One of the biggest problems organisations have nowadays is the fact they are rich in data but poor in insights. They may be collecting data from different sources – channels, processes, customers etc. – but they don’t really know how to transform that into valuable information and then strategies. To increase their ability to analyse data and get insights companies should apply Business Intelligence.
Business Intelligence is set of applications and technologies to help users make better business decisions. It provides reporting functionality, tools for identifying data clusters, support for data mining techniques, business performance management and predictive analysis. Business Intelligence tools are supporting the transformation of raw data into useful information.
Business Intelligence offers possibilities for revenue increase – it helps maximise loyalty by analysing customers behaviour and using insights to extend the right offer to the right customers. It also can help reduce sales loss by using data to understand why customers choose competition.
BI techniques include:
- Data Visualisation – convenient way to immediately understand how to interpret the data. It helps identify what areas of business need attention
- Data Mining – analysis of large pools of data to find patterns and rules that can be used to guide decision making and predict future behaviour. It is a method to reveal previously unknown or unnoticed relations among data entities
- Reporting – design, schedule and generation of reports to gather and present information to support planning and decision making process
- Time-series Analysis, Predictive Techniques – refers to time dimension of data and reveals meaningful statistics and characteristics of data; predicts future trends or outcomes based on previously observed values
- On-line Analytical Processing (OLAP) – visualization of multidimensional data in real-time, manipulating and analysing large volumes of data from multiple perspectives
- Statistical Analysis – uses the mathematic foundations to qualify the significance and reliability of the observed relations.
Benefits of Business Intelligence
Benefits of Business Intelligence include:
- Reduce information bottlenecks
BI systems provide individualised, role-based dashboards that collect the most important data for daily operations and they let users open and run reports autonomously. End-users are able to extract reports when they need them rather than wait for others to prepare them.
- Make data actionable
It only shows data relevant to the specific user, to help avoid information overload. Information is shown on a high, aggregated level where overall trends can be easily spotted and then let the user drill-down to detail data in a top-down manner. Users can search and design reports themselves, can forward and share selected data with others and assign targets and responsible persons to KPIs.
- Better and faster decisions
BI provides decision makers with rich, relevant and up-to date information giving them the opportunity to be more responsive to threats and opportunities. It lets users dive into data for further investigation and combines multiple data sources in common reports. It provides analytical and ad-hoc reporting capabilities that allow users to quickly retrieve new or different combinations of data as needed.
- Align the organization towards its business objectives
BI centralises KPI definitions and provides single source of information. It ensures common interpretation of KPI’s and helps focus employees’ attention on the most critical success factors.
- New insights
BI systems provide capabilities that allow users to get answers to any question that comes to their mind. This helps users gain new insights by strengthening their understanding of the underlying patterns of the business. With data mining algorithms patterns can be uncovered automatically in large amounts of data.
Source: Laudon and Laudon, chapter 12
BI case study – Countax Limited
British manufacturer of garden tractors and ride on mowers, Countax Limited has been in the UK market for nearly 30 years. Before they turned to BI, data in their systems was hard to access by users to gain business insight in a valuable way. Only individuals with the necessary technical skills had the ability to query information which was causing bottlenecks.
Reports were manually compiled, which was time-consuming and costly. Different people were asking different people for same information which was causing discrepancies, inconsistencies and effort duplication.
“We had the information, or rather the data. The challenge was accessing and using it. In some areas, we just weren’t asking for the information we needed, as we knew it was going to be painful to get” – David Sturges, Managing Director at Countax
Countax needed to improve their ability to make use of business data in decision making.
They implemented BI solution integrated with their existing systems.
They selected modules providing sales, inventory, supply chain and finance analysis in order to have comprehensive coverage across their business operations within one BI platform.
Implemented solutions gave Countax users ability to access powerful, easy-to-use reporting allowing them to self-serve. Bottlenecks, duplication and discrepancies have been removed.
“The reporting ability that comes from this business intelligence system has greatly aided the business. Our departments are using this analysis and reporting capability to guide strategic direction and decide where to target energy. We didn’t have this level of visibility before.” – Lisa Vedder, Management Accountant in the Finance team at Countax.