Most organizations, big or small, are faced with the challenge of accounting for and managing their data. The type of data includes financial data, personnel data, sales, business, accounting and endless data that is churned out on a daily basis. Organizations struggle with managing this data, understanding it and putting it to good use. Business Intelligence (BI) tools allow companies to deal with this enormous amount of information, and are widely being used to transform businesses and help companies gain the competitive advantage.
Having the right information, at the right time, and in the right format can be the difference between growing as a strategic and tactical company as opposed to a disconnected and stunted business. BI improves organizations by providing business insights to its employees, leading to better, faster, more relevant decisions. BI's popularity stems from the fact that CIOs and IT leaders are increasingly recognizing the value of insight when making important decisions.
What is BI?
BI involves the integration of information with relevant contextual information to detect significant events and identify trends. BI helps companies monitor business trends, and hence adapt quickly to changing scenarios. Transforming data into information enables companies to make intelligent business decisions, even when faced with uncertain judgments and contradictory information. The main advantage of BI is its ability to analyze seemingly unrelated information to provide relevant insights, identify trends and discover opportunities. Major players in BI include Oracle Enterprise Performance Management and Microsoft BI.
BI and its Applications
Lets consider an example to see how BI tools translate information. A hardware store may compare its customers' tool purchases with home ownership, type of automobile driven, age, occupation, income, and/or distance between residence and the store. This in turn could lead the store owner to rethink how the business operates and which products to carry.
Marketing. A marketing department needs to find ways to help the company grow the top line. It needs the ability to analyze campaign returns, promotional yields, and fine-tune spending to get the biggest ROI. BI can provide the marketing team with the insights it needs to determine where marketing money is best spent.
Sales. With sales, BI is all about process improvement, analyzing the steps, time length or duration inside a broad number of customer opportunities within the sales funnel, then finding the best path and best practices. Managers can use BI to gain specific insight into the sales pipeline.
Finance and Accounting. For finance and accounting departments, BI is all about process improvement. BI structures the company's internal data to improve the process.
Human Resources. While most organizations don't tend to think of BI in terms of HR, it can help the HR department track and manage things like employee turnover (voluntary versus involuntary) and which candidate pools tend to yield the best candidates. They can also analyze compensation.
Inventory and Fulfillment. Many businesses already use some form of BI to monitor and automatically adjust inventory levels. BI can help figure out how fast is that inventory turning.
Companywide. BI brings people together collaboratively. Companies that are not driven by metrics or analytics often argue about where problems lie and how to resolve them. With BI, everyone can look at the data and work together to resolve issues and improve business processes.
How much does BI cost?
It is difficult to identify exactly how much it costs to implement a BI program. The cost will depend on how much is expected from the BI tool and how deep it has to dive into corporate data. Ultimately, BI will make business operations more efficient and save money for the company in the long run.
Until recently, few applications could analyze large amounts of information in a timely manner and provide insights. BI gives companies a more structured way to look at data while providing deep interpretations. It aids decision making via real-time, interactive access to and analysis of important corporate information. BI tools bridge the gaps between information silos in an organization. Their analytical capabilities and access to corporate information resources, transaction processing applications, and enterprise applications such as ERP enable users to access and leverage vast amounts of data to analyze business relationships and trends, gaining insight into potential sales opportunities and areas for business process refinement.