Smart businesses understand that goal setting is a critical element to business success and growth. As management thought leader Peter Drucker has said: “You can’t manage what you don’t measure.”
Analytics, therefore, is another important piece of business success. Reviewing an organization's progress against a plan, and making the right adjustments to that plan, requires measurement of how you’re progressing towards those goals.
The big problem with analytics, though, is they are 100% hindsight and largely short term. That isn’t to say that they aren’t useful or important, as they can help point a business in the right direction based on past performance or the actions of your existing customers. It’s like the sketch of a painting before an artist begins to add color. For companies looking to break through the barriers of limited growth based on known data, there is the practice of Business Intelligence (or BI). BI is much more than just analytics – it’s the structure of the painting plus the color and depth that make a painting a work of art.
What is Business Intelligence?
Believe it or not, business intelligence isn’t a new term. It was first coined in the 1860s and was used to refer to businesses that employed information to get ahead of their competition. Since then, the term has evolved to be much more.
Today, BI is used as a phrase that encompasses the tools, methodologies, and technologies that allow businesses to make data-driven decisions across the organization. Through the use of BI, individuals across the organization, from leaders to operational team members, can have access to information that informs them on how they can improve. The power of business intelligence is two-fold. On one hand it pulls together a larger set of data than traditional analytics to give a clearer picture, and on the other, it paints a picture of your data through the use of tools such as dashboards. More on these below.
How Business Intelligence Differs from Analytics
At first glance, it may sound like data analytics and business intelligence are just two ways of saying the same thing. There are some important differences between the two. Data analytics focuses on finding meaning to why things have happened in your business. Why did sales drop last year? Why are customer service requests taking so long? Questions like this can be answered by looking at a company’s existing data and then using that information to make educated predictions as to what will happen going forward. BI, by contrast, goes one step further, examining things like what, when, and who. The depth of tools and techniques that are part of BI allow for greater understanding of the items being examined and make it easier to view the information.
So, where data analytics might get an answer to why did sales drop last year, by applying BI tools and methodologies we can go deeper and ask will it happen again, or what will happen if we change who we market to. Even more important, BI can help you see the data in ways that prompt the questions you never thought to ask.
The Benefits of BI (Regardless of Company Size)
The tools and technologies that are used in BI used to be cost prohibitive, making it a resource that only large enterprises could leverage. Thanks to advancements in cloud computing and simple SaaS tools, BI is now available to every organization, regardless of size. Klipfolio is a great example of this case. See the pricing page for an example of how powerful BI tools like Klipfolio are now easily accessible to organizations with all sorts of budgets.
With availability no longer a concern, companies can concentrate on the benefits business intelligence can bring to their company.
BI lets you get ahead of your competition: Competition is a factor no matter how big or small a company is. Because BI allows you to look at your data in context with other data sets – such as social media, industry data, and environmental data – you have a larger view of your business and products and their performance.
For instance, your data may only tell you how your existing customers want to be marketed to. But by pulling in additional demographic and interest data you can find similarities between your existing customers and potential customers, then use that data to reach those potential customers where they already are online or off.
Clear view of your data: One of the most exciting elements of BI is the ability for everyone – even those without data science skills – to understand and dig into information and trends. Reports and dashboards make data quick and easy to grasp and therefore making it easier to take action on what was learned.
See into the future: Well, at least to some degree. Because of the larger datasets that BI can process, what-if analysis becomes fast and simple. Predictive analytics use machine learning to pull together massive data sets, “learn” from the past, and make predictions about the future. And prescriptive analytics go one step further, laying a path rooted in data to reach company goals.
BI Tools That Make It Easy
As mentioned above, there are several recent technological advancements that make BI faster, easier, and more accessible to all businesses.
Cloud computing has made storage and processing cheap and available to all companies. With shared resources and ubiquitous access to the Internet, organizations are able to leverage the large, powerful machines that a cloud provider has and scale the size of storage or the number of processors needed quickly and without needing to buy expensive equipment or use internal IT resources to set up.
Artificial intelligence and machine learning have created the opportunity to process large amounts of data and extract actionable insights from that data quickly. Previously, that required a data analyst who could only look at so much information at a time. But the combination of machine learning and the cloud make processing and understanding the data a scalable and efficient practice.
Dashboard and report generation are probably the biggest BI elements that make data insights available to businesses of all sizes. Through rapid graphics processing, dashboards can be created to pull together a myriad of data and present it in an easy to understand format.
When all of these elements are pulled together you have powerful tools that are affordable and at the fingertips of every business owner. Readily available SaaS tools, like Klipfolio, have pre-built integrations for a variety of data sources and can create on the fly dashboards that make the data understandable and, more importantly, actionable.
Business intelligence may not be new, but thanks to recent technological advancements it is poised to be the single biggest influencer to business growth and success in the modern business world. Thanks to the accessibility of BI technologies, leveraging BI is made possible for everyone, from the huge enterprise to the mom-and-pop corner store. However, even though it’s readily available, not every business is leveraging the power, so the ones that do triumph.