What is business intelligence?
Business intelligence (BI) is an all-encompassing expression of an organization's various software applications that use it to analyze its raw data. Data mining is a discipline that consists of a variety of interrelated activities, including online analytical processing, querying, and reporting. However, it is necessary to know more than that for success.
Firms use BI to improve decision making, cost reduction, and identify new business opportunities. CIOs use BI to identify inefficient processes that need to be reworked. With today's BI tools, business people can start analyzing the data themselves, without waiting for IT professionals to generate complex reports.
Although BI has great promises, some technical and cultural difficulties may arise during implementation. Administrators must ensure that the data that feeds BI applications is clean and continuous so users can trust it.
What types of companies use BI (Business Intelligence) systems?
Especially restaurant chains and retail stores are the biggest users of BI software. It uses BI to make strategic decisions such as identifying new products to add to restaurants menus.
In addition, they benefit from the data provided by Business Intelligence tools when making decisions such as which services to remove or close stores that do not perform as expected.
BI is also used in tactical situations such as re-signing with food suppliers, identifying options for developing inefficient processes. Because restaurant chains are heavily dependent on operations and BI is very helpful in running their business. Restaurant chains are among the elite companies that benefit from the true value of BI systems among all other industries.
Who should lead BI (Business Intelligence) projects?
Sharing is vital to the success of BI projects because everyone involved must have full access to information in order to change the way they work. BI projects can start with top level managers. however, the next group of users must be their marketers. Because their job is to increase sales and employ talent to make it happen. So they're much more likely to embrace any tool that can help them do this job; Of course, it is important that the vehicle is easy to use and that they rely on information.
How do I implement a BI (Business Intelligence) system?
When creating a plan for BI, companies should first analyze their decision-making way. It should consider information that will enable managers to make more confident and quicker decisions. It should also be taken into account how this information will be presented as they wish. (such as report, table, online, printed)
Discussions on decision making will reveal what kind of information companies need to collect, analyze and publish within their BI systems. Good BI systems need to go into detail. Reports stating that yesterday's sales were realized as X and Y on the same day of last year are not enough. In the business area in question, he needs to explain the factors that caused sales to be X for one day and Y on the same day of the previous year.
As with so many technology projects, BI will not produce any results if users are skeptical of the technology and consequently refuse to use it. However, when it comes to a strategically applied practice like BI that fundamentally changes the way firms function and changes the way people make decisions, CIOs need to take much more into their feelings.
Seven steps to delivering BI systems:
Make sure your data is clean.
Educate users effectively.
Deploy quickly and adjust as you go.
Don't spend too much time in the beginning to get "perfect" reports because as your business evolves so will the needs.
Quickly present the reports that offer the most value and then fine-tune them.
Use an integrated approach when building your data warehouse from the ground up.
Make sure you don't lock yourself in a useless data strategy later in your journey.
Clearly define the ROI before you start just yet. Highlight the specific benefits you hope to achieve and then check every three months or six months for validation.
Focus on business goals
Don't buy Business Intelligence software because you think you need it. Deploy BI if you need to find some numbers and know roughly where they are.
What are the potential problems?
One of the biggest obstacles to BI's success is user resistance; Other challenges include the collation of vast volumes of irrelevant data and poor data quality.
The key to a healthy understanding of BI systems is standard data. The most fundamental component for all BI studies is data. In order to obtain the reports that companies expect, they need to run the data sources and data well. Otherwise, they will be operating based on flawed data.
Another potential danger is the BI tools themselves. Although the tools are more scalable and user-friendly than before, the core of BI is still reporting rather than process management; however, this also started to change slowly. Be careful not to confuse business intelligence with business analytics.
A third obstacle to using BI to transform business processes is that most companies do not understand their business processes well enough to determine how to improve them. Companies need to understand all the activities that make up a particular business process, how information and data flows between various processes, how data travels between users, and how people will use it to run a certain part of the process. Also, if they are hoping to improve the way people do business, they need to understand all of this before starting a BI project.
What does business intelligence do?
The main function of business intelligence is to make predictions about the future through analysis of companies' past and current organization. Thanks to the detailed reports prepared with business intelligence applications, important information about company performance is not only obtained; at the same time, decision-making mechanisms work more effectively. This facilitates management and provides a meaningful vision of the company's development strategy. Business intelligence is a technology that will make the company more profitable in the long run.
What are the benefits of Business Intelligence efforts?
Numerous applications for BI have helped companies achieve impressive return on investment. Business Intelligence was also used to identify cost reduction methods, reveal business opportunities, transform ERP data into accessible reports, react quickly to retail demands, and optimize prices.
In addition to making data accessible, BI software can give firms more power during deals by enabling them to more easily measure the value of their relationship with suppliers and customers.
What exists within the walls of the organization: optimizing business processes. Making money by focusing on decisions. When business significance emerges, BI provides a significant return on investment. For example, Toyota discovered in 2000 that they paid twice as much for their shippers with the help of BI tools. There are a large number of companies that use BI to reveal problematic business processes. They are much better at competition than companies that only use BI to view what is happening.
Key points for a successful Business Intelligence strategy
With all the mergers and acquisitions in the Business Intelligence space, it's easy to forget that there is much more to BI than the technology behind it. Before you get the technology to work, you need to create a vision for your own BI strategy, says Boris Evelson, an analyst at Forrester Research. He is the author of the upcoming work "Time to Rediscover Your BI Strategy".
- Choose a C-level patron (non-CIO). Business Intelligence applications should definitely be patronized by anyone not involved in IT, says Evelson. Instead, BI should be overseen by a manager with ultimate responsibility. This person must have a broad perspective on the organization's tasks, strategy and goals, and must be someone who knows how to transform the company's mission into key performance indicators that will also support that mission. This manager is usually the CFO. This patron should check the practice with a written business case and be responsible for changes in the field.
- Create joint definitions. Without common definitions, a BI application cannot be successful. And lack of agreement is a common problem in today's companies. For example, finance and sales may define “gross margin” differently, meaning that these numbers will not match. Hence the value of automation falls. To combat this problem, bring in experts in the situation in question from employees in various areas of the firm. At this stage, IT's involvement should be limited to the ownership of the project management office, compliance, business standards and policies. Second, start small and choose 10 to 20 key performance indicators. Set standards and keep them in mind.
- Form worthy of the present situation. You should analyze the existing Business Intelligence stack, business processes, and organizational structures surrounding existing BI applications. Both the IT and business side should be involved. Evelson warns that this phase should not be taken lightly, and points out that Accenture's complete "BI diagnosis" includes 1,500 questions in 75 subject areas and 325 applications.
- Create a plan for data storage. Many organizations start with isolated data because this method is fast and inexpensive. Note, however, that this tactic means that new warehouses have to be created as the extra data storage needs increase .; this can become uncontrollable within a few years. Another thing to consider is deciding whether to proceed with a physical data store or virtual, "semantic" layers to connect operational systems. Traditional data storage means duplicating data. This means that their operational systems are almost impossible to bring in in real time. You can save space with the abstract description layer, but as with all metadata warehouses, it is difficult to design. You must resolve this issue before deciding which company to choose.
- Understand users' needs. Three common classes of Business Intelligence users are strategic, tactical, and operational. Strategic users make few decisions, but each can have a profound impact; For example, should we close operations in Europe and open them in China? Tactical users make lots of decisions each week and use both aggregated and detailed information. They also need daily updated information. Operational users are frontline employees such as the call center. They need the data in their application suite to perform a huge number of operations. Understanding who will use BI and for what purposes can show the type and frequency of information needed. It can also assist BI with its guidance in decision making.
- Decide whether to install or purchase the analytical data model. One size fits all. In general, if you have a more homogeneous IT environment such as a single ERP, single CRM system, the ready-made industry-specific data model can be useful. Look at extensibility and hierarchical flexibility. More complex organizations can benefit from customization. You may still want to consider an industry standard as template or guideline sets (typical facts, dimensions, etc.).
- Consider all the Business Intelligence components. Components that will affect the success of Business Intelligence applications include: Metadata, data integration, data quality, data modeling, analytics, central measurement management, presentations (reports and controls), portals, collaboration, information management and master data management. Make sure you define the architecture for all layers of the Business Intelligence stack; While they are not part of the BI strategy itself, they will have an impact on the success of the implementation.
- Choose a system integrator. Business Intelligence applications require the guidance of a partner with deep experience. Evelson, be prepared to spend $ 5 to $ 7 on services for every $ 1 of the software. Don't outsource the tweaks of Business Intelligence. The process requires a high degree of collaboration between end users, analysts, and developers.
- Start with baby steps. Pick an end user, business analyst, and developer for the first running concept in a few days. Identify a few performance indicators and prepare a few reports, then add new ones each week.
- Choose easy goals to get started. Evelson recommends the selection of high-value, simple ingredients to start. For example, a sales analytics data warehouse can also represent high-value goals that have enough off-the-shelf models and best practices.
What areas does business intelligence benefit your company?
It is suitable and even necessary for almost any type of company, regardless of its size and activities. In addition, analysis of every data handled within the scope of business intelligence should be done meticulously, as it will affect the output. Let's examine together:
1. Converts data into information.
In the last few years, we have obtained most of the data we have about the business world today. The increasing popularity of social media channels has a big share in this. Data doesn't make much sense, unless it turns into meaningful knowledge with natural insight. It is in this transformation phase (also called data mining) that business intelligence comes into play. Thanks to the methods offered by business intelligence, it becomes easier for you to transform data into information that will help you better understand market dynamics and customer needs.
2. Allows you to make the right decisions.
Thanks to business intelligence, you can make decisions about your business based on research and real figures, not assumptions. Business intelligence facilitates management by positively affecting all of your company's decision-making processes.
3. Optimizes business processes.
As decision-making processes get faster and more efficient, business processes also improve. Business intelligence provides your company with operational efficiency.
4. It helps you determine the return on your investment.
You are in a multi-competitor race with a thousand kinds of mobile applications, hundreds of analysis tools and dozens of social media platforms. In such an environment, business intelligence applications increase your chances of seeing whether your company's marketing strategy is correct and the amount of return it provides to you.
5. New projects make your development process easier.
Thanks to business intelligence, it is easier to see in which areas and how your company progresses, bringing more returns. In this way, you can identify ways to increase your income more easily and develop your new projects more effectively.
6. It brings competitive advantage.
With business intelligence, you will learn more about the situation of your competitors in the market, which gives you a competitive advantage in the market.
7. It helps you understand the consumption behavior of your customers.
By investing in business intelligence, you will gain insight into the purchasing habits and consumption behavior of your current and potential customers. If you understand what your customers need and what they buy, you can use this information to offer them products and services that match their buying trends.