Business intelligence (BI) is a broader term used for the technology that facilitates data preparation, mining, managing, and transforming into charts, graphs, and other visual media. Business intelligence instruments and procedures enable end-users to recognize actionable details out of raw data, allowing decision-making, which is data-driven within organizations throughout many industries. There are multiple benefits of business intelligence today.
Nowadays, several BI tools in the marketplace help business users examine performance metrics and extract information in real-time. These tools focus on fostering self-service abilities, reducing IT dependability, and allowing decision-makers to identify execution gaps fast, market trends, or unique revenue prospects. As a result, BI applications are typically used to make knowledgeable business decisions, growing a company’s place in the market.
The usage of BI software is growing exponentially, especially as customers are migrating workloads to the cloud. As a result, vendors are becoming increasingly supportive of various cloud platform providers, directing the market towards more SaaS-oriented BI solutions.
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Business Intelligence Lifecycle
- The first and foremost step is to study business requirements, which fundamentally refer to the problem we wish to solve or the question we want an answer to. Then, to do the same, collect the business essentials and convert them into operational and non-operational specifications, make a template for reports, etc.
- The second step is to design the logical data model. Here you will build an analytical data model that shows business entities and their relationships based on business requirements.
- The third step is designing the physical data model, where we transform the logical data model into a physical one, which describes the data warehouse structure.
- The fourth step is building the data warehouse. In this step, you create the data warehouse, build data marts, and load data.
- The fifth step is to create the Project. Here you start working directly in MicroStrategy, where you specify the schema, traits, facts, rankings, etc. All this data is kept safe in metadata, the core of MicroStrategy, in a relational database.
- Finally, the sixth step is to develop reports/ documents and, of course, dashboards. In addition, you share your understanding throughout the organization using different channels such as email, FTP, etc.
Benefit of Business Intelligence
There are many benefits of business intelligence systems for your organization. Here are some of them:
- Valuable Insights
Business intelligence software continuously gathers and scrutinizes data to deliver actionable insights for your business. Experts can develop reports on different data sets like expenditures, operations processes, human resources, and customer assistance. Almost all BI platforms provide pre-formatted reporting abilities to accumulate common KPIs data. Businesses can also create bespoke or self-service BI reports, using BI’s amazing visuals to distinctive, organization-specific information sets. Suppose neither of these options gives you what you need; in that case, users can execute a personalized report, which is put together entirely by users. It usually focuses on a particular KPI that other types of information can’t target.
- Visualize Important Information
Operational reports can be challenging to decipher, lowering an organization’s capacity to identify and work on critical metrics. One of the essential benefits of a business intelligence system is that it delivers exceptional data visualization powers, permitting users to construct instinctive data visuals that are straightforward to comprehend and uncomplicated to crack.
Image Ref: https://www.kdatascience.com/importance-of-business-intelligence/
- Data Mining
BI analytics tools are incredibly fitting for practical data mining. It is the procedure of seeking data patterns to determine trends and pull insights. You can break it into five steps: collection, warehousing and storage, organization, analysis, and presentation. Some BI platforms can accomplish all of these steps for an institution, while others need analytics tools, Big Data systems, or data warehousing outlets.
- Performance Management
Another benefit of business intelligence is it helps track, handle, and enforce performance goals. For instance, businesses can feed data-based goals like sales objectives or target delivery time with BI tools, enabling them to monitor daily progress. This tracking mechanism is called performance management. It offers practical and easily enforced objective management.
- Sales Intelligence
One of the essential BI advantages is that it improves understanding. Experts who develop BI software programs know that businesses cannot benefit from opportunities they are unaware of. They, therefore, build software to make those transient possibilities evident and supply the details that permit firms to capitalize on them.
- Competitive Analysis
An essential benefit of using BI is tracking your competitors’ sales and marketing performance. It will give you a greater insight into how they differ from your business. Similarly, leveraging BI tools for budgeting, forecasting and planning will deliver a competitive advantage.
- Access to Critical Information
With the vast amount of data yielded every second, accessing the correct information at a specific time can be challenging for businesses. BI systems offer visualization abilities to comprehend more useful recorded and present data, real-time updates, forecasts, and trends. It lets you access necessary business data via dashboards and reports on mobile devices and tablets. You can rapidly take out vital marketing and sales information, decipher trends and patterns, and choose suitable actions.
- Make Data-Driven Decisions
To get actionable insights, study the data derived from different business departments, including sales, marketing, operations, human resources, and more. Then, you can create reports and dashboards and spend more time scrutinizing to move effective business decisions in less time.
- Streamline and Trim Operations
BI can cut waste. Anything or everything that brings no value to your business can be considered waste: it includes the functional and administrative work that a BI system can automate. BI does the job that data entry employees or analysts would generally get burdened with, like data organization, deduplication, and other redundant duties. It aids business intelligence: first, employees can dedicate their time to more time-consuming tasks, boosting productivity. It can also help conserve time, money and decrease human error. It also permits users to recognize how well the organization is performing with the current staff to expand or downsize consequently.
- Boost Customer Satisfaction
BI tools enable you to calculate customer behaviors, buying picks, and the latest trends directly impacting customer experiences and happiness. As a result, most organizations gather customer feedback in real-time that aids in retaining existing customers and reaching out to prospective ones. In addition, it helps recognize customer requirements and offers better assistance.
Business Intelligence Examples
To understand the concept of BI better, let’s talk about a real-world example of its use. Lotte.com used BI to amplify the company’s revenue. With 13 million consumers, Lotte.com is a top-ranking internet shopping mall in Korea.
- Problem: The website had more than 1 million visitors daily. However, the executives couldn’t understand why customers abandoned shopping carts.
- Resolution: A professional from the marketing planning team employed customer experience analytics. It was the first online behavioral study technique used in Korea. He utilized the information to comprehend customer behavior, enforce targeted marketing, and alter the website accordingly.
- Results: With the new revelations, thanks to the new BI analytics program, there was an upsurge in customer loyalty in a year and an addition of $10 million in sales. The differences came from determining the reasons for shopping cart abandonment, including a lengthy checkout method and random delivery times, and fixing the problems.
Companies from across domains use business intelligence to fuel their growth and prosperity. Here are a few real-world examples:
- American Express:
Business intelligence is a driving force in the finance industry. For instance, American Express has been using BI tools and software to create new revenue service products and customer market offers. The organization’s investigations in the Australian market revealed that out of all Australian users, at least 24% would be closing their accounts in the next four months. With the help of this information, the company takes measures to retain its customers. This technology also enables the company to catch fraud and defend customers whose card information may have been leaked.
- Chipotle Mexican Grill:
This popular restaurant chain has more than 2,400 outlets across the globe. Therefore it employed BI to monitor functional efficacy. As a result, it can now watch every outlet’s operational effectiveness and exhibit comprehensive information on the dashboards. In addition, Chipotle made standardized KPIs for benchmarking and communicating progress and success stories. It did this by regularizing the reporting and working from the same data setup. It also offers excellent time-saving measures for the company.
- Coca-Cola:
Coca-Cola dramatically benefits from its social media data, with more than 35 million followers on Twitter and 105 million on Facebook. Implementing AI-fuelled image-recognition technology helps the company identify when pictures of its drinks are posted online. This info, coupled with the abilities of BI, offers the organization an essential understanding of people drinking its beverages. For example, it can determine their demographics and why they mention the brand online.
Conclusion
BI tools and software help you better understand your business’s strengths and weaknesses while providing actionable insights into KPIs and other vital metrics by presenting your data in an easy-to-understand format. Therefore, along with several benefits of business intelligence, it is a critical mechanism to assure competitiveness and profitability.