Have you ever wondered why some businesses are so astute at managing to keep abreast of changing customer behavior and other market trends? Have you ever wondered why some businesses are always quick to provide solutions to the demands of emerging markets? There are undoubtedly many reasons, but central to the answer is that such businesses have an effective business intelligence system in place that helps them make timely alterations to their strategic visions.
A business intelligence system is the totality of computer software packages and other tools that a business uses to collect and process all sorts of complex business data and condense it into reports. It serves as a road map that enables a business to measure its general performance and look out for competitive advantages that they can capitalize on to forge ahead of its rivals. It also provides a business with valuable data and statistics about customer preferences and behavior, so the business can truly listen to its customers and create a satisfactory experience for them at all times.
No doubt, there are occasions when businesses will still perform well without a business intelligence system in place or without acting by one. But this is just an exception to the rule. It is generally accepted that analyzing your data gives your company the ability to measure success and take advantage of competitive opportunities.
And with time, fewer companies will achieve success by basing their decisions on mere guesswork, because virtually all business decisions now need to base on facts and objective analysis that only an effective business intelligence system can provide.
Now, what are the problems your business will likely run into if you don’t have or use a business intelligence system? Here are some of them:
- You will face the “multiple versions of the truth” challenge, because there is no one agreed-upon system for collecting data, feedback, and analytics. And you will waste a lot of time before making decisions because you will get stuck as to which information to act by.
- Certain aspects of business logic (such as calculations that have different definitions and names for the same measure) will become unclear. A classical example of this is the definition of a claim in the insurance industry—to some, it’s related to the incident that occurred, and to others, it’s related to the treatments incurred. A whiplash claim may need 5 surgeries to put right—so, is that to be counted as one claim or five claims?
- There will be incoherence among the departments that make up a company and inconsistency in their operations.
- There will be data quality issues. Data quality will become an afterthought because everyone will be focusing on generating just any figures—regardless of whether those figures are helpful or relevant or not. (But a business intelligence system places data quality up-front).
Enough said about the importance of a business intelligence system and the dangers on not having one. I am sure you now understand why you need to have one set up for your business. And I can guess what question you’re having on your mind right now…
How can you build a business intelligence system?
Your first step towards building a business intelligence system is to figure out what goals you want to achieve with it. This will help you define the appropriate architecture and direction of data flow.
Once you are able to figure the architecture of your business intelligence system, you will know the components that will go into it. While the fine details and specific equipment and components of a business intelligence system vary from business to business, the goals to be achieved by the components are the same. Here are those goals:
- Identification of source data
- Development of scripts to extract the data
- Data repository design (the data repository can be a data mart or a data warehouse)
- Development of scripts to transform the data and load it into the repository
- Setup of the business intelligence presentation tool
- Development of queries, analysis, cubes, dashboards, and scorecards with the presentation tool
With all the necessary components put together, the business intelligence system is then tested before being put to full-blown use.
Bottom line-: A business intelligence system is a must-have for every business because it helps the company identify its most profitable customers, its return on investment for certain products or advertising campaigns, or trouble spots within its organization. Although setting up and implementing a business intelligence system for your business can be costly and time-consuming, it usually brings huge benefits in the short and long term.