There are many reasons why BI is an intelligent business investment as the name suggests. Imagine what you could achieve if your company harnessed all the information that was available internally about your strategic operations and efficiencies (or inefficiencies) and externally about your customers, competitors, and vendors.
Cross-industry studies show that on average, less than half of an organization’s structured data is actively used in making decisions—and less than 1% of its unstructured data is analyzed or used at all.
With access to the right information, you can adequately analyze your greatest areas of opportunity and solidify your company's unique recipe for success. But you can't do it without the data. There are a myriad of reasons why businesses make the decision to invest in Business Intelligence, here are the top 10:
1. Knowledge = Power
BI integrates and stores an incredible amount of data to make it accessible for analysis. With greater access to data comes a greater understanding of the workings of your business. If you’re running your business operations and strategy from a more informed place, the benefits to the bottom line are inevitable.
2. Minimize Guesswork and Gambles
All too often, business decisions are made on guesswork, gambles, and gut-feel. With so much at stake for your business, it’s incredibly important that you minimize any possible risks in your decision-making process. BI gives you the data and tools to do just that.
With an effective BI solution you can come to every conversation and junction more informed and with the data you need to point the way to what’s best for your business. BI unites your experience and expertise with the data so that your business can move forward more quickly and confidently than ever before.
If it’s in the data, you don’t have to guess what’s right for your business. With data-driven, quantitative decision-making, you can move forward faster.
We’ll share more later on in this resource about the importance of a data-driven culture — one that is committed to enriching their decision-making with data, but know that with the data on hand, if you see success, data will be able to tell you exactly how you got there. And if an initiative fails, data can show when, how, and why to help you mitigate future risk.
3. Quicker Decision Making
26% of businesses say that data and analytics significantly changed the nature of industry-wide competition (McKinsey Analytics, 2018), and in 2019, 90% of IT professionals said they planned to increase spending on BI tools (Forbes). The ability to manage unending amounts of data is more important now than it has ever been for businesses, and turning that data into real insight with BI is what makes the difference between companies that rise above the pack and those who fail to innovate and capitalize
on opportunity.
Companies who invest in data and analytics have a strict advantage; they can easily identify blind spots in their spending and identify areas of opportunity quick enough to seize them before their competitors. Real-time data is a necessity in order to compete, and a complete BI solution paves the way to getting the right data into the hands of decision makers in
your company.
A well-designed BI system responds quickly and accurately to almost any business-related analytical query. You can use these responses to make an informed decision in real-time. There’s no need to fish through a filing cabinet or a bunch of Excel files to get a very limited sense of the best course of action.
4. Trim Your Business’s Fat
One of the quickest and most effective uses for BI is cost-cutting. A good BI system allows you
to quickly and easily identify areas for
cost savings.
For product-centric businesses, it’s often best to begin by focusing on your inventory. Your BI solution helps you identify low-turnover or idle products. Similarly, with supply chain analytics you can quickly identify opportunities to optimize your spend on items that end up in your inventory. This is true for all types of businesses from manufacturing to healthcare. BI allows you to identify and measure the inefficiencies of other areas too, such as procedural systems and employee costs.
5. Better Understand the Past, Present and Future
By looking at stats over a given period, you can get a good sense of where your business was, is, and where it might be headed. There are a few different types of analytics, and each serves its unique purpose for your business.
Descriptive analytics explores the past to reveal what has happened in your business. For example, descriptive analytics might help you find out up-to-date information like “How many claims were made today?” “How many customers bought this item last year?” or “Which region has seen greatest increase in sales among a certain demographic in the last quarter?”
Predictive analytics combines these stats with forecasting techniques to reveal what could happen in your business into the future. Predictive analytics can be as involved as creating models and simulations or as simple as using historical trends in your data to predict what might happen in the future. Predictive analytics help you realistically envision what might be ahead for your business.
Lastly, prescriptive analytics uses simulation techniques to offer advice on these predictions. Prescriptive analytics has a focus on decision-making. It uses data to forecast outcomes and consequences of possible decisions that a business could make, so that they can choose their course of action with a full understanding of the potential effects. Whereas predictive analytics helps a business determine what might happen if things continue as they are now, prescriptive analytics shows how a business will be affected if different courses of action
are taken.
With all of this information at your fingertips with a BI solution, you’ll have a clear understanding of what has led to your success and be equipped to determine the best route moving forward.
6. Efficient Data Collection
One of the most dramatic ways that BI improves the efficiency of your business is through data collection. Traditional data collection and collation is an incredibly time-consuming process. You first need to pull data from a variety of sources, identify the relevant information, then convert, merge and report the data for analysis. This error-prone manual process often leads to excessive management time determining the validity and accuracy of the data.
Everyone who’s worked in business is familiar with the ocean of spreadsheets that get generated to help analyze a particular problem. The issue is that lining up the data sets and the timing of the data in various spreadsheets can be a significant challenge. A good BI system automates this entire process so that you can focus on the outcomes of the data rather than the data itself.
7. Data Uniformity
By centralizing all relevant data into your BI system, you can put governance processes in place to conform the data into your unique business language and to control what information your company's decision makers can access based on their role within the company. This also ensures that the right people are accessing current, accurate, and uniform data across the business.
8. Easily Visualize Data
A good BI system offers the option to quickly create visualizations that are endlessly helpful in communicating complicated information. Why does this matter? Cornell University researchers found something interesting; if you present a scientific claim in pure words or numbers, 68% of people will believe that the information is accurate and truthful. But if you put a simple graph with the claim, that number rises to a stunning 97%. Why? The visual serves to confirm the claim. It makes complex information easy to digest.
With an ever-growing amount of data to possibly take in, visualizations help key decision-makers absorb the information they need to take appropriate action, without having to review every data point individually. Visualizations give data meaning. Numbers are at the heart of the business universe, but numbers are meaningless without context. Visualization provides context
in the manner most likely to inspire decision-makers to absorb information and take appropriate action.
Information Designer David McCandless in his TED Talk on Data Visualization shared: “The eye is exquisitely sensitive to patterns in variations in color, shape, and pattern. It loves them… If you combine the language of the eye with the language of the mind, which is about words, numbers, and concepts, you start speaking two languages simultaneously, each enhancing the other.” If you want to create buy-in and streamline your decision-making process, visualization is on your side.
9. Identify Systemic and Procedural Issues
Investing in a BI system for your business grants you access to detailed and crucial insights into your business’s performance. Identifying bottlenecks and procedural issues is made far simpler, allowing you to quickly and easily streamline your operations.
According to a BARC study, 35% of companies who used BI saw undeniably improved operational efficiency, and 39% saw moderately improved operational efficiency, leaving only 27% who saw little to no operational improvement coming from BI or who did not measure their results (BARC, 2016).
In a retail setting BI can be used to optimize the time from order placement to delivery, helping retailers identify bottlenecks in their ordering and fulfillment systems. This results in increased customer satisfaction and an increased capacity to take on new orders.
For many organizations, BI also improves data consistency and accuracy throughout the organization, eliminating confusion about what information can be trusted. With a single source of truth, departments spend less time comparing data and more time collaborating.
Lastly, BI can also help eliminate inefficiencies that stem from the use of outdated legacy systems. An effective BI solution integrates your employees’ most common tasks into a single program, reducing the number of programs they need to access throughout the day, not to mention reducing the amount of time IT spends managing those programs and employee access to them.
10. Gain Insight into Customer Behavior
With the combination of internal and external data that forms the basis of any good BI system, you can constantly analyze the behavior of your customer base. Are sales of a certain product or service drying up? Are there changes in your customer demographics? You can use this information to preempt trends, future-proofing your business and harnessing opportunities for growth.
All in all, more information means that you and every employee can make better decisions for your company and for the customer. BI reinforces your company's most vital processes, reducing risk and charting the course for new initiatives and opportunities.
Make better decisions with your data.
Read more about how to analyze your data to identify market opportunities.
