Most companies rely on insights from business data to assess their current performance and make future decisions. However, the large chunks of data that companies receive in the initial stages exist in raw or unstructured form. We need to refine it to draw actionable insights from such data for our business organization. This is precisely where the concept of Business Intelligence (BI) gained its prominence.
As a diverse concept, Business Intelligence encompasses several elements. One needs to consider all of them in their entirety to understand the true meaning of the concept.
This blog will cover the following aspects:
- What is Business Intelligence?
- Different stages of Business Intelligence
- Why is Business Intelligence important?
What is Business Intelligence?
In simple language, Business Intelligence (BI) refers to those tools and methods that aid the conversion of basic data into its usable form or processed data. Business organizations use it to make actionable decisions. Technology plays a key role in the whole process; it processes unstructured data into a form that users can use to extract meaningful insights.
Generally, managers, business executives, and other end users use the valuable insights from the vast amounts of raw data through Business Intelligence. Once they get the requisite piece of information in a structured format, they study it carefully to evaluate opportunities and threats to their company in the wake of the changing market dynamics. Next, based on their understanding, they make informed business decisions with the view of steering their business organization through to the path of progress and growth.
Whether it is about the launch of a new product or resolving an existing issue, real-time information is essential in both cases. It enables employees in leadership roles to arrive at prompt decisions. While the world of business abounds with opportunities, it is also highly competitive. With the entry of new players, it is becoming more and more competitive day by day. To stay on the hunt, companies need to emphasize their strengths. At the same time, they also need to identify their weaknesses and eliminate them to get a competitive edge over their rivals.
Business Intelligence tools enable companies to address existing challenges professionally. Being in line with real-time data, its tools keep team leaders of business organizations up-to-date with the changing market dynamics. This enables them to better respond to the changing market trends and make relevant decisions to pave the path for the growth of their organization.
Companies follow a systematic procedure while handling vast amounts of unstructured and raw data through Business Intelligence (BI) tools. For effective decision-making using these tools, business firms generally follow a complete cycle involving the following steps:
- Data collection: It makes the staff members of a company capable of looking for answers to pertinent questions. Also, it enables you to review results and forecast future trends and probabilities. Data collection is also essential for the integrity and cohesion of research. You can collect data both internally and externally in which can be either in a structured or unstructured format. You can collect it either from a flat file or SQL server.
- Data analysis: Following the collection of data, the next step is to review it. Those who are concerned with the process of reviewing data generally perform a detailed analysis. After examining the collected data from various angles, they raise relevant queries.
- Data visualization: The final step in the process is to represent the data or piece of information in hand in the form of a dashboard. This apart, the concerned staff members of a business organization may also visualize data by preparing reports.
The above steps may sound fundamental by nature. But a lot goes into the execution of these steps. Read on to know more about the different processes of stages of Business Intelligence by which companies translate vast amounts of unstructured or raw data into meaningful insights.
Different stages of Business Intelligence
Professionals perceive the various stages of business intelligence as its processes. In line with it, they view data analysis and the creation of reports in different lenses. This perception adds one more step to the overall process of business intelligence.
Here’s a detailed insight into all these steps.
Business Intelligence begins with the collection of data from different sources. Those who concern themselves with the collection of data include data from both internal and external sources and keep it in a centralized database or location.
Following the collection of data, it needs to be processed, formatted, and cleaned. The different sources from which information is obtained in structured, unstructured, or semi structured forms include the following:
- Feedback survey
- Websites of competitors
Data analysis is the second and one of the indispensable steps in the overall processes of Business Intelligence. This is because it involves the processing of raw data gathered from different sources into actionable insights. Based on the latter, analysts make future predictions.
The different categories of data analysis include the following:
- Data visualization: This category primarily relates to the processing of big data. Analysts present the resulting insights in pictorial or graphical forms to simplify data analysis.
- Software-based analysis: As the name suggests, this category involves the use of software tools such as QlikView, BI, and SAP for the analysis of data.
- Spreadsheet analysis: In this category, analysts may either use a visualization tool like Power BI or MS Excel.
Creation of reports
With the requisite information at their fingertips, executives and other team members feel empowered to prepare a data-driven report. At the time of preparing the report, a concerned team member pays attention to make it understandable to all. They also use different kinds of visualization software tools for this purpose. Some such tools include Tableau, Power BI, and others.
As far as creating reports are concerned, there are two schools of thought. While some people tag it with data analysis, others treat it as a different step altogether.
Every technical process has an ending, just like its beginning. The same rule applies to Business Intelligence. Tracking or monitoring real-time data is the last step in the overall process of BI.
Aside from helping the executives of a business, the organization spot the latter’s key performance indicators (KPIs). It also gives them an understanding of where they stand in terms of attaining their organizational goals. With the knowledge of these details, they can either formulate a new business strategy or revise the existing ones to achieve desired outcomes.
In general, Business Intelligence importance involves multiple aspects. The aforementioned steps simplify various tasks related to these aspects.
The importance of Business Intelligence
The records of a company pave the way for a better future. Most companies learn from their past performance to secure their future. The importance of Business Intelligence lies in its ability to display both historical and real-time data. This way, it enables your business organizations to draw a comparison between their performances in the past and present.
The current performance of a business organization can be either better or worse than its performance in the past. In both cases, a company needs to know about the factors that are responsible for such outcomes. Business Intelligence helps you identify your company’s strengths or weaknesses. It empowers a company’s data analysts to set competitor benchmarks to provide you with a competitive edge over the competitors in the market.
The usefulness of BI depends on how a company handles its tools. If dealt in the right way, it can offer effective solutions to all existing challenges and needs of a business firm. Whether a company has requirements of recruitment or compliance, Business Intelligence comes in handy in both cases.
Further, the importance of Business Intelligence in business becomes crystal clear from its role in sharing actionable insights for making decisions related to the following aspects:
Identify ways to increase profit
- Evaluation of customer behavior
- Differentiation of a company’s data with that of its competitors
- Performance monitoring
- Optimization of operations
- Prediction of the chances of success
- Identification of market trends
Ways in which Business Intelligence can be useful to a company
In the current digital world, data is the biggest asset to business organizations. Most companies look for ways to leverage existing technologies into capturing data and analyzing them to gain an upper hand in decision making. Improving the business operations of companies aside, the ability to make the right decisions also helps them enhance their performance graph in several other ways.
Business Intelligence in decision-making currently governs almost all the business activities of companies. This aspect brings several benefits to the table for companies, including the following:
A good understanding of customer behavior
The importance of Business Intelligence stems from how it helps a business organization examine the behavior of its customers. Along with information about the buying habits of customers, it also provides insights into their preferred items. A good understanding of these details helps you either formulate or modify its strategy to address the needs of its customers. It proves to be helpful in many ways.
For instance, it reduces customer returns and also assists you in retaining the customers by fostering a strong business relationship with them based on mutual trust.
Optimization of business processes
For the timely completion of tasks, business organizations distribute them among different departments. Larger-sized companies are likely to have more departments in comparison to those that are smaller in size.
Sending requisite information to those departments manually can take up a lot of time and effort. Business Intelligence helps your business firm leverage augmented analytics, so its different departments receive valuable insights in time for the swift execution of tasks.
Detailed analysis of budget, forecast, and finances
Business Intelligence tools allow companies to incorporate multiple systems and ensure their efficient functioning through a streamlined process. It helps your company in planning, managing, and analyzing budgets. Plus, it also allows you to draw insights into future projections.
Business Intelligence, which includes a wide range of tools and methods for processing large chunks of raw data into its refined form, has multiple uses for business organizations. From simplifying the decision-making process to analyzing customer behavior and making predictions about the possible business outcomes, the tools and actionable insights of Business Intelligence offers solutions to all kinds of needs and challenges of companies.