What is business intelligence?
Business intelligence (BI) refers to the process of making use of data collection, data analysis and data visualization in order to enhance the company’s decision-making. Raw data needs to be processed with the use of business intelligence tools — i.e. types of online platforms and software — and presented in a visually approachable way so that all people within the organization can get actionable insights for the most strategic business decisions. To put it simply, the more valid the conclusions you draw from your historical and current data, the more likely you are to push your company in the right direction and stimulate the overall business’s growth.
How does BI work?
There are four major steps that needs to be taken in order to transform raw data into valuable BI insights:
- Collecting structured and unstructured data from a variety of sources, transforming the data into a comprehensive set and storing it in an accessible central location.
- Data mining and data analyzing, which means using business analytics to explore data and make predictions targeted at achieving business goals. Data mining tools make use of things like artificial intelligence and machine learning to sift through the vast amounts of information and recognize patterns that reflect the status quo of business, while online analytical processing (OLAP) can help summarize the information obtained from multiple sources and make a forecast for the future. A well-conducted business analysis process helps uncover trends, identify areas for improvement, eliminate inefficiencies, solve problems, analyze customer behavior, adapt to changes and so on.
- Using data visualizations to present findings in an understandable way, with the use of interactive dashboards, illustrative graphs, charts, etc.
- Taking prompt action based on the insights so that both short-term and long-term objectives can be accomplished.
What’s the difference between traditional BI and self-service BI models?
The umbrella term “business intelligence” comprises more than just one approach. Basically, whether a given model can be described as traditional or modern depends on the degree to which BI tools and platforms are accessible to all business users.
Traditional business intelligence requires almost constant involvement of data analytics professionals and IT specialists who have the sole access to a given BI tool, gather information and then provide users who have submitted their queries with specific reports. Self-service business intelligence, on the other hand, allows various users to use data independently of IT specialists or data analysts; everyone who is interested in obtaining information can access the tool, type in their request and instantly get visualized reports, which is why the self-service BI model is often described as more interactive and offering ready-to-use solutions.
Where can BI be used?
BI is used by various departments that, depending on the specific goals they want to achieve, use BI tools to conduct different sets of tasks. These tasks may include monitoring customer preferences and shopping patterns (sales department), tracking campaigns and assessing their effectiveness (marketing), analyzing factors affecting profit and loss (finance), and reviewing operational processes to optimize the company’s supply chain (operations). BI tools help teams draw accurate conclusions about the current state of a given department and share them with others so that new opportunities for growth can be identified and more profitable decisions can be made.
What are the best BI platforms?
There are many BI platforms that offer ad hoc reporting and advanced data visualization that fuel data-driven decisions. The best tools enable users to derive big data from many sources, generate comprehensive results based on a thorough analysis of every single aspect of business and present those results in a fully approachable and visually appealing way. Some of the most frequently recommended modern business intelligence tools include Microsoft Power BI, Tableau Desktop, Oracle BI, SAP BusinessObjects, SAS BI, Domo, Zoho Analytics and Dundas BI.
What are real-life examples of successful BI implementation?
Numerous companies at some point faced some growth-impeding obstacles that forced them to look for a remedy. Here are several examples of companies and organizations that decided to apply some BI solutions and experienced a major switch in the way they had been operating:
- Lotte.com — this Korean internet shopping mall managed to increase profits thanks to analyzing customer behavior and improving the purchasing process on their website;
- Coca-Cola Bottling Company — they maximized their efficiency by automating their manual reporting processes, which helped them get more detailed and extensive data;
- New York Shipping Exchange — thanks to reducing their dependence on IT specialists, centralizing their data and making the information much more available, they managed to significantly improve their shipping process;
- Des Moines Public Schools — thanks to advanced data analytics, they became more capable of identifying at-risk students and providing them with necessary help.
Final thoughts on business intelligence
Businesses differ, so there are no one-size-fits-all solutions to problems, difficulties or dilemmas that each company may have to struggle with. In order to find a suitable remedy and get a chance to make a real difference, you need to have access to solid and reliable data obtained by means of effective tools. Understanding and following business intelligence guidelines can lead you towards achieving your desirable business goals and making your company one of the key players on the market.