If you’re not collecting and using data for business intelligence (BI), not only are you missing out on opportunities to gain a competitive edge, you may even be falling behind the leaders in your industry.
With the help of tools and applications that are available today, the business data that used to require experienced data scientists are now easily accessible by regular business owners and managers who can then quickly evaluate and identify trends.
How can BI help your business? Let us have a look.
What is BI?
Business Intelligence (BI) comprises the strategies and technologies used by enterprises for the data analysis of business information. BI technologies provide historical, current and predictive views of business operations.
Previously businesses had little to go on, information gathering was relatively unsophisticated and warning signs were ignored, often to the detriment of a business. With today’s available technology, there is a rich crop of data to be harvested from the trail left by customers, whether it be customer profile (age, sex, social group), seasonal fluctuations, spending patterns and more.
The underlying principle is simple: it’s the art of making decisions based on available data. And in theory, the more accurate the data, the better the decisions.
In practice, what makes BI a slippery concept is that there is such a wide variety of different disciplines involved. There is the gathering of the data itself, its storage and availability, the manipulation and the interpretation. It sounds simple but it’s a process that involves different disciplines within the IT department, a range of skills and the participation of finance, sales, and marketing all coming together to produce an accurate picture.
In particular, the problem had been that much of the relevant data was trapped in complicated systems, accessible only to technical staff, while the business managers, the ones who needed the information, did not possess the knowledge to make sense of the data.
This gap is nothing new. In the 1980s, Executive Information Systems (EIS) were aimed at providing exactly this sort of information, with the thinking that executives finally had the magic formula that would allow them to gather all the relevant information. Unfortunately, the rigidity of the mainframe-based systems that were in use then greatly limited the use of EIS products.
The rise of cloud and visualisation tools
In recent years, BI and data analytics have once again become part of the business repertoire. Many modern executives are fully aware of the potential of accurate BI and companies are transforming themselves to take advantage of all the latest products.
There is a growing emphasis on accessibility of information, and a democratisation of information gathering. The availability of more powerful business software has driven a more tech-savvy generation of business executives. Most line-of-business managers are at home with Excel – while providing plenty of number-crunching in its own right, has been often used as a front-end for a number of BI products.
Businesses have also seen the rise of visualisation – the presentation of data in graphical format – illustrating complex points through the use of colour, brightness and shapes. In previous decades, the move to visualisation would have included concepts such bar charts and Venn diagrams, but there’s now a whole new lexicon of graphs available such as heat maps, tree maps and scatter plot diagrams, just to name a few.
Again, Microsoft has been highly influential here, with the release of Power BI a few years ago, which consists of a suite of software to offer more visualisation elements to users of Microsoft products.
This is an introduction to our Business Intelligence series. Please see below for links to all parts of the series.
Part 2: The latest BI trends