Business Intelligence is a broad field of study. The major thrust of business intelligence theory looks at certain factors to make high quality decisions. These factors include customers, competitors, business partners, economic environment and internal operations. Here is some more information on how these factors help businesses make quality decisions.
Customers: Without customers a business can’t survive. Businesses need to sell their products and services. Business intelligence helps businesses understand their customers better, looking at their preferences, helping businesses adapt to their customers demand. Business intelligence is used to collect data from customers usually within the marketplace. There are many ways to collect data from your customers; it can be as easy as a POS system (point of sale), collecting data on what customers are buying and which products they are not interested in, collecting data on customer habits and preferences by asking them in surveys or polls. There are even marketplace specialists that watch customers behavior in the marketplace and report back to the companies giving them insight into how their customer respond to stores, personnel and product and services that a business sells.
Once this data is collected, it is up to an organization to use this data appropriately. Business intelligence is a process in which vast amounts of data can be viewed and vetted giving managers and business owner’s important information that can be resourceful.
Competitors: Not only do businesses have to keep customers satisfied buying their products, they also have to compete with competitors that are constantly looking to poach a businesses customers and make them their own. Businesses today must constantly evaluate the effectiveness of their competitors and choose smart strategies that not only hold their competitors at bay, but also grow their own businesses market share. Business intelligence can help a business determine the strategies that your competitors are using to steal customers away, as well as help your own business to differentiate itself from others, effectively growing a larger and more profitable customer base.
Business Partners: Business partners are essential to any business, whether it is suppliers, payment processing companies, customer support companies or delivery companies that help your business throughout its cycle, it is important to make sure that all businesses partners associated with your business are in balance with you. Having a supplier that isn’t able to keep up with your demand or having a customer service contractor that is unable to help you with certain support problems can cause your business to fail. If you want your business to work smoothly and effectively, all business partners must be in line with each other. For instance, today many businesses share key data with their suppliers so that their suppliers can anticipate present and future inventory levels and make adjustments, which inevitably help your business. Sharing information is key and being able to gather information and sharing appropriate information is where business intelligence is important.
Economic Environment: Another way that business intelligence can help an organization is by taking into consideration key economic indicators such as consumer spending, inflation, unemployment, upturns and downturns in the economy, etc. Without business intelligence, your organization can’t process information effectively in order to modify strategies that fit the current economy.
Internal Operations: Internal operations are usually defined as the on going day to day activities of a business or organization. If your want your business to be successful, you need to be able to view your business’s strengths and weaknesses on a daily basis. You also need to see at any moment, just how much profit your business is making and your liabilities. Without decent foresight, you might make hasty decisions such ascommit to new spending or paying off debt when your business could allocate those funds some where else. Business intelligence is extremely important to gauge your current state of business, as well as all parts that constitute the whole of the business together to see where funds are needed, what part of a business is weak and what parts of your business is strong.
Once businesses know what to look at to give them information that they need to analyze, it is important to gather this data and then use business intelligence methodologies to sift through the data to provide solutions to common everyday business problems. One of the ways to accomplish these tasks is with Key Performance Indicators. KPI, are a way that business intelligence can analyze and evaluate the current state of a business and then use this information to choose a strategy and then execute this strategy.
Some businesses track Key Performance Indicators each year or quarter, some each month or week and if you have the means, many corporations try to track specific data daily in order to fine tune or tweak their strategies.
Computers, databases and a group of analysts usually work on business intelligence’s methodology. Usually each company has their own business intelligence methodology that fit their specific needs. Some of the more popular ways to create Key Performance Indicators are through Goal Alignment Queries, Baseline Queries and Metrics related Queries.
Goal Alignment Queries are a way to determine what your businesses goals are in using Business Intelligence. Is it your businesses goal to grow more market share, to make more profit per item, to start a new revenue stream, to find new manufacturer or suppliers, etc.
Baseline Queries help you understand your current approach to collecting data and whether or not this approach is satisfactory, where its weaknesses are and what its strengths are. For instance, if you would like to monitor your customers actions more closely, what are the current tools in place (POS systems, surveys, market research, etc), how do these current tools perform, which are weak, which ones need tweaking and what tools can be added.
Metrics Related Queries are extremely important in the Business Intelligence process, because data can only be beneficial to a company if you can come up with a way to measure it. Metrics related queries looks at data and comes up with solutions to accurately measure data to meet businesses needs. Once data is measurable, you can easily analyze it and determine what is working and what is not.
Business intelligence is a very broad topic of study, however If you would like your business to succeed, it is extremely important to understand the factors of business intelligence and learn how analyze and use the data created by this methodology.
The advantages gained by implementing business intelligence are:
- Enhanced reaction and sensitivity of the organization toward the customers
- Identification of customer demands
- Capability to respond to market transformations
- Improved optimality within operations
- Effective use and saving of wealth
- Intricate study assisting for future prospects
- Optimum utilization of organizational resources