Business intelligence refers to technologies and applications used in an organization to obtain, integrate, analyze, preserve and present its data. This helps create insightful information based on the raw data collected by the company or any of its function. This analysis is conducted by Business Intelligence tools, which then present the information in the form of reports, summaries, graphs, charts, and dashboards, etc.
Why We Need Business Intelligence
The primary goal of business intelligence is to enable managers and corporate executives to make better, more informed and efficient decisions that are vital for the growth of the business. Business intelligence helps companies save money by cutting costs. It also helps them to indentify new business opportunities and re-engineer business processes that become inefficient over time.
Business intelligence provides a way for managers or workers in an organization to examine data and makes it easier for them to interpret trends and derive insights accordingly.
Business intelligence provides decision makers with the strength of knowledge and can provide:
Efficient Decision making
Business intelligence provides insights enabling efficient and timely decisions, minimizing discrepancies possible during trial and error. If a manager makes decisions based on his or her instincts and there is no solid reasoning behind it, it’s possible that the decisions may be inaccurate. On the other hand, if there were reasonable analysis to back it up, the decision would prove effective.
New Business Opportunities
By continuously analyzing the data, you will find out potential business opportunities that you might have not considered in the past. It will also enable you to iterate the business practices e.g. to launch new offers based on the market situations of customer preferences.
Business Intelligence will help set KPIs – you will get alerts whenever there are significant changes in the data. You can then figure out the reasons for why the data changes and what can you do to normalize it again.
Understand the Customer Better
Business intelligence tools help us understand the customer behaviour in a more sophisticated way. It’s possible to obtain more detailed Information to do targeted marketing or to create customized offers for enhanced effectiveness. You will know which customer buys what, and what are their other buying/spending habits are to make informed assumptions about their future behaviour and buying patterns.
With the help of business intelligence tools, you can keep a track of the amount of inventory you have ordered, how much has been utilized and how much is remaining. If there are perishable items in the inventory, you will know what their shelf life is and how long they can be kept be offer they have to be disposed of. More efficient inventory management can ensure the right product is stocked to keep up with current and future buying trends.
Better Resource Allocation
You will be able to take better advantage of your teams’ potential, collaborating to find solutions to problems, and figuring out the relevant people for a particular task in order to perform it swiftly.
This does not just hold true for the human resource, it will also help you identify which areas of the business require more resources in order for you to improve them.