Business Intelligence (BI) combines processes, applications, infrastructure, and technologies to help enterprises collect, integrate, analyze, and visualize their corporate data in an easy-to-interpret format that provides actionable intelligence for the business. Utilizing historical, current, and predictive views of the business, BI tools surface their findings in reports, summaries, dashboards, graphs, charts, and maps that provide users with detailed intelligence about the state of the business.
BI tools can democratize data throughout an organization, making it inherently more useful to individual corporate departments. An analytics component can add predictive and prescriptive capabilities that will help the business answer “What could happen?” and “What should happen?” questions, which can help drive business optimization, increase labor utilization, and raise revenue.
BI centers around data collection, data retention, data analysis, and reporting. BI tools collect data from company information systems such as CRM, ERP, and others into a data warehouse, where it can be easily surfaced into visually compelling and simple-to-understand reporting dashboards. If dashboards are built right, users with less context on the data should be able to easily understand it. Analytical tools can pull data from the company’s data warehouse and build models on the data, everything from customer segmentation to customer worth to marketing and customer churn models, which provide visibility into particular customer key performance indicators (KPIs).
Although BI tools are being used in all kinds of industries, there are five use cases in particular that are helping executives and front-line workers leverage their company data in ways that increase profitability and improve their employee's decision-making capabilities. These are:
BI tools can help organizations analyze their sales data, identify business trends, and evaluate revenue performance. This includes monitoring sales pipelines, tracking key sales metrics, and forecasting future sales. Every member of a company’s sales team, from the front-line workers to the executives in the boardroom, should have access to deep, relevant company information. An executive might have a holistic view of the company, but front-line workers can use analytics to ensure customer interactions are positive and, ultimately, profitable.
By looking at historical numbers, and leveraging trending data analyses and behavior patterns, BI tools provide visibility into a business’s entire operation. They can provide sales information on a daily, weekly, monthly, or yearly basis, information that can be used to help predict future sales. Accurate sales and inventory information can help ensure products will be available when the demand is there. By providing granular sales, marketing, and financing data, a business can confidently predict its future demand, ensuring the highest potential profitability for its products or services.
Coupling a BI platform with powerful analytics can help businesses target customers in a highly personalized way. Segmenting customers by age, gender, occupation, household income, marital status, location, and buying behavior provides a company’s marketing department with valuable information that can be used to increase marketing campaign lift, which should drive sales and increase profitability.
Recency, frequency, and monetary (RFM) models can identify the company’s most valuable customers. Considering past purchasing behavior, businesses can use these results to build advertising campaigns that target the company’s most important customers, while also reducing marketing to those who might be too costly to retain.
Comparing potential customers against the company’s database of normal customers can help identify the most promising prospects as well as provide information on how best to target these potential customers. Market basket analysis can also reveal strong cross-sell and up-sell opportunities.
There are few business endeavors that require accurate data as much as supply chain management. From procurement to operations management to logistics, marketing, and, finally delivery, accurate and timely data can ensure the starting raw materials are converted into a finished product that is delivered to the end customer in as timely and profitable a manner as possible.
Without accurate data, supply chain departments can’t optimize their routes, let alone improve their shipping times, or ensure they will have satisfied customers after final delivery. By democratizing data, BI tools make a company’s data much more transparent and useful. Adding analytics elements, such as predictive and prescriptive modeling, can help businesses answer “What if” questions that will reveal any potential supply chain constraints or optimization problems.
With BI and data analytics applied to their supply chains, businesses can monitor each leg of the production process. Visualizing each phase in a BI dashboard can reveal how each leg of the business affects the other, which could reveal potential breakdowns or pricing issues in the process. BI tools can provide real-time actionable intelligence to fix potential problems that might prove costly to the company’s bottom line over the long term.
Having access to real-time data can help finance departments reduce their market risk as well as increase their performance and profitability. BI tools can consolidate financial data from multiple sources and make it available to the important players involved. They can generate financial reports that help identify business trends, perform variance analysis, reveal real-time cash flow, and provide a dashboard that offers a window into a company's financial health at a single glance.
BI dashboards offer exceptional financial reporting capabilities that can turn standard Excel P&L reports, balance sheets, and cash flow statements into dynamic, interactive, and automated reports. Numbers don’t lie, but sometimes they can be well hidden. With drill-down functionality, business users can see into areas that might be problematic. Adding real-time data to a dashboard allows financial analysts to be alerted once a questionable transaction arises.
Reaching operational excellence requires a company to ensure its data collection is seamless, its data management efficient, its data is cleansed, its models are being built on the right data, and the data is administered properly. BI tools can ensure this entire process runs in an optimal way.
For operational efficiency and performance monitoring, BI tools allow organizations to monitor their operational metrics, identify bottlenecks in the process, improve overall department efficiency, and increase profitability. Analyzing production data, tracking key performance indicators (KPIs), and implementing performance dashboards will go a long way toward ensuring an organization becomes data-driven.
At its core, BI is a tool used to tell a story with data, putting stats and metrics into context within a narrative everyone in the organization, from top-level executives to business users and even front-line workers, can easily understand and utilize. Commonly utilized for reporting, performance monitoring, data exploration, and generating operational insights, BI tools specifically help with sales and revenue analysis, customer analytics and segmentation, supply chain optimization, financial performance analysis, and operational efficiency. A good BI system can help businesses save time and money on data gathering, data modeling, data administration, and data visualization.
Numbers don’t lie, but sometimes they are hard to understand. BI’s ability to drill-down into a company’s data on a granular level allows the business to gain visibility on their entire operation.
These are just some of the many use cases for BI. Each organization's needs may vary depending on their industry goals, data availability, and employee capabilities. Businesses wishing to unlock their true potential need to explore how today’s BI tools can provide visibility into a business’s operation as well as turn their operation into a powerful, data driven one.
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