Business Intelligence: What does it mean? And why do you need it?
Businesses are always looking to implement best practices, which give them a leg up over competition. While there are certainly many different ways to pursue these goals, the expanding world of business intelligence technology offers the most effective solutions for today’s highly-modernized marketplace.
Are you confused as to what business intelligence is, and what it can offer? Read on to find out what defines business intelligence, how it can help your business, and why you should already be using it.
What is Business Intelligence?
Business intelligence (BI) refers to using technology to analyze relevant data, providing valuable information that facilitates precise and informed business decisions. This data can be historical, current, and/or predictive in nature, all of which can help an enterprise to make critical decisions and formulate strategic planning that ensures success.
Simply put, BI enables companies to effectively learn about trends or processes that can affect their performance, why these trends are occurring, and what they may do in the future.
The extensive use of BI should no longer be considered optional for companies and IT teams in 2021 and beyond. It’s crucial to understand and employ business intelligence solutions and continue to facilitate digital transformation to remain relevant, effective, and fully engaged with customers or clients.
Why is Business Intelligence important?
Business intelligence has existed in one form or another since the 1960s, but nothing compares to the capabilities of today’s technologies.
Every business is driven by important decisions that determine every aspect of operations — decisions that are largely based upon available data. This isn’t a new concept, but Business Intelligence allows companies to obtain and competently analyze very specific and precise data types while tracking outcomes. All of these factors combine to provide a business with the best possible data analysis and, as a result, optimal decision-making.
The use of business intelligence is not just important — it’s now essential to stay relevant in competitive markets. BI can offer comprehensive and in-depth data and analysis that was largely unavailable previously, at least in terms of its depth and relevancy.
For example, analysts can use Business Intelligence to determine what performance and competitor benchmarks should be, enabling the business to run more efficiently while simultaneously mitigating certain issues. Business Intelligence can also pinpoint market trends to boost sales or revenue, help with staffing and hiring, and ensure better regulatory compliance.
Other examples of Business Intelligence include:
- Tracking performance
- Contrasting data with a competitor
- Pointing out methods to increase profits
- Analyzing consumer preferences and behaviors
- Optimizing daily operations
- Predicting profits and marketing success
- Identifying market trends
- Discovering inefficiencies and irregularities
Businesses and enterprises that avoid extensive use of BI are at risk of being outdated and ultimately outpaced by competitors. Even in situations when an enterprise is not solely based on sales or services, the lack of Business Intelligence can still leave it exposed to inefficiencies regarding operations. In short, businesses in 2021 and beyond have no choice but to implement BI in some form or another—preferably in as many ways as possible.
What kinds of software, tools, and techniques are involved in Business Intelligence?
Below are some of the most popular business intelligence software, tools, and techniques.
Analytics Software & Online Analytical Processing
Online Analytical Processing (OLAP) refers to multidimensional databases that allow a user to query data warehouses and generate reports that can display data from a wide range of different views and perspectives — all of which are superior to the abilities of the standard spreadsheet. Some retail examples of these metrics include store locations, SKUs, time of purchase, employees, and product expiration dates. Analytics software can display metrics in a way that offers valuable and helpful insight.
Data Mining & Management
Data mining is the use of automated analysis to review data and identify certain patterns and irregularities. Sometimes referred to as “data discovery,” it is often the foundation of business intelligence, providing the initial data analysis that can be used for more complex methods.
Data Visualization & Reporting
As the name implies, data visualization involves software that can display complicated data sets, using graphics that are highly-organized and easy to understand. This software allows users to fully comprehend even the most complex of data in a way that is actionable.
Enterprise Data Warehouses
Enterprise Data Warehouses (EDW) are a way to store a business’s data and make it readily available to anyone within the organization. This can be done either using a local physical server or via a cloud server.
Operational Intelligence (OI) is designed to assist in making real-time decisions by leveraging a set of business analytics systems. OI achieves this by analyzing information collected from various data feeds within a business and weighing the data against pre-set external factors.
The Future of Business Intelligence
The technology behind business intelligence is always rapidly progressing. Here are some of the main technologies that will continue to drive BI innovation and improve future outcomes.
Natural Language Processing
Natural language processing (NLP) is a technology that assists machines in learning how to better comprehend human language, while improving interactions between computers and speech. The goal is to improve a machine’s ability to perform daily tasks like data summaries, translations, and more.
Machine Learning (ML) involves the building of computer algorithms that continue to improve over time, as they are used. The longer they are run, these machines “learn” how to make better decisions and analyses, which in turn improves their abilities and also the subsequent performance of any other Business Intelligence technologies with which they are involved.
Artificial intelligence (AI) develops computers and machines that can perform actions more often reserved for humans. AI ultimately seeks to create the level of intelligence found in humans and apply it to machines. It already plays a large role in many types of Business Intelligence technologies.
5G and Cloud Computing
5G is the latest in mobile network technology, offering a vast improvement over 4G in terms of speed and connectivity. When combined with cloud computing, 5G will enable easier and more reliable access to virtual machines for mobile network users, allowing them to use their phones and tablets to connect with and use data-intensive software and hardware outside the office.
The primary and ultimate objective of Business Intelligence is to streamline operations and encourage optimized business decisions– thus empowering organizations to maximize their revenue, boost efficiency, and obtain competitive advantages over industry rivals. The future of BI, therefore, looks like more and more integration into all sectors and company sizes. If your business is still ignoring or disregarding the many benefits offered by Business Intelligence technology, it’s time to get on board, or risk being at a permanent disadvantage.