Business Intelligence (BI) and Dashboard Applications help increase the competitive advantage of an organization by enabling it to make better decisions based on multi-dimensional analysis of information within and outside its four walls. Business Intelligence helps companies with detailed and timely information about the competitive environment and internal operations. Every employee in today’s organization should have a dashboard view into the key metrics impacting their work to enable them to make better decisions backed by data instead of being based on gut feeling.
Benefits of BI
A well thought-out and executed BI strategy provides a 360-degree view of data and metrics from different divisions and functional areas so teams are not looking at information silos.
- Helps generate ideas for new business initiatives
- Results in more targeted marketing campaigns
- Provides a better sense of customer needs and desires
- Creates a strong understanding of competition
- Positions an organization to deal with evolving market conditions in a proactive manner
- Highlights business areas that require improvement
Key Components of the BI Strategy
- WHO: Identify the people that will lead the BI initiative from IT and different business teams.
- WHAT: Clearly outline the role of BI in the organization. What are you trying to achieve with the BI program? Do you want to build company-wide metrics or Key Performance Indicators (KPIs) that can be used to measure and drive company-wide strategy? Do you want to build decision-making engines to help identify patterns and trends?
- HOW: Identify the tools and processes that will need to be in place to implement the BI strategy to help achieve the objectives.
The BI process starts with the extraction and storage of data from multiple internal and external data sources and storing it in a data warehouse. This involves extracting, transforming and loading data into the repository and then using tools to manage the retrieve metadata. The BI tools then enable the generation of ad-hoc custom reports that help with historical analysis and forecasting of business trends. There are several advanced BI tools in the market today that can crunch through large volumes of data and help you make sense of it. The ability to extract, integrate, analyze and interpret business information in a timely manner makes BI a vital capability for any organization.
- Data Sourcing: In any organization, source data typically resides in spreadsheets, multiple homegrown databases, and third party systems. The first step in the BI process is to identify all relevant data sources and then aggregate it in a standard template.
- Data Analysis: Business Intelligence is about synthesizing useful knowledge from collections of data. It is about understanding current trends, integrating and summarizing disparate information, validating models of understanding, and predicting future trends. This process of data analysis is also called data mining or knowledge discovery. Typical analysis tools use probability theory, statistical methods, operations research and artificial intelligence techniques.
- Decision Support: BI helps you uncover important data, such as products that are not performing well, market demand for different services, and poor staff performance, so that you can take preventative steps. It helps you analyze and make better business decisions.
Business Intelligence Trends
- Information Overload: More data translates to a greater need to manage it and make it actionable. Organizations are recognizing they don't have the information they need to manage the business. The data is there, but it's trapped in different silos and its accuracy can't be trusted. How information is entered can vary widely from how it needs to be used to make organizational decisions and, all too often, definitions vary from silo to silo. For example, finance and marketing could define gross margin differently, which influences how and what numbers are reported.
- Fewer BI Vendor Choices: Large ERP/CRM vendors are integrating business intelligence capabilities into their products by acquiring independent BI vendors. This will result in fewer choices new dependencies.
- Operational Business Intelligence: Traditionally, BI is not a top-of-mind investment for companies, but rather an afterthought once the major application decisions were made. However, companies now are making BI tools and dashboards available at all levels of the corporation to enable employees to make smarter decisions.
- Unstructured Data: E-mail, memos, voicemail messages and other sources of unstructured data are rich sources of information, and companies are responding by looking for ways to blend structured and unstructured data for better decision-making. For example, retailers could add comments and complaints from e-mail and call centers into a BI application to enhance their market segmentation analysis.
- Data Visualization: The next generation of business intelligence applications like JMP (SAS), Spotfire (Tibco), Tableau, Thinkmap and others provide visualization for complex data.
- BI moves to the cloud: The increasing scalability, performance, flexibility, and availability demands on the enterprise BI infrastructure will increase the adoption of the cloud to host and deliver these services.
- Most companies will fail at BI initiatives: Most organizations will not have the information, processes and tools their managers need in order to make informed, responsive decisions. This is due to lack of proper investment information infrastructure and dashboard tools.
Business Intelligence helps predict and anticipate market changes, minimize exposure to risk, reduce operational cost and boost productivity. The continuous monitoring of the key performance indicators in a Business Dashboard allows organizations to change direction in a timely manner.