As business leaders, we are constantly faced with making decisions based on incomplete information. We decide who to hire, what to sell, what to buy, how to advertise, and countless other actions without knowing if we’re doing the right thing or not. This is why “Business Intelligence” came into being.
Business Intelligence (BI) is a mix of data mining, data tools, data infrastructure, and data visualization that provides business leaders with the information that they need in order to make good decisions. It has become quite sophisticated in the 21st century, and if you’re not taking advantage of it, you’re at a competitive disadvantage to those who do.
What are the benefits of Business Intelligence? Business Intelligence is designed to help you and your business…
1. Make better business decisions
Even in today’s high-information environment, a surprising number of executives are still “winging it” when making decisions. They rely on anecdotal information and the opinions of department heads. For example, when deciding how much to allocate to each marketing channel, a CEO might call a meeting with the marketing team who may say something like, “Our online advertising is really working! My mom even saw the ad on Facebook.”
BI helps businesses by providing executives with the hard evidence they need to make such decisions. If you use Zoho Analytics, for example, it could tell you how much traffic came from each channel, what the sales conversion rate was for each channel, and the per-sale marketing cost for each channel. Much better right?
You’d think that all businesses would take advantage of such tools, but unfortunately, they often do not.
2. Create a competitive advantage
If you have more information, better information, and faster information than your competitors, then you have an enormous advantage over them, provided that you use the information to your advantage.
A good example of this is in the area of operations management. If you’re in a line of business in which the most efficient, lowest-cost producer wins, then you need to make damn sure that you have the most accurate tools for tracking your productivity.
Cases like this often require larger investments in systems like Oracle or Tableau. But they can be worth it if you’re in a highly competitive line of business in which accurate data can make-or-break your business.
3. Help your business survive, and thrive
If your company provides different types of products and/or services, it’s likely that some of those products will be more profitable than others. It’s possible, or even likely, that there may be one product that is keeping your business afloat while the others are losing money. This may be okay in certain situations, but wouldn’t you like to know exactly how much each product line is earning and/or losing?
BI tools can help you with that. For example, Microsoft Power BI can make real-time “dashboards” that provide very easy-to-understand charts that allow you to not only learn which product lines are most profitable, but also helps you communicate it to your team. Sometimes the communication piece is the most important ingredient. As Mandy Patinkin eloquently put it in the final season of Homeland, “The truth isn’t much good if no one will listen.”
You may want to read: 6 common reasons for miscommunication at work (and how to avoid them)
4. Understand the customer and the market
There are many statistics on customer behavior that show that customer behavior has been constantly changing in recent years, especially since the pandemic. Understanding customer behavior and how it changes over time can help you make better decisions. Do you know how consumer sentiment has changed since the pandemic? If not, there are some services out there that can help.
Tools like Google Trends can help you track Google search trends, and tools like Hootsuite can help you with “social listening” that keeps track of social network conversations.
Proper use of these tools can help you stay ahead of the competition. It can help you spot opportunities that the competition might not know about. This is particularly true in today’s fast-changing post-pandemic world.
Internal data can also help with this. You should be tracking the changes in your own customer’s behavior. Netflix, for example, does a great job of this. Their recommendation engine takes into account all your search and media consumption behavior, however, it prioritizes recent trends – both in your own personal account, as well as in the market as a whole.
Conclusion
Business Intelligence provides an array of powerful systems that provide businesses with the tools they need to make decisions and create competitive advantages in the marketplace. If you’re not using them to your advantage, you run the risk of losing out to those who do.