The term “business intelligence” came into use in the 1960s to describe a system for sharing information among departments. Today, business intelligence (BI) tools enable self-service data management and digital data analysis. BI software solutions efficiently collect data to help owners and managers make informed business decisions. These critical insights can help your company adapt to industry and market fluctuations.
By 2025, the business intelligence market is expected to grow to $40.5 billion. So whether you have a small business or an enterprise, your company can benefit from BI solutions to stay ahead of the curve, decrease operating costs, and sustain and grow customer relationships.
We’ll explore business intelligence, why a business owner needs it, and how BI relates to competitive intelligence and artificial intelligence.
Business Intelligence is not a single piece of software or even a software suite for crunching big data. Instead, it is an umbrella term that includes best business practices, software, infrastructure and other tools to optimize decision-making and enhance performance.
In essence, BI is about information analysis. A database pulls together information from the different parts of your business, and then applications convert that raw data into reports, charts and other analytical tools to provide insights.
Business owners can use BI in many ways:
When tracking industry trends via social media, identify and track trending topics on sites like Facebook, Instagram, TikTok, Reddit and Twitter.
These are some of BI’s analytical applications:
Technology is not just about gathering intelligence but about making immediate sense of data through visualization applications.
BI also offers dashboards and performance scorecards. Key performance indicators and business metrics are much easier to understand when displayed as visualized data.
Attempts to analyze data without BI are clumsy. For instance, teams often tabulate information on Microsoft Excel spreadsheets. However, collecting the data is time-consuming, and it’s tedious to put it together in an easy-to-grasp way.
Even worse, the results are not always accurate or insightful. While Microsoft Excel has many excellent uses, it’s like using a hammer when you need a jackhammer. BI tools are bigger, better, faster and more efficient for significant tasks, like taking a company to the next level.
Properly analyzing data can mean the difference between a modest profit and outrageous success. Proper analytics give you some important abilities:
BI tools can help take your business to the next level. By increasing productivity in your workforce and improving the customer experience, BI tools provide the data you need to make proactive business decisions.
BI tools can assign tasks and reporting to teams and individuals to create a traced accountability system within the business. Holding your team accountable can increase loyalty by providing each person with a clear understanding of their role and reducing confusion among departments.
BI tools boost productivity in several ways:
BI gives companies access to a wide variety of data that can help streamline business processes, reduce pinch points and set measurable standards. You can use data reporting in real time, leading to better, faster business decisions. For example, team members can analyze detailed client information and forecasting before a sales meeting. As a result, it’s easier to connect with the client and conduct business more professionally.
Using BI tools to analyze customer data can determine how to engage customers, anticipate buying hot spots and downturns, and monitor industry and market changes. Anticipating your customers’ needs is a substantial competitive advantage and can keep you one step ahead for maximum profit potential.
BI tools also help your customers. By connecting phone records, text data from live chats and prior purchases, you can offer excellent customer service using data history to solve problems.
Verizon invested in more than 1,500 employee dashboards across multiple departments. The dashboards housed data from customer support live chat sessions. By collectively analyzing the data, Verizon eliminated 43% of its support calls.
Although there are many benefits to BI tools, implementing them isn’t always easy, especially for small businesses. There are a few things to consider before diving in.
Conflict between sales and marketing teams isn’t uncommon, due to clashing strategies and role confusion. You can alleviate this stress by outlining a cohesive strategy that lets each team play a crucial role in the company’s success.
BI is often considered synonymous with competitive intelligence, and it’s also confused with business analytics. However, there are some important distinctions.
BI and artificial intelligence (AI) overlap in their technological applications. BI and AI tools create valuable data from their analytics, allowing businesses to translate that data into informed business decisions.
However, their goals are significantly different. BI tools streamline data collection while automating the frequency and improving how a business utilizes the data. By using BI tools in various departments, your team can collect and aggregate that data to make informed business decisions.
On the other hand, AI tools are built to model human intelligence in the form of rational decision-making. For example, in certain instances, an AI chatbot can take the place of customer service reps. While it doesn’t necessarily improve the B2C relationship, it can fill the gap in real time for simple questions or concerns.
Tom Drake contributed to the writing and research in this article.