The concept of business intelligence has been becoming more and more popular these days, but it’s important to understand the underlying principle in order to start making Business Intelligence (or BI) work for you.
According to Techopedia, Business Intelligence involves the use of computing technologies for the discovery, identification, and analysis of business data to generate historical, current and predictive views of internally structured data to establish more effective decision making, and strategic operational insight.
In other words, it allows you to find (and react to) important trends with a view to making better business decisions, informed by this data.
Why BI Is Important
As technology has advanced, we’ve become able to gather more and more data about ourselves, our products or services, and our clients. However, the ability to gather all this data has led to a condition generally known as “data paralysis.” There is so much data, that we don’t know what to do with it.
Thanks to the proliferation of social media and the internet of things, there is currently 80 times more data stored “in the internet” than there was 5 years ago.
This is where Business Intelligence comes in.
With the help of advanced software, and even AI algorithms, we can use BI to sift through this data, identify what’s important, and generate a list of actionable insights that will benefit our business. Today, BI can help you cut through the noise of vast quantities of data to unearth the relevant signals which are hidden within it.
The Components Of BI
Business Intelligence consists of 3 primary components:
First, there is the data itself. This can include anything from your sales records to your mailing list to the keywords you’re targeting in your ad campaigns. It often exists in many different and unconnected formats in separate and disparate databases.
Data Storage & Integration
As mentioned above, all this data is very often broken up and separated across different platforms in different formats, which can make it very difficult to analyse effectively. Data storage and integration, also sometimes referred to as data warehousing, provides a platform that connects multiple different databases together, and allows them to create relationships between them, and analyse them as a whole.
Currently, cloud-based tools have offered significant advances in this area, but however you do it, all databases need to be integrated and connected in order to derive meaningful insights from them.
Data Analysis & Presentation
Finally, once all your data is integrated, the next step is to make use of that data. Data needs to be accessed and analysed, and relevant trends need to be identified and presented in a way which is easily understandable.
Again, technology has come into its own here, with software based interactive dashboards, graphing, etc. that help you display data in a way that allows actions based on that data to be planned.
Using Your Data
Once you have integrated your data and dashboarded it for quick and easy visual understanding, it’s time to put that data to use. Here are a few examples of how BI can provide actionable insights:
BI For Sales Data
Sales data allows you to analyse your sales cycle, measure the performance of sales representatives, identify top performers and investigate why their performance is better in order to replicate their success across other team members.
BI For Acquisition
Discover which acquisition channel is driving the most revenue, which one is bringing the best customers, and understand your customer behaviour, profile and requirements.
BI For Marketing
Identify your most effective campaigns, and any characteristics they shared. Understand how your web presence is performing, and plan your next campaign to ensure high-performing factors are utilised in improving efficiency and increasing success.
The World Is Data Driven
As the 21st century begins to mature, it is more clear than ever before that the world today is driven by data. The more efficiently and accurately you can collate and integrate that data for analysis, and the better you can leverage that data to determine actionable insights, the more effective you are going to be.
If you understand your customers, your competitors, your market, and your own business, you’ll have the advantage in making effective and impactful decisions.