What is business intelligence? What are its benefits and how does business intelligence help in decision making? Well, this article will answer your questions in detail.
Wikipedia defines business intelligence (BI) as “a set of theories, methodologies, architectures, and technologies that transform raw data into meaningful and useful information for business purposes.”
The main purpose of business intelligence is to support better decision-making in business. With a proper BI system in place, business owners and managers will get access to the right information at the right time and in the right format. Business intelligence can provide a company with rich data resources that can help it achieve its business goals and targets by guiding timely strategic decisions.
Interactions with customers through phone calls, email, online chat, etc; can be thoroughly analyzed by business intelligence gathering teams with the aim of getting vital insights that can be efficiently leveraged to provide immense value of the business in the long term.
These teams try to find out customer preferences, likes and dislikes of customers, customers’ reactions to promotions and new offers, online shopping customer experience on the company website, technical difficulties faces by customers and so on. And the information they get from this analysis can be used to increase customer satisfaction. Business intelligence can help all the departments within a company.
How Business Intelligence Helps in Decision Making
a. As for the marketing department, it helps them grow the top line. It helps them analyze the results of their campaign and promotional yields. And it helps them fine-tune their spending to get better ROI.
b. In the sales department, business intelligence helps them find the best path and best practices, the cost and length of customer acquisition, process improvement, and year-by-year analysis of turnover and sales.
c. Business intelligence helps the human resource department track and manage things like employee turnover, attrition rate, recruitment process, and so on.
Aside these, every other department within a company will benefit directly or indirectly from business intelligence. Correct usage of this strategy has shown excellent results across all sectors; be it e-commerce, media, non-profit organizations, healthcare, telecommunication, financial services, energy, and so on.
Business intelligence helps in decision making due to the multiple powerful elements it entails. These include interactivity, data visualization, database connection, mobile business intelligence, predictive analytics, application integration, and ad hoc reporting. Now, let’s take a closer look at each of these elements.
6+ Ways Business Intelligence Help in Decision Making
There should be a high level of interactivity between the dashboard and the difference report. For example, if a person is seeing and analyzing the total sales report, some interaction should be involved. This will help the person dig further into the report to figure out region wise sales, product wise sales, time period wise sales, and so on.
The more the level of interaction, the more the volume of vital information that will be retrieved; and the better the decisions that will be made.
2. Data visualization
Having data visualized in a correct format is very important, as this facilitates better understanding of the data. For example, month-on-month sales could be represented in the form of a line graph rather than just words or verbal communication. Similarly, a component wise contribution could be best represented with a pie chart. Only when data is represented in the correct format can any useful insight be extracted from it.
3. Connection to databases
During a business intelligence procedure, the analysts in charge should be able to fetch information by connecting to different databases and web services, so that they will get access to the right information irrespective of its source. With the right information, helpful recommendations can be made that will help a company grow.
4. Predictive analytics
With the aid of historical data and high-end algorithms, certain predictions can be made, such as the likelihood of customers coming back for repeat business, expected revenue, expected region wise sales, machine failure, and so on. This can help a company to be proactive.
5. Application integration
A business intelligence tool should be easily integrated with your existing application or software regardless of whether it is developed in Java, C, Ruby, PHP, or any other platform.
6. Mobile business intelligence
With more and more workforce going mobile and handling tasks on the move, they need to have the right information on their mobile devices, such as smartphones and tablets. So, all reports dashboards and graphs should be compatible with mobile devices.
According to a survey, a decision made based on data analysis has 79% chances of success more than one made based on pure intuition. Business intelligence helps businesses take a more structured look at data while providing deep interpretations. It aids decision making via real-time, interactive access to and analysis of important corporate information. And it bridges the gaps between information silos in an organization.