Today’s businesses have access to more data than ever before. Companies produce, collect and store vast amounts of data, from customer feedback surveys to manufacturing and delivery statistics. Business intelligence is a series of methodologies that puts this data to work, helping businesses become more effective and increase profits. By using these methodologies and specific software analytics, savvy business executives can harness the power of raw data and leverage it to support strategic planning that can help an organization move ahead of the competition. Here’s how it works:
The five primary components of BI include:
OLAP (Online Analytical Processing)
This component of BI allows executives to sort and select aggregates of data for strategic monitoring. With the help of specific software products, a certification in business intelligence helps business owners can use data to make adjustments to overall business processes.
Advanced Analytics or Corporate Performance Management (CPM)
This set of tools allows business leaders to look at the statistics of certain products or services. For instance, a fast food chain may analyze the sale of certain items and make local, regional and national modifications on menu board offerings as a result. The data could also be used to predict in which markets a new product may have the best success.
In a mobile society, this particular component of BI is becoming increasingly popular. Using software applications, a business can respond to real-time trends in email, messaging systems or even digital displays. Because it's all in real-time, an entrepreneur can announce special offers that take advantage of what’s going on in the immediate. Marketing professionals can use data to craft creative limited-time specials such as a coupon for hot soup on a cold day. CEO’s may be interested in tracking the time of day and location of customers as they interact with a website so marketing can offer special promotions in real-time while the client is engaged on the website.
Data warehousing lets business leaders sift through subsets of data and examine interrelated components that can help drive business. Looking at sales data over several years can help improve product development or tailor seasonal offerings. Data warehousing can also be used to look at the statistics of business processes including how they relate to one another. For instance, business owners can compare shipping times in different facilities to look at which processes and teams work most efficiently. Data warehousing also involves storing huge amounts of data in ways that are beneficial to different divisions within the company.
This component of BI involves various forms of stored data. It's about taking the raw data and using software applications to create meaningful data sources that each division can use to positively impact business. BI analysts using this strategy may create data tools that allow data to be put into a large cache of spreadsheets, pie charts, tables or graphs that can be used for a variety of business purposes. For example, data can be used to create presentations that help to structure attainable team goals. Looking at the strategic aspect of data sources can also help organizations make fact-driven decisions that take into account a more holistic view of the needs of the company.
Under the umbrella term of Business Intelligence, there are many tools that are used to analyze the various components of BI and construct them into actual problem-solving actions. Today’s ubiquitous use of the Internet and the great entrepreneurial spirit of our free-market economy have fostered niche markets and start-ups, as well as, consulting firms and other business ventures that have helped build many BI tools. These specific business tools can help leaders look at components of their business in more depth and detail. The most common tools in use today include business and data analytics, predictive analytics, cloud technology, mobile BI, Big Data consultation and visual analytics.
Business Intelligence helps business leaders use data in ways that are meaningful and powerful. Utilizing the tools derived from BI components, organizations can better leverage data for competitive advantages. Used properly, the data can drive business decisions that can proactively respond to market trends and other external factors. While businesses today collect and store copious amounts of raw data, few are actually harnessing the power of that data to drive business insights and transformations. The only true constant in business is that it's always changing. Business Intelligence provides methodologies and tools for today’s business leaders to change effectively and lead their organizations with fact-based decisions and a more holistic view of growth potential.