The worlds of business and technology have been practically merged with each other nowadays, and it seems as if the survival of one without the other is quite impossible. The latest technological advancements we see nowadays come through the doors of businesses that spend a tremendous amount of money on research. However, technology itself is also playing a huge role in helping business owners realize what’s what within their own organization. The biggest role played in this, is the one of Business Intelligence!
Business intelligence (BI) is when a company uses its own data from all its functions and analyzes it against different factors to determine how efficiently it is running. This analysis aims to find points where the company is lacking in performance and identify specific processes that need to be changed and optimized. However, it is not just small areas that you target by employing business intelligence. The biggest role of BI is to help the leaders of a company make strategic decisions that lead to an increase in revenue, productivity, and profitability.
The data collected for BI comes from within the organization only and is collected through several existing and specialized tools. These tools take the data related to the performance of the company’s products, assets, and employees and keep them all in one place and visualize those data into reports and charts that allow the senior management of the business to make decisions for bringing improvements where needed. Most tools also provide recommendations on their own.
Key Components of BI
Business Intelligence is a comprehensive data collecting – analyzing field, and it does its job through a whole range of components, each responsible for its own specialized tasks. Let’s take a look at what each of these components is and how we can utilize each of them to our benefit.
Whenever you want to execute a recipe, your first step is to gather all the required raw materials. In the case of BI, the raw materials are found in the form of data warehousing. Data warehousing basically entails a giant, all-encompassing database that takes data in a structured form from all the different channels of reporting and analytics present in the organization. Thus, if there is any type of data being produced related to our organization, we can pull it into the data warehouse for BI purposes.
This term is very much self-explanatory. If we were to continue the cooking example, it is basically the process of cooking the raw materials to create the final product. In this case, the final product refers to recommendations for the business. The business analytics component takes all the data gathered through data warehousing and analyzes it under different predefined perspectives (metrics), relevant to business performance.
The result of this analysis is the generation of a clear picture regarding the performance of the business from multiple perspectives. The performance levels are then weighed against the targets, and recommendations are provided on how they can be met efficiently.
Corporate Performance Management (CPM)
Also often referred to as Enterprise Performance Management (EPM) or Business Performance Management (BPM), and is the component of BI that utilizes multiple software tools to determine how the business is performing overall from multiple perspectives. The typical set of measurement bases includes the key performance indicators (KPIs) of the business, such as overhead costs, return on investment (ROI), margins, cost per acquisition (CPA), overall revenue generation, and other operational costs as a ratio to the earnings.
The biggest use of CPM is in finance, where decisions related to money have to be made as it allows for precise calculations that assist us in determining where the improvements need to be made. Six Sigma and Balanced Scorecard are a couple of examples of CPM.
Importance of BI
The main target for any business operating in a market is to make money, or more specifically, earn profits. We want to make sure that we are achieving the maximum possible profits while ensuring our sustainability. To help in this quest, BI plays a critical role nowadays. With sophisticated tools in play, we can use BI to tell us exactly what moves we need to grow our business further. The insights that BI creates about our own process can help us pinpoint the exact changes or decisions we need to make to ensure growth, productivity, and profitability.
BI holds importance concerning several other aspects of the business as well such as identification of new revenue streams, increasing the level of efficiency in every operational aspect of the organization, finding ways to gain an edge over competitors, accurate identification of the trends in the market, accurate extrapolation and prediction of market to help make strategic decisions and so much more. In other words, efficient cooperation and exploitation of marketing intelligence allow the decision-maker to extract the desired information, gain a better picture of the business environment, and finally make efficient, data-driven decisions.
The biggest reason for BI’s popularity is that it is continuously growing as a tool. With new techniques like artificial intelligence and machine learning being implemented into BI tools, the analysis and recommendations have become extremely well-informed and accurate.
Uses of BI Today
The uses of BI have not changed much since its introduction. And, while the preferences have shifted during the years, they are now actively aligning to a very logical perspective.
The most popular use for BI during 2019 has been to increase the revenue of the organization. It is no longer referred to as a tool for ensuring that the organization manages its risk properly and follows compliance laws. Many organizations are using smart applications and tools in their sales and operations departments to capture real-time data and actively form future strategies.
Strategic decision-making has shifted vastly to BI due to its ability to remove all ambiguities. With access to highly analytical data from every source within our organization, using a prediction-based decision-making process is no longer efficient. Instead, organizations should be making decisions based on accurate calculations derived from the detailed analysis provided by BI tools.
BI Techniques & Tools
Business Intelligence relies purely on the power of data, and there are several ways to utilize said data to improve our revenues and profitability. The most popular techniques used to leverage BI include the following.
AI & Machine Learning
it was not long ago when artificial intelligence was only thought of from the perspective of creating a real-world Sky Net that would ultimately grow sentient and take over the world. However, over time, the biggest use of AI has come to light as a technique for performing BI tasks. Furthermore, with software constantly being taught to learn from the data they receive and analyze, the level of accuracy we see in BI recommendations has improved massively.
Machine learning has also played an equal role in this development process. The accelerated data creation has allowed tremendous growth in prediction algorithms that analytics software used to provide recommendations.
A shift to the cloud
Global connectivity and access to data have become key factors in BI as businesses expand into new geographical locations. With data present on the cloud, BI software is preprogrammed to capture data from the cloud and provide analytics for every location in which the business has a presence. In addition to that, the accelerated growth of cloud-based BI tools and their popularity means that the companies no longer have to take IT-related risks and, at the same time, allow for collaboration between teams in multiple geographical locations seamlessly.
Data Visualization & Reporting
The oldest technique for performing BI has always been through the analysis of information and generating reports on preset parameters. No matter how complicated a tool may be, you can definitely see it use reporting tools and query addressing to provide useful information to users like us, who can then, make decisions accordingly.
Collecting BI through Digital Marketing
Business Intelligence plays a huge role in bringing accuracy to digital marketing strategies that we develop for our business. We can easily calculate the ROI and effectiveness level of any marketing campaign we launch by producing hard numbers with BI tools.
We can get information on a range of different consumer data such as the amount of time a customer views an advertisement, the level of interaction we get from a consumer visiting our website or social media page, the CTR or click-through rate for our advertisements on different platforms and even the level of awareness that people have regarding our brand. We can also determine the real CPC for different advertising campaigns and define digital marketing budgets accordingly.
With customer interactions constantly creating data within our organization, we can get key information delivered to ourselves, such as overly responsive customer communication channels, engagement with individual customers on social media platforms, etc. BI can use all the data captured through multiple marketing sources and provide actionable recommendations for digital marketing.
The importance of BI in digital marketing and the overall corporate world is too great. Ignoring it would only result in a loss of advantage, something that everyone wants to gain, given how competitive the business world has become!