Business Intelligence: What You Need to Know
Can a Business be Intelligent?
The term Business Intelligence (BI) doesn't actually refer to a business itself. It's a term used to define a certain kind of software, designed for gathering, storing and analyzing information ways that will let a company make better business decisions. Business Intelligence is supported by the same concepts that used to be called "Data Warehousing," which sought to bring together lots of different data points and databases to improve the efficiency of the process and the value of the information. Business Intelligence systems can scan huge amounts of information and recognize patterns that wouldn't be obvious to human readers. For example, they can look at telephone calling records and identify patterns that might indicate criminal activity. They can also let sales reps access an individual customer's sales history and product preferences, which makes them powerful tools for customer service centers. This sort of personalized understanding of each individual customer is a key driver of customer loyalty.
The term BI was used as early as September 1996, and Business Intelligence information and applications are now broadly available to employees, consultants, customers, suppliers and the public. For large companies, BI is a mission-critical technology. It brings a competitive advantage, by giving them the ability to quickly make sense of lots of data; time is money. Business Intelligence might be made an integral part of enterprise operations, or called on only occasionally to meet a special requirement. That means BI systems could be enterprise-wide, or confined to a single division, department, or project; they might be centrally initiated or driven locally by user demand.
BI for Small Businesses
Business Intelligence is no longer a technology that can only be deployed by very large corporations. There are BI applications designed to fit all needs, large and small. Small to medium firms are starting to spend more on BI and apply it to more things, such as complying with regulatory reporting requirements, measuring performance and identifying opportunities for cost reductions.
Time is money regardless of company size. BI also supports real time "dashboards" that can represent an entire business at a glance. With today's BI tools anyone can slice and dice data, without waiting for technical people to design and run reports. The power of Business Intelligence delivers the same kind of value for small companies that it does for big companies. It helps them answer key business questions, showing which customers are the most profitable, and which customers only seem profitable. BI can also help make timing decisions, picking the best time to launch a marketing campaign or deliver a particular service. It can provide insight into a portfolio of products and services, showing which offerings are the top performers in a particular market or in a given time period.
BI is still increasing in popularity, and some observers expect the growth of the Business Intelligence market to continue for several years. As BI has evolved, it's also spread into more areas of the companies that use it, moving outward and downward from top management and into operations. In the process, it brings a democratization of information access; it gives all users access to real data so they can make better decisions.
A relatively low investment in BI delivers a rapid payback. Besides making data accessible, BI gives companies more leverage during negotiations by making it easier to quantify the value of the relationships with their individual suppliers and customers. Business Intelligence gives all users access to real data so they can make better decisions. A relatively low investment in BI delivers a rapid payback.
Before getting too involved with BI, it's important to understand your business objectives. Make sure your BI dashboard is telling you things that are useful and interesting: things that are critical to the effective and efficient operation of your business. Get people involved from across your organization, and find out how BI data might help operations, sales and delivery. Start with a simple project that can be easily understood, but look for a tool that will be able to grow as your company gathers more experience; start small, but think big.
The success of any BI implementation depends on having clean, accurate data. When you're considering your options, first determine what information, data and insights are required to make sound decisions. By starting with a broad-based BI assessment, you'll be able to focus on the information that you really need. Then be sure you know where your data is coming from.
There are many vendors in the BI business; the established players are software giants who are just starting to respond to the needs of smaller companies. Some vendors take their enterprise version and customize it for small businesses, selling it at a discount. Others have designed new tools specifically for the small business market. Whatever offering seems right to you, it's better to start by building something simple. Get the tools into people's hands, and let them tell you what more they need. Work your way up from a simple starting point, with an iterative approach: build, trial and improve.
BI tools can deliver real business advantages. They can help your company identify opportunities to reduce operating expenses, or prevent duplicate payments. They can identify sales trends, so you can see what's selling and what's sitting on the shelves. BI analysis can also inspire companies to launch new business ventures, by providing good data that supports a decision to expand. The bottom line is that BI can help your company make better decisions by giving every employee access to accurate, real-time information. BI can be applied across all areas of your company, from accounting to sales, and from fulfillment to support. It offers a way to break down information silos, so that everyone can have a clear view of the big picture.
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