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Tags: Business, Business Analytics, Business Intelligence

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Every business produces data; it often goes to waste. With business intelligence (BI), you take advantage of the data. BI tools use data from internal and external sources to develop key pointers that you can act on. BI tools produce business intelligence metrics that add value to your business operation.

Internal data can be in the form of financial statements and company reports. External reports vary from published market data to newspaper reports. A BI tool combines these two sources of information to provide you with unique insights.

With a BI tool, you get insights in the form of charts, reports, and dashboards. The once unutilized data now becomes a key asset.

Difference Between Business Intelligence and Business Analytics

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Business intelligence and business analytics are often interchanged to mean the same thing. The two terms are different. Learn the difference:

Thomas Davenport is a Bobson College professor. He argues that business intelligence should be split into 5 points:

Business analytics

Online analytical processing (OLAP)

Reporting

Querying

An alerts tool

According to the above definition, business analytics is a subset of BI. Business analytics focuses on:

Prediction

Statistics

Optimization

Sources of Business Intelligence

There are many sources of business intelligence; here are a few:

Customer Relationship Management (CMS) System:

A CMS system enables you to study your customer’s behavior. You can look closer and see what they have purchased and the frequency.

Some of the insights:

Some customers buy online, some offline. Others are a healthy mixture of both. Work on a marketing strategy customized to the customer profile.

Enterprise Resource Planning (ERP) System:

This system has information that cuts across departments. From the finance department to the sales department, an ERP system in a goldmine.

Insight examples:

You are facing a cash flow crisis; a closer look shows you the cause. You have a significant client who pays you late. The client brings in almost 80% of your revenues. The action you need to take is to diversify your clients. It’s a win as you keep your big client. You also add more clients and revenues.

You may also notice deliveries are often late. Putting in place a fleet management system can fix these issues.

Business Intelligence KPIs

BI key performance indicators (KPIs) are crucial. You can easily track specific metrics, such as sales metrics or financial metrics. But what are some of this business intelligence KPIs?

Percentage Absenteeism -This shows the percentage of absenteeism during workdays

-This shows the percentage of absenteeism during workdays Percentage Retention Rate — It shows the number of employees who have stayed with your firm. The period under review is often a year. The rate is calculated as a percentage of your entire workforce.

— It shows the number of employees who have stayed with your firm. The period under review is often a year. The rate is calculated as a percentage of your entire workforce. Sales Revenue - This shows you the revenue derived from your sales efforts.

- This shows you the revenue derived from your sales efforts. Percentage Deliveries On-Time- This shows you the number of deliveries which are on time. This is relative to the total revenues.

Factors to Consider When Buying a BI Tool

Security

A BI tool may come across confidential company data; it needs to be kept private. Ensuring your information is secure and protected is a must-have feature.

Access

You need a BI tool that you can access anywhere. A cloud platform comes in handy when your employees are working remotely. It ensures that users can keep track of the business even when away from the office.

A cloud BI tool is also easy to scale. You can roll it out across your entire workforce. This can get done without straining your organization’s network.

Synchronization

A good BI tool should easily integrate with your data sources. There are BI tools that come with built-in capability to be plugged into other data sources. This reduces the time to set it up and generate insights for your business. It also eliminates downtime experienced when using a BI tool that’s tough to sync.

One-stop Solution

Some firms use different BI tools to enjoy different functions that one tool has. Some of the tools may have compatibility issues. A one-stop BI tool should do all these functions. It saves time spent switching between different tools.

Simple to Use

A BI tool should be easy to use. It enables even non-technical people to generate insights and work on them. It also keeps the technology experts in your team focused on other issues. Everyone should be able to use the tool easily within a short period.

Presentation

A BI tool should present insights into various formats. It provides users with their preferred choice. This can be in the form of charts, reports, and pie charts. It should be flexible enough to present the data in a way the user can easily understand. It enables you to see connections across different KPIs.

Benefits of Using BI

Business Opportunities

With business intelligence, you are aware of your strong points. It enables you to take on business opportunities that you are ably suited for. You can take note of market trends and adjust your operations towards them. As a first-mover in a market, you have the edge before others catch up.

Data-Driven Approach

You can make decisions based on facts gleaned from the BI tool. A data-driven management decision enables you to be guided by logic. There is little room for significant mistakes caused by ignorance.

Clean Data

Data is usually scattered across various processes. A BI tool merges all the data into one place and presents it to you in a simple to understand manner.

Better Customer Experience

A BI tool can analyze customer service interactions and notice trends. You can see areas that need improvement. This enables you to keep more customers.

Productivity

A BI tool enables employees to focus on their main tasks. They worry less about analyzing the raw data generated. With a BI tool offering analysis within a few clicks, more time can be spent working on the pointers.