What is Business Intelligence?
Simply put, Business Intelligence (BI) provides present and historical data so decision makers can make better business decisions. The technical definition of the term however is that BI comprises the strategies and technologies used by enterprises for the data analysis of business information. BI is much more than a specific “thing”, instead it is better viewed as an umbrella term that covers all the processes and methodologies of collecting, storing and analysing data from business operations to optimise performance.
Why does it Matter?
The modern analytics workflow provides performance benchmarks so businesses can run smoother and more efficiently. It helps identify market trends that can increase sales or reduce costs. It can help you analyze customer behavior so you can adjust your offering. The bottom line is that data allows you to make informed decisions quicker, and if you are not fast your competitors will be.
Each business will have their unique set of goals and to track their progress, they will need to monitor their performance by gathering the necessary data, analyze it, and determine the actions needed to take the business forward.
Take for example McDonald’s in 2002, who turned to BI when the company’s stock price began to fall dramatically. Previously McDonalds growth strategy was simple – open more locations and sales increase. They soon realized that the “build it and they will come” philosophy was no longer working and needed to reform their approach. Julio Ortiz, senior director of IT BI at McDonalds, say they adopted a BI strategy termed “Plan to Win” and its key metrics included place, people, products, and promotions. From there, McDonalds built standard questions and scorecards for mystery shoppers so they could review everything from top to bottom from an internal perspective and use the BI gathered to direct their decision making. Since 2002, the share price of McDonald’s has increased by 562.7% and they serve nearly 70 million people in 118 different countries across its 38,695 stores– every single day.
How does it work?
Numerous self-administration business insight tools streamline the analysis procedure, making it simpler for individuals to comprehend their information without any specialist technical know-how.
One of the more typical approaches to introduce business insight is through information perception. Humans are very visual and can easily identify patterns or differences in colours. Presenting data visually makes it more accessible and understandable, allowing decision makers to digest and act on fast.
Accumulating this data into a visual dashboard can easily paint a picture and highlight trends or patterns that may not otherwise be found as easily when having to dissect vast amounts of data. This visibility opens more discussions around the information, prompting a broader business impact.