Why Business Intelligence(BI) is Important?
What do businesses want? They want to optimize their performance in regards to their competition so that they can obtain higher financial gains and dominate the market in their sector. In other words, they want to earn more money! And how to do this?
Well, in this data age, it’s best if businesses use their data to understand their market performance and then create further strategies for the future. This process is collectively known as Business Intelligence. These days, Business Intelligence is necessary for businesses if they want to retain their competitive edge and dominate their competitors using the power of data! But what exactly is it?
What is Business Intelligence?
Business Intelligence collectively refers to tools that are used to transfer the data that a business has acquired into actionable insights that they can use to further their profitability. These Business Intelligence tools are used to analyze different types of data that is generated by ta business and then represent the insights gained from this data in the form of reports, charts, dashboards, summaries, graphs, etc. Business Intelligence does not tell decision-makers in a company about what policies they should create or which avenues they should invest more in, but it gives them all the relevant data in a condensed form that they need to make their business decisions.
For example, Let’s assume a global business that wants to analyze the popularity of their various products in the market and understand where to invest more to gain maximum profits in the future. This business can use Business Intelligence to collect data about all the products such as their worldwide sales, popularity levels among customers, feedbacks for improvement, etc. By analyzing this data, the business can understand which products are more popular all over the world, which products are in demand in various countries and cities, and which products require improvements. Then they can create a manufacturing and marketing plan based on these data insights to obtain maximum profitability in the future,
What are the Activities in Business Intelligence?
Business Intelligence is a rather vague term that includes many different activities to gather the data, to obtain actionable insights from the data, and to report these insights to the decision-makers in a company. So let’s see some of these activities now:
1. Data preparation – The data needs to be collected, cleaned, and organized in a uniform manner before any data analysis can take place. Business Intelligence tools can collect data from various sources and then prepare this data with the same dimensions and measurements.
2. Data mining – Patterns are found in the data that were previously not visible using Data Mining. This involves using a combination of statistics and machine learning to extract information from the data sets.
3. Statistical analysis – Statistical components like mean, median, range, variance, etc. can be used to get a more detailed view of the data. These categories are a critical part of Statistical analysis and they allow businesses to understand their metrics in more detail so that they can chart a better Business Intelligence strategy.
4. Descriptive analysis – Researching historical data using descriptive analysis is also a part of Business Intelligence. This means that businesses can analyze their historical data to understand their past business practices and behaviors and whether they were leading to success and failure. Then they can build a strategy based on that for the future.
5. Data visualization – The data can be visualized using many different charts such as Area Charts, Bar Charts, Histograms, Heat Maps, Tree Maps, Scatter Plots, Gantt Charts, etc. All these charts allow decision-makers to understand the data in more depth by visualizing it and understanding the slowly changing trends or the places where critical changes suddenly occur.
6. Visual analysis – It is very important to visually analyze the data after the data visualizations have been created. This Visual analysis involves obtaining business insights from the data in a visual form that can be used to make changes to the company policy.
7. Data Reporting – A critical part of Business Intelligence is reporting the insights obtained from the data to the higher-ups in the business such as the stakeholders and board members so that they can make informed decisions. This involves using a layman language to explain technical concepts so that they are easily understandable and useful in decision making.
What are the Advantages of Business Intelligence?
Some of the advantages of Business Intelligence are given here:
1. Identify ways to increase profit
Companies can use Business Intelligence to increase the net profit they can earn. After all, the main aim is to make money! This is possible because Business Intelligence allows companies to obtain tangible insights from their data that they can use to optimize their plans. This naturally results in increased profit for a company.
2. Understand the market trends
Business Intelligence can be used to collect data from the market and understand the current market trends. In this way, companies can understand what their customers want and what is popular in the market so that they can work on it and provide products and services accordingly.
3. Optimize business operations
Companies can optimize their business operations using Business Intelligence. They can collect various types of data such as profits per quarter, sales and delivery reports, details of acquisitions and mergers, etc. and use this data to improve the problems in the overall business pipeline which will naturally optimize their business.
4. Analyze customer behaviour
Business Intelligence can be used to analyze customer behaviour. Companies can collect data about their customer demographics such as their age groups, education levels, geographical locations, etc. and brand their products to specifically target these customers. They can also understand what their customers want and work on providing products and services that satisfy them.
5. Compare performance with competitors
Companies can collect data from their competitors such as their sales, popular levels among similar customer demographics, profits, etc. and compare their own performance to understand where they stand in the highly competitive market. They can also analyze what their competitors are doing better than them in order to get a competitive edge.
What are the Different Business Intelligence Platforms?
There are many different Business Intelligence platforms but the most popular ones are given below:
Tableau is one of the most popular Business Intelligence platforms that is used by businesses to get an idea of their operations using data analysis. It has many different products including Desktop, Server, Online, Reader, and Public where the Public version is free for anyone to use. Teams and businesses can access Tableau creator for 70$ per month with a 14-day free trial followed by the paid version.
2. Qlik Sense
Qlik Sense is a Business Intelligence platform that allows decision-makers in businesses to use any BI use cases and find out unique insights into their data. All the data charts, tables, and other visualizations that can be created on Qlik Sense are totally interactive and they can automatically update themselves based on the changing data context. Teams and businesses can access Qlik Sense Business for 30$ per month and Qlik Sense Enterprise for 70$ per month.
Looker is a business intelligence, data visualization, and data analytics tool that can go in-depth in the data to provide real-time dashboards and in-depth data insights. Businesses can securely access their data analytics as Looker provides custom applications, data science workflows, embedded data visualizations, etc. to make this process easier. If businesses want to use Looker, they can obtain a price quote by submitting a form.
Microsoft Power BI is a Business Intelligence platform that can be used to create a data-driven culture in modern businesses. This BI tool has various self-service analytics that can be used to collect, manage, analyze, and share the data easily in business. Microsoft Power BI Pro is available for a $9.99 monthly price while Microsoft Power BI premium costs $4995.
IBM Cognos Analytics is an Artificial Intelligence-based business intelligence platform that is very supportive of all facets of data analytics like data discovery, cleaning, management, visualization, etc. It provides a free trial for 30 days followed by a basic plan starting at A$15 per month. Businesses can contact them for the Enterprise plan if they wish.