Why Business Intelligence?

Why do we hear so much about Business Intelligence. What benefits does it offer. In what scenarios should we use Business Intelligence.Who should use Business Intelligence. These are some of the queries that I try to answer in this article.

As I have explained already in What is Business Intelligence?, Business Intelligence is the art/science of using all available information to assist Businesses to make decisions.

NOTE: While Business Intelligence is widely used as a term to encompass both internal and external analysis of data, some prefer to use the term competition intelligence for the process involving external data.

But, why go through the laborious process of gathering, storing and then analyzing the data in the first place. Well, gathering and storing of sales data can be explained as a means of keeping track of profits or losses, but why external data and why bother about analysis? Well, in today’s highly competitive world, information is what makes the difference between the successes and the failures. You need information to understand your weaknesses as an organization. You also need information to understand your strong points. Based on this you could take decisions on the future course of action for both sides. You also need such analysis for budgeting and making additional expenditure. An example of this could be as below: Let us say you sell a product and you have noticed that your sales increased tremendously after you started advertising on buses and hoardings than when you were advertising on television. This kind of analysis can help you cut down on your tele ads and concentrate more on the ads on buses and hoardings. Another example is tracking the effectiveness of online advertising by tracking the number of hits on a particular site for you advertisement. A bit further in detail analysis could help with the regions which access that site and if it has had any particular impact on your sales. In a nutshell, business intelligence can be used in an enterprise for the following purposes:

1. Measurement: It could be measuring your sales, performance of your employees or any kind of metrics that indicate your progress towards the goal.
2. Analytics: The process which enables the organization or the decision makers of the organization to arrive at the correct decision after having all necessary information and predictions. This would involve data mining, statistical and predictive analysis etc.
3. Reporting: A system to enable enterprise reporting on data. This includes both visualization and storage and OLAP etc.
4. Collaboration/collaboration platform – program that gets different areas (both inside and outside the business) to work together through data sharing and electronic data interchange.
5. Knowledge management – program to make the company data driven through strategies and practices to identify, create, represent, distribute, and enable adoption of insights and experiences that are true business knowledge. Knowledge management leads to learning management and regulatory compliance.

Some uses of Business Intelligence in an organization are:

1. Analyzing sales trends.
2. Tracking customer buying habits.
3. Managing finances.
4. Evaluating sales and marketing campaign effectiveness.
5. Predicting market demand.
6. Analyzing vendor relationships.
7. Assessing staffing needs and performance.