Intelligence isn’t just for three-letter organizations trying to uncover the next plot in the United States. It’s also for businesses hoping to gain an edge in their industry.
And if you aren’t using it, you’re going to be left behind very quickly. By the end of 2019, 90% of large global organizations will have a chief data officer (CDO), according to Raconteur. That shows how importantly companies are taking their stockpiles of data.
Companies who don’t conduct good business intelligence (BI) will always be at the mercy of competitors who do, because the latter will understand where to put their resources and how they can get an edge when the market shifts — and it always does.
Overview: What is business intelligence?
Business intelligence is a key part of business development that refers to any sort of data retrieval and analysis that can help a business better understand their industry, competition, or customers.
Companies that are diligent in conducting good business intelligence can take the reams of data they collect and turn it into clean, actionable information that can be used to alter their business strategy.
When collecting business intelligence, companies may examine things like how their B2B marketing strategies are put together, what their customers are asking for, and what activities their competitors are engaged in. They may use data mining, sales analytics, benchmarking, reporting, and other tactics to gather this intelligence, or they may outsource it to an outside firm.
What is business intelligence responsible for?
People who are engaged in business intelligence help set the direction and strategy of a company, identifying opportunities for a company to make strategic changes that will improve its competitive advantage in the industry.
Those recommendations could include cost-cutting, hiring, investment in new technology, focusing resources on new areas or niches, and other efforts.
Collecting and organizing data
Data must be collected before it can be analyzed, although this may not be as straightforward as it sounds.
A BI analyst must identify key business intelligence technologies that can help organize data, as well as know where to store it so it can be easily accessed later. The analyst must become familiar with these business intelligence solutions in order to take advantage of their full capabilities.
Evaluating and analyzing data
The BI analyst must then take the data they have collected and perform the analysis.
The analyst should have a background in data and statistics so they can spot trends and identify outliers. These assessments could help a business confidently say, “we should change our business operations to run that way because it is more efficient.”
Basically, the analyst should be taking lots of disorganized data and creating a clean, focused narrative that is easy for everyone else to follow.
Identifying new ways to use data
There is a practically unlimited volume of data available to BI analysts. Their job is to figure out how best to use it and identify new ways to uncover new realities about an industry or better identify how the business is performing.
For example, now that your business has optimized its IT department, perhaps it’s time to take a closer look at sales, asking questions such as how many calls the average salesperson makes and what the conversion rate is compared to the industry average.
Overseeing the storage and use of data
That data will be useful even after the initial analysis, so a BI analyst should have processes in place to organize and store that data so it can be easily accessed later. They must identify business intelligence systems that can help them do this.
Many data firms will host and organize your data for you, although that may end up being more expensive than doing it in-house.
Briefing other departments on conclusions
All that analysis is worthless if you keep it to yourself. It is key for the BI analyst to be able to brief other departments or even the chief executive officer (CEO) on their conclusions, and how this new info can help the company better position itself.
Again, the job of a BI analyst is to take all of this complex data and create a clear snapshot of the subject that everyone can understand and use to make sound business decisions.
Business intelligence vs. business analytics: What’s the difference?
Business intelligence and business analysis are two similar and overlapping business terms, but they differ in that BI is focused on the present realities of the market while analytics deals with predicting the future.
Another way to look at it is that BI looks back at how things have been run and uses that information to tweak the company for the better, while analytics is forward-looking — for example, sales forecasting — and attempts to predict what is going to happen down the road.
Why business intelligence is important
Without BI, a company is essentially blind. They could be doing things the right way, but they have no idea because they haven’t taken a look at the numbers.
The data holds a lot of key statistics that could help give a company some “aha!” moments, like a realization that the business should be hiring a lot more in one department or that they should totally revamp their B2B sales strategy.
If you aren’t conducting business intelligence analysis, start immediately
By now, you understand the importance of business intelligence, but you might feel a little lost on next steps to take. That’s totally understandable. Here are a few simple steps you can take to start the important work of BI and improve your company in the process:
- Determine your objectives. What do you hope to accomplish — improving revenues, boosting efficiency, find data for a business proposal, or is there some other metric that is important?
- Identify KPIs. Key performance indicators (KPI) are the specific figures you should be tracking, such as revenue, employee retention rates, or how often you close a sale.
- Choose someone who will be responsible for implementing it. You need to tap someone to be responsible for business intelligence research, such as your chief financial officer (CFO), or even yourself. Or, hire a chief data officer, as many companies are doing, to be solely responsible for this type of work.
- Start gathering the data and storing it. Create a process and identify how you will categorize the data for later retrieval.
- Set aside a time to conduct an in-depth review of the data. A quarterly report might make the most sense, but choose a frequency that works for you.
- Use a tool. A BI or CRM software can help you. These CRM examples will help you know which to choose. This is very labor intensive work if you don’t have the right tools, so use BI software to help you do the heavy lifting.
View more information: https://www.fool.com/the-blueprint/bi/