This article has been updated in March 2023 to reflect new information, statistics, and current trends.
In the current environment of big data, many business owners are finding themselves overwhelmed by large volumes of information. They are constantly seeking ways to gain a better understanding and control of this information to derive the best value for their organisation.
In this article, we break down the value of business intelligence tools: What they are, the benefits, and why your business needs BI.
What is business intelligence?
Business Intelligence (BI) brings together a variety of tools, technologies, applications, and practices to analyse your business data. The end result will be decipherable data that can clearly guide future actions for the business. Decision-makers of the business, including executives, managers and owners can use BI to their advantage.
The value of BI tools to product businesses extends beyond basic reporting: reduced costs and happy customers are just two of the beneficial outcomes.BI can help your company amalgamate and analyse data to produce insightful and important metrics that can be understood by all. With BI, you’ll have a powerful asset to work with you. It is capable of running queries against your current data, developing reports, and producing visual explanations of your data.
3 major benefits of business intelligence
When you align data from all of these areas, you’ll be able to piece together the whole picture of your customer: what channels are the most valuable customers shopping on, how do they pay for the products, what shipping method, what are they buying and in what frequency.
1. Cater results for each audience
BI can sculpt the results for the right audience.
If you’re a decision-maker and want to plan future inventory stock purchases based on market demand, BI can create a report to support your parameters. If you’re an inventory manager and you need to see how much inventory stock was left on the shelves in previous years, then BI can cater the results to an operational level.
BI can be applied to look at specific inventory stock levels and when you had stock-outs and how often there is deadstock.
2. Identify trends
BI can analyse historic data and look for patterns and trends.
When BI identifies this, it can help you address the market.
It’s not just patterns for seasonal inventory stock. Rather, it can analyse economic trends like interest rates and human resourcing demands to help you determine whether it’s the right time to invest in hiring new employees.
3. More knowledge of your customer
BI can help you get to know your customer better. BI can assist you with understanding how your customer interacts with your business and can do it in real-time. Bringing together data from sales, marketing, customer services, finance, research and development and operations can all be done through BI.
What is the value of business intelligence?
With the ongoing growth of eCommerce that has saturated every market, BI is more important now than ever.
Anything a consumer wants is merely a click away and for business owners, this means making smart decisions and knowing where to put their marketing spend. Business intelligence helps to guide those decisions.
Some of the benefits of business intelligence are that it improves performance, sales, marketing and long-term customer relationships which are built through better customer experiences. In practical terms, BI delivers value for your organisation in the following ways:
Decision-making
The key purpose of any BI implementation is to convert company data into well-structured, analysable insights or real business intelligence that informs strategic decision-making.
At the heart of intelligent decision-making is having a single, centralised depository that pulls together data from all your business activities and customer interactions.
Great BI is having access to all your business data in a single unified place with a dashboard that includes data from different areas such as sales, finance and inventory control to provide a holistic view of the business, its customers and their interactions with the business.
This means that business decisions are based on facts rather than assumptions or conjecture.
Sales and marketing
BI technology delivers in-depth data to boost sales and support the performance of marketing activities. It provides sales staff with tools to measure sales activity and identify consumer trends and behaviour through improved visibility of sales information.
Specialised features also track, and measure marketing campaigns and promotions and this information can then be used to ensure future marketing initiatives are effective and profitable.
Business intelligence holds great value for business owners, especially those in the retail, wholesale, and manufacturing sectors.Customer experience
Another key benefit of BI tools is that they deliver important information to help companies understand how customers are interacting with their business.
Having access to all customer information in a single location, from anywhere, at any time, helps to improve data accuracy and customer relationship management. Enabling the business to substantially improve customer engagement, support and experience.
Customer insights improve segmentation and targeting of your various customer groups, helping to identify where resources should be appropriately applied and if the business is attracting the right customers to meet and sustain business growth targets.
Productivity
BI tools have the potential to improve inventory control, reduce inefficient bottlenecks and refine operational processes through the automation of routine tasks. Centralised data that is accessible from anywhere, on any device cuts down on administration time and significantly boosts productivity and data integrity.
Considerable gains can be made in productivity through more efficient use of sales staff’s time, more responsive customer service and faster measurement of product development cycles and marketing campaigns.
Data accuracy and compliance
Keeping data in siloes makes it nearly impossible to achieve a holistic 360-degree view of your business, your customers, your processes and operations. The centralised nature of BI data helps to improve transparency and to expose errors that lead to downtime and wasted resources.
With global data protection regulations governing the way businesses capture, store and use personal data, it is critical that your data is up to date and accurate. By implementing BI tools businesses can address data integrity and improve data governance.
Inventory control
BI is crucial to retail and eCommerce enterprises because of the speed in which customers demand order fulfilment. Retailers need to have optimal inventory control to know where inventory stock is located and how quickly it is moving.
BI tools include forecasting functionality to improve inventory control to avoid bottlenecks, stockouts and over-stocking. Easy to read dashboards can be reviewed daily or weekly to keep managers informed in real-time of what is happening in the organisation.
Valuing BI
Good business intelligence should be a critical strategic goal of any organisation. The valuable information that BI tools provide, enables managers and business owners to optimise planning and to react quickly and efficiently across all decision-making processes.
Reveal opportunities, track performance and more with a BI tool.
Why does every business need BI?
We’re living in a data-driven world where companies are overloaded with information — we produced more data in 2017 than the previous 5,000 years of human history. Any company interested in working more efficiently is investing in ways to control and understand their data.
But firstly, what is Business intelligence? Essentially Business intelligence (BI) is any software or service that transforms data into actionable insights to inform a business’ strategic decisions. BI tools access and analyse data sets and present analytical findings in easy-to-understand reports and charts, dashboards, graphs and maps. Ultimately, BI helps business users determine the state of their business.
How a company uses a BI tool depends on what they are trying to achieve: some want to gain insight into customer behaviour, others want to optimise their inventory management. However you want to use it, access to good business intelligence is critical. In practical terms, BI delivers value by helping you:
- Make fact-based decisions
- Identify and eliminate waste
- Increase operational efficiency
- Identify market trends and opportunities
- Analyse customer behaviour
- Measure yourself against competitors
- Track performance
- Predict success
SMEs and big data
Many growing businesses wrongly believe they are too small for big data. Fortunately, data is now easy to collect and cheap to host, making big data tools and technology more accessible to growing businesses in terms of cost and ease-of-use.
The importance and value of big data should not be overlooked by smaller businesses. Here’s more on why and how SMEs should collect data.
BI can be transformative for your business
3 ways to get more from your BI tool
Why limit BI data to one department? Implement business intelligence throughout the business so that everyone can benefit. For businesses looking to implement a new BI tool or get more out of their existing one, here are three ways a BI tool will help.
Improve employee performance
Imagine you manage a team of people in a warehouse. At a glance, you want to know who your top performers are so you can reward them – which is exactly what Lipari Foods did. Their BI tool pulled data from the warehouse management system and time clock, and ranked their team of order fulfillers based on performance. This allowed the management team to reward top performers without the hassle of pulling reports together from different sources.
Cut time wasted on data gruntwork
When it comes to the end of the quarter or the end of a financial year, you might find yourself up all hours of the night collating spreadsheets and writing reports.
Audio equipment maker Skullcandy did just that – spending hours assembling data and validating it, which meant they were only able to track customer and product profitability once a month. Realising that working with stale data can jeopardise decision-making they started using an analytics tool, and now their data prep time has been eliminated. They can quickly track profitability and identify positive or negative trends in real-time.
A tip here: your BI tool is only as good as the data it’s working with, so take time to ensure you’ve got good quality data — take a look at seven ways you can improve data quality.
Improve customer service
A good BI tool lets you access all your customer information in one location. This means you can improve segmentation and customer targeting to better serve your best customers - and that’s crucial in the current Covid crisis: whether B2C or B2B, the brands that survive will be those that show exceptional customer service, generating rave reviews and customer loyalty.
For further tips, check out CIO’s article on more ways to get more value from business intelligence.
Business Intelligence in a nutshell
Right now, business success depends on making informed decisions while staying nimble. Businesses that prioritise BI tools in a crisis are well-positioned to reap benefits across employee performance, customer satisfaction and business efficiency.
