes faster than their competitors have an undeniable advantage over competitors.
Business intelligence also plays an important role in risk management. The What-If analysis helps executives understand the impact of adverse scenarios and respond more quickly to changing circumstances.
The power of data and BI is not a matter of the theoretical or mere sales rep chit-chat. In practice, business leaders put huge importance on the value of data and business intelligence.
A 2019 Forrester survey found that 89% of companies surveyed considered data a significant business opportunity, with 96% of respondents actively planning to or already implementing data-driven decision making.
In other words, if your organization is not making use of a BI platform to drive business performance, you can be almost certain that your competitors are.
Examples of BI Use Cases
What does a business intelligence platform mean for the practical and day to day? Here are five use cases illustrating how BI drives everyday organizational outcomes.
Leading Insurer
South African insurer Santam deployed a BI product with predictive analytics in order to detect fraud, to speed up the processing of claims (by 50%) and to improve overall decision making. The project led to significant cost reductions, with an overall project ROI of 244%.
Large Fast-Food Chain
McKinsey reports how a restaurant with thousands of outlets is using data to turn its business around, creating happier customers while driving revenue growth. The BI solution focused on helping the chain make more out of its employees, reducing employee turnover. BI helped the company identify the importance of shift length and hands-on management.
A Specialist Retailer
With both a retail store and online presence, REI provides specialty outdoor products through its 12,000-employee business. BI delivers improved customer analytics that gives the retailer an advantage over competitors. Thanks to an REI’s BI platform, the retailer optimized marketing, better identifying where key growth opportunities lie.
Further Education
Illustrating how the ease-of-use factor of BI platforms is a big draw, Portland State University suggests that it found that the accessibility provided by a BI platform delivered benefits in monitoring enrollment and in settling on budgets. Overall, the university suggests that it is highly dependent on BI’s ability to deliver quick access to KPIs and critical reports.
A Global Law Firm
BI can deliver effective solutions to tough problems. Bryan Cave, a law firm with over 800 lawyers at the time, needed a way to shift from hourly billing to fixed pricing. BI delivered the insights that Bryan Cave required to understand how to calculate client bills in a way that delivers the right perception of value to the client.
The above outline clear, practical use-cases for BI. But often, companies are hesitant to deploy software tools such as business intelligence because they perceive that maximizing the utility of these tools will require the ongoing expense, paying for qualified technical staff, or persistent consulting fees.
The Case for Self-Service
Over time, BI platforms developed the ability to offer organizations a high degree of self-service.
In other words, your company’s operational and executive personnel can take advantage of BI without the need to pay for consultants or to employ expensive, in-house technical staff.
Self-service BI not only reduces the costs of business intelligence platforms but also ensures that the key data insights that BI delivers are more accessible across the organization. Self-service BI delivers the following benefits.
One Version of the Truth
With democratic access to data across the organization, all decision-makers have convenient access to the same facts. There’s no need to circulate spreadsheets that may well be out of date by the time it is viewed. Collaborating on data analysis becomes far more convenient.
Users Answer Their Own Questions
Technical teams and consultants will have a specific view of relevant questions, and this view may differ from what’s relevant to the executives that run the day to day operations. Self-service BI enables those executives to ask their own questions as soon as these questions come to mind.
Decisions Are Data-Backed
Senior staff often don’t have the time or the patience to request and wait for a BI-backed report. Self-service BI delivers instantly accessible reporting. In turn, business decisions are more often data-backed than used to be the case. As a result, businesses operate far more efficiently, gaining a competitive advantage.
Self-Service Is Fool-Proof
BI tools can be difficult to manage and use correctly, but self-service tools can be used by anyone that can competently use a productivity suite. That means that everyone in an organization can comfortably use BI tools.
While BI used to be restricted to the technically skilled or indeed to executive teams with a sufficient expense account, self-service means that the entire organization has access to powerful business intelligence tools.
For many organizations, self-service makes a case for BI.
Current Trends in Business Intelligence
I’ve started this article by pointing to the long-standing prominence of business intelligence as a decision-making tool. BI is constantly evolving, growing in capabilities just as technology delivers more and more opportunities to extract insights and predictions from data. I think BI will see advances in the following three areas.
Business Intelligence for Big Data
Big data refers to the growing volume of data collected by organizations and the growing propensity for companies to collect and process more and more data. Big data refers to three growth aspects, more volume, increased velocity, and a greater variety of data.
How can organizations maximize the value of big data? Using a BI tool as a front-end for big data is one way. BI can cut across the panoply of big data sources, stitching together data, and allowing executives to use the simplicity of BI to extract insights from vast big data pools.
Predictive Analytics
By no means a new development, predictive analytics has the power to look beyond the past, making suggestions about what the future holds. It relies on predictive models and algorithms to help executives make future decisions on concrete data-driven predictions rather than hunches or judgments.
However, predictive analytics used to be the preserve of large enterprises with deep pockets. Now predictive analytics is increasingly coming packaged alongside BI tools, making use of the same dashboard-driven, end-user friendly approach.
Augmented Analytics
Some call it the third generation of business intelligence. Augmented analytics boost current BI capabilities by applying AI technologies such as machine learning and natural language processing to the existing BI toolset.
Augmented analytics surfaced a few years ago, but we’re now seeing more widespread use of features such as intuitive, natural language searches. It is set to transform the analytics workflow by making data injection easier and by more readily and intelligently recognizing patterns in data.
The BI Proposition
Surveys show that most companies of scale already deploy business intelligence software. In this article, we’ve made a comprehensive case for the use of BI software. The majority of businesses are making a rational choice in opting for a BI solution.
Have you tried the top business intelligence software solutions such as Carv, Grow.com, Datapine, Tableau, Power-BI, etc.? If so, don’t forget to post a review here.
Besides, with the technical and capital barrier to entry so low, there is little excuse for ignoring the benefits of business intelligence software.
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