How to Use Business Intelligence and Artificial Intelligence to Gain Competitive Advantage?
When we talk about competitive advantage, we consider a company's ability to create goods or services more effectively than its competitors. As technology and data analysis tools advance, data science is enabling organizations to identify how their processes work together and where there is space for development so that they can obtain a more thorough understanding of their business.
By embracing the fusion of Business Intelligence and Artificial Intelligence, businesses can turn enormous amounts of data into cohesive plans of action. Business Intelligence software is a technology that collects, stores, accesses, and analyses data to assist business users in making better decisions. Artificial intelligence, on the other hand, is a way to create software that thinks intelligently like humans.
In this article, we will walk you through the importance of both AI and BI, how they can be used to gain a competitive advantage, along with their differences and synergies.
What is Business Intelligence?
Business Intelligence (BI) powered applications can ingest corporate data and display it in understandable ways, such as reports, dashboards, graphs, and charts. Business Intelligence tools enable corporations to access a variety of data types, including static and structured data, including historical and current data from social media and internal and external sources. This information can be analyzed by users to gain insights into how a business is performing.
Business Intelligence is not only about producing reports - although it does not instruct business users on what to do or what will happen if they follow a particular path, BI provides a way for people to analyze data to understand trends and derive insights.
Businesses can utilize the knowledge they acquire from data analysis and business intelligence to make better company decisions, recognize difficulties or problems, detect market trends, and discover new revenue opportunities.
In order to address various information needs, a wide range of data analysis tools are combined in business intelligence. Most are supported by both standard and self-service BI tools. Below are some of the BI tools that are accessible to organizations:
Types of BI Tools
Ad Hoc Analysis: It is the process of creating and executing queries to research particular business problems. Although ad hoc queries are often made on the spot, they frequently end up being executed regularly, with the analytics findings being included in dashboards and reports.
Online Analytical Processing: OLAP tools, one of the first BI technologies, allow users to analyze data using numerous dimensions, making them ideal for challenging queries and calculations.
Mobile BI: Smartphones and tablets can now access BI dashboards and applications due to Business Intelligence. Mobile BI tools are often made with an emphasis on usability and are frequently used for data viewing rather than for data analysis.
Real-time BI: To provide users with an up-to-date perspective of business operations, customer behavior, financial markets, and other areas of interest, real-time BI systems analyze data as it is created, collected, and processed.
Operational Intelligence: This is a type of real-time analytics that provides data to managers and front-line employees in operational business processes. OI applications are made to facilitate operational decision-making and speed up problem-solving.
Open Source BI: Open source BI software often comes in two versions: A community edition that is free to use and a commercial release that requires a subscription and offers technical support from the vendor. The source code is also accessible to BI teams for development uses.
Location Intelligence: Users can examine the location and geospatial data using this specific type of BI, which also includes functionality for map-based data visualization. It provides information on the geographic components of corporate processes and data.
How Does Business Intelligence Work?
Businesses have questions to be solved and goals to be achieved. In order to answer these questions and monitor performance against these objectives, they collect the relevant data, analyze it, and decide steps to be taken to achieve their goals.
On the technical side, systems used by businesses are mined for raw data. The data is processed and stored in files, applications, data warehouses, and the cloud. Users can access the data once it has been stored and begin the analysis process to provide answers to business problems.
Business Intelligence tools also include data visualization tools, which turn raw data into charts or graphs and present them to important stakeholders or decision-makers. BI has developed over the last few years to now incorporate additional processes and activities to help improve performance.
The business intelligence processes include:
Let’s now have a look at the top 6 reasons that having a great BI system is important for any business.
The Impact of Business Intelligence on the Quality of Decision Making
Ability to gain customer insights: Businesses can understand their customers by analyzing their buying patterns, which helps them create better products and offer better services to their customers.
Improved business operations visibility: Using Business Intelligence helps organizations have better control over their business processes. They have better visibility of the operations going on in the organization, which helps to rectify any error rather quickly.
Get actionable insights: While making any business decision, it is important to have enough data to back it up. The use of Business Intelligence can help get actionable insights that actually enable businesses to take any action instead of just a ‘feels good to hear’ number.
Real-time data availability: Business Intelligence software provides real-time data at all times. It decreases the risk of any possible human error while creating important data reports. Real-time data enables organizations to take on-the-spot decisions and keeps people informed about the health of the company at all times.
Better marketing efforts: Business Intelligence tools provide the marketing team with a convenient way to access data regarding current and past campaigns. This helps them create better marketing campaigns that offer a higher return on investment.
Gives the business a competitive advantage: Business Intelligence platforms allow organizations to gain insight into what their competitors are doing and enable them to make informed and educated decisions accordingly.
Along with all the other benefits, the biggest benefit of using Business Intelligence is having a competitive advantage. In today's market, many mid-sized firms are competing with online retailers and large organizations that can offer lower prices to their customers. In order to compete with them and make informed decisions, managers must utilize their data to gain a competitive advantage in business. Let’s have a look at how BI can help organizations gain a competitive advantage.
How to Use BI to Gain Competitive Advantage in Business?
#1 Find More Sales Opportunities
Sales managers can instantly discover which products consumers are buying and, more crucially, which products are in decline. By tracking customer purchases on a daily, weekly, monthly, or annual basis, you can immediately visualize customer spending trends. Recognizing these patterns reveals new sales opportunities where cross-selling complementary products is a significant opportunity.
For instance, your business may sell washing machines and dryers. Even if a consumer might simply need to replace their washing machine, you can encourage them to buy the pair by bundling them together at a very alluring price.
#2 Improve Customer Retention Rate
Giving your sales staff access to customer information like purchasing trends, prior feedback, and behavior gives them clear insights into what your customers really want and gives them the power to identify declining customers fast. With this information, the sales team can take appropriate action and reach out to customers with relevant offers and discount coupons.
#3 Measure Over- and Under-Stock
The system you use to manage your inventory can be streamlined to significantly cut back on needless spending. Without overstocking, the objective is to keep enough inventory on hand to fulfill client orders. Overstocking wastes money that would be better spent in other business facets. By using Business Intelligence Software, you can monitor your inventory turns by each product. Over time it becomes easy to see how much supply you need on hand.
#4 Spot Inefficient Business Processes
You can view useful data about company performance, productivity, projects, and much more with the use of business intelligence. This is a wonderful chance to look at the large picture and identify any areas where things might not be going as predicted or estimated. Then, you can make adjustments and enhance business procedures using these insights.
#5 Increase the Speed and Accuracy of Reporting
With business intelligence, generating reports becomes quick and accurate as it eliminates the use of time-consuming and prone to errors excel spreadsheets. Using BI, managers can build reports, dive deeper, view the underlying data that the reports are based on, and decide what to do depending on the most recent information.
#6 Discover Business Trends
The majority of executives have a good understanding of how their company is structured generally, but using Business intelligence can help discover unidentified opportunities and address unrecognized problems. For example, you can find items that didn't have the margin you were expecting, customers that didn't have the profitability you were expecting, vendors that weren't performing the way you expected, and much more.
#7 Set Competitive Prices
The information gathered from historical data and competitor analysis makes BI a key element for making revenue management decisions. It enables businesses to set competitive prices for their products and services, which ultimately improves sales and provides a competitive advantage. Using BI, the rates and availability of your products and services will be optimized to reflect the existing demand with the objective of maximizing benefits.
#8 Determine Changes in Consumer Demands
The demands of consumers are ever-changing. Thus, identifying the latest trends in the market and building a strategy around them is necessary to give your business a competitive advantage. BI software allows employees to gather relevant market data and analyze it quickly. This data can be used to enhance the quality of products and services and introduce new products according to shifting consumer demands.
Business Intelligence in Support of Business Processes Management
Business Process Management (BPM) refers to a specific information system used to enhance business processes through monitoring, tracking, and comparing process performance to strategic objectives. While BPM focuses on process optimization, BI examines processes to provide data that may be used to make larger, company-wide improvements.
The combined abilities of BI and BPM are almost too tempting to be ignored. It is possible for organizations to become much more efficient by incorporating crucial facts and information into daily operations. As a result, BI has the potential to transform your business processes totally.
- Combine Understanding With Action: Almost any business process can benefit from the additional insight that BI provides; thus, there is no harm in incorporating BI into all elements of your business processes, even if the goal of BPM software is to improve processes continuously.
- Intelligent Processes: By enhancing process transparency, BI enables employees to operate more efficiently. Through its intelligence, BI solutions help businesses stay up to the rapid technological change rate.
Analytics is an essential part of BI that enables more strategic decisions about corporate processes. With embedded analytics guiding BI in your business processes, you can eventually work toward projecting likely outcomes of future process adjustments and taking advantage of prescriptive analytics, which uses BI analytics to help identify the process changes that will have the greatest positive impact going forward.
Thus, combining BI and BPM creates data warehouses that compile information from numerous systems for managers and end-users to study and evaluate to make better decisions. This encourages improved financial forecasts, client retention, and competitive advantages derived from insightful observations.
However, as businesses attempt to make sense of the enormous volumes of data they are acquiring, they run into a variety of business intelligence problems. Due to these issues, making BI operations effective, efficient, and useful is more challenging. Below are some of the BI challenges that you can face.
Challenges of Business Intelligence
- Bringing Data from Various Source Systems Together: As the number of data sources increases, many firms will need to acquire data for analysis from numerous databases, big data platforms, and business apps both on-premises and on the web. This restricts scalability and increases the time required to examine data.
- Problems with Data Quality: The quality of the data on which BI apps are built determines how accurate they are. Access to high-quality data is necessary for users before they can begin any BI projects. In the haste to collect data for analysis, many businesses overlook data quality or think that issues may be resolved after the data has been gathered.
- Information Silos With Inconsistencies: Since data completeness is necessary for successful BI, it is difficult for BI tools to obtain siloed data with variable permission levels and security settings. Silos must be broken, and the data within them unified for BI and data management groups to have the desired impact on corporate decision-making.
- End-User Training: Corporate executives and managers are also required to participate in training and change management initiatives related to BI projects.
- Low Adoption of BI Tools: End-users typically take the easiest path and return to tried and tested technologies like Excel or SaaS services. Establishing a strong use case that right away exhibits business benefits and inspires staff to adopt a new BI solution is crucial when you are just getting started with a deployment.
Applications of BI
- BI in Logistics: One of the most complicated businesses is logistics, which necessitates regular data updates, reliable supply chain tracking, and the management of huge datasets that frequently require urgent attention. BI solutions help ensure that all the bits and pieces of the logistics sector function properly.
- BI in Finance: No business can function without sufficient financial services, and this is where business intelligence enters the scene as the backbone of this rewarding but demanding sector. BI solutions provide you with speed needed to improve productivity and give access to real-time information and automated calculations.
- BI in Healthcare: Not only would using BI systems for healthcare reduce patient wait times, but it will also enhance the standard of care provided throughout the facility. It becomes easy to combine disparate data from several departments into a single healthcare dashboard that focuses on critical performance indicators.
- BI in Retail: Modern business intelligence offers the proper framework to support retailers in their data management procedures, ensuring up-to-date data at all times so experts can make prompt but accurate decisions.
- BI in Manufacturing: Manufacturing processes can be readily adjusted and improved by using a dashboard that combines crucial data through real-time analytics, including features like tremendous interactivity, and can forecast what will happen in the future.
- BI in Digital Media: Businesses can enhance decision-making processes, more effectively gauge audience feedback, evaluate any kind of content they create, and keep up with all the market trends by doing in-depth research of all the data in hand.
- BI in FMCG: Implementing business intelligence tools solutions can assist FMCG managers in cutting costs associated with inventory and supply as well as visualizing patterns of customer purchase habits in order to provide the best experiences and products in the competitive industry.
Now that you understand the importance of Business Intelligence, its applications, and how it can be used to gain a competitive advantage for your business, let’s move to the second part of our article and have a look at the Artificial Intelligence aspect.
What is Artificial Intelligence?
Artificial Intelligence is a technology that enables computer applications and machines to mimic human intelligence, learning from experience through iterative processing and algorithmic training. You can think of AI as being a form of intelligence that is utilized to solve issues, offer solutions, answer questions, make predictions, or provide strategic suggestions. As Artificial intelligence is capable of doing all these things, it has become incredibly important to modern businesses.
Due to advances in machine learning and deep learning, AI systems have entered almost every sector of the tech industry. Below are some ways in which you interact with AI on a daily basis:
- To find the best result for a search, search engines like Google use AI (algorithms like Rankbrain)
- AI is used in automated marketing emails to choose which emails to send based on your interactions with a company or website.
- On the basis of past behavior, interests, and search queries, online ads employ AI to decide which users should view a particular advertisement.
- Online messengers are increasingly using chatbots so that bigger firms can quickly and effectively serve customers.
- AI is used to discover the best answer for the long tail keywords and conversational queries when conducted via voice searches on smart speakers or even smartphones.
How Does Artificial Intelligence Work?
Large data sets and clever, repeated processing algorithms are the foundation of how Artificial Intelligence software operates. These systems use the analyzed data to learn from patterns and attributes. Every time an AI system processes a batch of data, it evaluates its own performance, adds to its knowledge base, and tests it.
AI can run through thousands or even millions of tasks swiftly as it does not require breaks, which allows it to learn a great deal in very little time and excel at whatever task it is being trained to accomplish. The key, though, is to grasp the notion that AI isn’t just a particular computer program or application but rather an entire discipline or science.
Building a computer system that can simulate human behavior and employ human-like reasoning to solve complicated issues is the aim of AI science. To achieve this goal, AI systems use a wide range of diverse technologies as well as a vast array of methods and procedures, which include the following:
Unlike Business Intelligence, which analyzes data and leaves the decision-making aspect to human beings, Artificial Intelligence makes decisions after analyzing data. And as businesses continue to deploy AI systems in their operations, they begin to reap tangible benefits, including material gains. Below are the top 6 benefits that depict the importance of AI in today's business world.
The Emerging Need for Artificial Intelligence
- Efficiency and productivity gains: The velocity and scale at which AI technology completes tasks surpass that of humans. By removing such tasks from employees’ responsibilities, AI enables human workers to transition to higher-value tasks that technology cannot do. This enables businesses to maximize the skills of their human resources while minimizing the costs involved with routine operations that can be handled by AI.
- Improved speed of business: Being quick and proactive has become a necessity for every business in cut-throat competitive scenario these days. Shorter development cycles and a shorter period from conception to commercialization are made possible by AI, which results in a higher and more immediate return on investment for development spending.
- New capabilities and business model expansion: Data and analytics deployment within the enterprise creates new potential for firms to participate in different areas. For instance, with the massive amounts of data that autonomous car companies are gathering, they may be able to find new insurance-related revenue streams, and an insurance firm may be able to enter the fleet management market by applying AI to its enormous data repositories.
- Better customer service: 24/7 customer service can be provided with the use of AI-driven chatbots. AI has enabled businesses to automate communications using emails, online chats, and also telephone calls.
- Improved monitoring: Organizations can incorporate almost-instantaneous monitoring capabilities that can alert them to issues, recommend actions, and in some circumstances, even trigger a response, thanks to AI’s power to take in and interpret large amounts of data in real-time.
- Better quality and reduction of human error: When AI and machine learning are combined with a tool like RPA, which automates routine and rule-based tasks, the combination not only speeds up operations and reduces errors, but it can also be trained to become better over time and handle a wider range of tasks.
Applications of AI
- AI in Business: Businesses are adopting AI to improve relationships with their clients and to handle activities that would normally be completed by humans but can be carried out quickly through robotic process automation. AI has the ability to boost sales, do predictive analysis, improve consumer engagement, and create effective and efficient work procedures.
- AI in Education: Digital technology can be used to provide smart content through online study resources, e-conferencing, etc., as well as to grade assignments. Admission portals are effectively using AI to assist students in finding the courses and colleges that best suit their interests and career aspirations. Online courses, intelligent AI tutors, online career counseling, and virtual facilitators are some AI applications in the education sector.
- AI in Healthcare: In addition to employing computing technology to diagnose diseases more accurately and quickly, artificial intelligence has many important applications since sophisticated algorithms may be used to simulate human cognition when analyzing and interpreting complex medical and healthcare data.
- AI in Banking: Almost every bank offers its customers online apps where they can track their account activity, make online payments, and detect anti-money laundering patterns as well as payment frauds.
- AI in Finance: The primary goal of AI-based financial technology is to examine the dynamism of stock trading carefully. The finance sector is integrating adaptive intelligence, algorithmic trading, and machine learning into financial processes using various artificial intelligence applications.
- AI in Gaming: AI has the ability to make even the most basic video games lively, entertaining, and interactive by implementing augmented reality and virtual reality gaming to immerse players in a real environment.
Businesses are increasingly realizing the importance of Artificial Intelligence, and the successful ones are already creating their strategies around it. In a poll of 1600 senior business decision-makers, 76% said that AI was vital for the success of their organization. The study also found that 64% of business owners believed that their organization’s growth depended on the large-scale adoption of AI. So, let’s have a look at how Artificial Intelligence can create a competitive advantage for businesses.
How Can Artificial Intelligence Create a Competitive Advantage in Business?
#1 Streamlining Business Operations
One significant advantage that AI can provide is the ability to take over more routine, administrative, and low-involvement tasks while leaving the more difficult, expertise-requiring work to the employees. Harvard Business Review conducted research that found that managers already believe that AI technology will not only handle more tedious tasks but will also make their work more interesting by maximizing the use of their knowledge, expertise, interpersonal skills, and judgment in challenging circumstances.
The ability to trust a smart technology to handle background tasks allows managers to focus on tasks that demand actual managerial insight, such as taking the lead on a crucial client case or facilitating conversations within the organization to establish community and culture.
#2 High-Efficiency Marketing And Better ROI
Because of its capacity to learn and train based on data, AI can provide a wealth of insights on how to market, who to market to, where to market, and even why to market. AI can offer numerous insights - and they stem from the basic principles that:
- Companies already possess a substantial amount of customer data.
- AI provides objective, highly data-driven insights that are supported by the information that businesses already have.
AI has the capability to get to know a consumer on a personal level by studying their behavioral patterns. It provides a quick way to better understand customer wants and provide them with a top-notch experience, converting them into loyal customers and even brand advocates, generating income through strong relationships.
#3 Security and Safety
The systems put in place within the corporation will be able to rapidly identify breaches or threats to security, be it data protection, machine functioning in a plant, or even surveillance in a business site, thanks to AI's capacity to track trends (and hence identify any deviations).
Particularly in the context of cybersecurity, AI solutions can enable the technology to anticipate and prevent threats as well as spot any irregularities with more precision than any human response. AI technologies can recognize and highlight any behavior that is out of the norm for any specific person since they have the capacity to learn user behavior patterns.
#4 Predictive Analytics
AI now analyses preferences and sentiments in enormous amounts of data, including text, voice, images, digital news feeds, and social media, to spot future shifts in everything from leisure spending and travel patterns to company credit worthiness.
Artificial Intelligence has evolved from a technology that finds relationships in data and predicts existing trends more accurately to a technology that spots future shifts in all of these areas. By establishing connections between embedded traits, AI can now identify potential disruptors, enabling businesses to better prepare for disruptive occurrences.
#5 Real-Time Optimization
Companies are now able to execute operations and change strategies in real-time due to Artificial Intelligence. Currently, machine learning algorithms may instantaneously and automatically boost sales campaigns or, on the other end of the spectrum, delay the release of products that might compete with other product lines for sales.
Edge computing, a distributed computing method that permits data storage and machine learning models to remain more local, is one reason why this advancement is now achievable. AI can change tactics immediately without sending data to the cloud while still protecting data security and privacy, avoiding problems with cross-border data flows, especially as many jurisdictions start to attempt to decrease data transfer.
#6 Drives Accurate Financial Decisions
Because of AI, businesses can employ automated machines as indicators to examine a whole perspective of their goals and make the best decisions for the business. Business owners can find and fix issues with their organizations, including facilitating financial decisions, by using AI software.
It enables precise forecasting of the organizational financial disparities, corrects human errors in financial strategy planning, and subsequently directs the business toward the accomplishment of its objectives. This is a fantastic approach to identifying financial gaps within a company early enough before they result in any significant harm in the future.
#7 Personalized Recommendations
AI enables businesses to give highly personalized offerings to their customers at the appropriate moment and in the correct context while gradually ingesting more procedures. From personalized emailing to forecasts for the staffing of warehouses and from pricing strategies to supply chain implementation, all activity areas within a business can experience rapid growth due to AI.
Better decision-making is supported by AI, which improves productivity and profits. AI also quickens the acquisition of competitive advantage by serving as a smart assistant, ultimately enhancing marketing ROI and increasing data security.
After having a look at the competitive advantages that both AI and BI have to offer, some obvious questions arise - What is the exact difference between the two? Do they have any similarities? Are any of them dependent on the other?
Well, in a corporate setting, business intelligence and artificial intelligence are becoming more and more important yet frequently misunderstood tools. The enterprise applications of AI and BI are significant, and occasionally they overlap. However, there are significant distinctions between these technologies that companies should be aware of.
Below is an overview of the key differences and similarities between AI and BI.
AI Vs. BI: Differences and Synergies
Despite all the buzz surrounding intelligent, data-driven decision-making, Business Intelligence and Artificial Intelligence are often thought to be synonymous. Despite the fact that both assist organizations in making important decisions, there are significant differences between the two. AI refers to artificial intelligence that is similar to human intelligence, whereas BI refers to intelligent decision-making.
The major differences between AI and BI are as below:
So, does business intelligence need artificial intelligence to make a business successful? Let's have a look at the answer to this question in detail.
Does Business Intelligence Need Artificial Intelligence?
BI and AI are separate yet complementary concepts. While "intelligence" in BI refers to the more intelligent business decisions that may be made as a result of data analysis and visualization, "intelligence" in AI refers to computer intelligence.
Businesses can use BI to organize the enormous amounts of data they gather. But attractive dashboards and visualizations might not always be enough. AI can help BI systems extract meaningful, actionable insights from the data they study.
An AI-powered system can finely define the significance of each data piece and aid human operators in comprehending how that data may be used to make actual business decisions. Companies can transform massive amounts of data into well-thought-out plans of action by leveraging the combination of AI and BI.
Better, more adaptable BI tools may also be developed using AI. These tools can learn what sorts of recommendations and analyses are most helpful and self-adjust as they process more data, engage with users, and internalize the results that their recommendations produce. In the end, AI may be the source of incremental advancements that elevate BI solutions to the next level as opposed to human software programmers.
Let's have a look at how AI and BI have revolutionized business practices in this cut-throat competitive era -
Business Practices Revolutionized Through Artificial Intelligence and Business Intelligence
AI expands BI functionality: Applications for business intelligence perform more effectively due to artificial intelligence. BI is better equipped with AI to deconstruct massive amounts of data into granular insights, enabling organizations to comprehend the value of smaller components into a larger picture.
Simplifies a complex process: Even with BI technologies, surveying massive data is frequently a difficult process. Professional data analysts must examine hundreds of charts and dashboards to obtain the necessary insights. However, using AI technology can make the process simpler. The simplification results from NLP and machine learning, which are AI-based technologies, working to bridge the gap between machine and human communication.
Solves issues related to talent storage: BI displays data findings on a visual dashboard; however, with data coming in from various sources, dashboards struggle to present the data in a way that is simple to understand. With AI, however, the data can be specified at scale, making it easier to derive useful insights.
Despite significant differences, AI and BI make a powerful team. Organizations would be well to stop thinking of AI and BI as two totally different technologies in the future and instead explore and invest in ways to fully realize the potential they have to work together to help businesses overcome their greatest difficulties and reach new heights.
Numerous tech businesses, from well-known behemoths to up-and-coming startups, are already attempting to profit from this strategy. By merging AI algorithms, distributed systems, human-computer interaction, and software engineering, IBM's research division aims to rethink enterprise design and alter business processes.
DataRobot, a business that creates business intelligence solutions based on predictive modeling and machine learning, was featured in an article in CIO Magazine. According to CIO, DataRobot assisted a healthcare organization in integrating AI into its business intelligence (BI) systems. "240 doctors and nurses receive the predictions and recommendations right in their PowerBI dashboards, which they can access through tablets and smartphones," the publication reports. The healthcare provider was able to identify high-risk individuals and create preventative treatment regimens with the aid of DataRobot.
Thus, the ideal formula for delivering analytical solutions and gaining a competitive advantage in every business setting is BI and AI combined. Business Intelligence software starts off by looking at historical data. On the basis of the data at hand, Artificial Intelligence tools then forecast future actions. Best of both worlds!
In this internet age, possessing relevant data is the key to the success of every business. Predictive analytics help companies grow and gain a competitive advantage. Bus ... continue reading