Nobody knows a business better than the employee that’s on the ground – whether that’s the owner, the manager, or a long-standing worker who has been through the company’s many reiterations.
When it comes to making decisions about where to take your business next, the employee who knows the most is invaluable. Not only can they tell you how the business functions day to day, they can help you make decisions on where – and how – to grow your business.
Normally, the employee that knows the most about a business is the one who starts it, but as the business grows, that person becomes a little bit more hands off and less connected to the day-to-day reality of the organisation. And what they thought they know is becoming more of a guessing game than an exact science.
That’s where business intelligence software comes in.
Business intelligence software helps your business function and grow. It takes the place of the physical person who knows everything about the business and makes all that information available for everyone in a key decision-making position. Every organisation, no matter how small, needs business intelligence to function, especially now that businesses have to contend with global competition and audiences in addition to their local market.
Here’s why business intelligence is the best investment you can make for your organisation.
What is business intelligence?
At its core, business intelligence is the person behind the till who knows everything about your business – but as software.
Business intelligence software records everything: how many transactions you go through, customer records, what sort of visitors you get per month, how many returns you process – everything that a business manager would need to know in order to move forward with growing the business. Business intelligence uses the data taken from the day-to-day operations to develop deeper insights into how the business is running, which then allows management to make more accurate, and faster, decisions on where to take your business next.
Everyone needs a form of business intelligence. Even if you have no intentions to grow, the landscape of consumer products is changing rapidly and retailers need to know who they’re selling to and how to appeal to them just to break even.
Why do I need business intelligence?
Think of the product, or service, your business sells. You very likely have competitors.
The change towards a more global society has come with some drawbacks for businesses: while it’s very likely that they’ve increased their revenue by marketing to other countries, they also have to maintain that sense of innovation if they don’t want to be undercut at price point by big box retailers such as Amazon and cut-price service providers. With issues such as inflation and the rising cost of supplies taking on a key focus in consumer minds, businesses need to stay agile to maintain their market-share.
Business intelligence helps a business stay agile. Not only will it let you keep track of how consumer trends are changing, but it also helps you form your business decisions on data, rather than on just a gut feeling: data that can guide you towards making the best decisions for your business.
More importantly, it can help you act on the data you collect about your business.
How does business intelligence software help?
Software is a great tool for any business, big or small. Business intelligence software is especially useful, particularly if your business is going through a little bit of a rough patch or you’re not sure which area to invest in next.
Businesses are run on data. Business intelligence software gives you access to that data in a way that makes it easy to read and make decisions on.
Without accurate data, businesses can’t scale reliably, as there’s always going to be the risk that you can’t see where the business is struggling and where it needs to improve. Months of work can sometimes become difficult to analyse when you have multiple variables to keep track of, so having business software do the tracking and analysis for you helps a lot in determining where your business is going.
Beyond your own business, business intelligence software helps you see what’s happening in the market. Trends emerge at different points of a year, and getting in on a trend early can make the difference between growing a new audience or missing an opportunity. Customer behaviour and data is also important: you’ll be able to see which of your products or services is the most popular, and maybe make a move towards growing your business in that direction.
Making decisions based on data is what creates value in business, regardless of industry and external factors. A business that monitors its industry, sees where the future is taking them, and takes steps to ensure that it isn’t lost along the way is a business that understands the fundamentals of business value – and businesses that don’t tend to keep up with the trends can fall behind quickly.
However, having data alone isn’t enough. Each piece of data you collect is going to give you a new direction and perspective on where to take your business. The trick is figuring out which KPIs you are going to focus on, and which dataset is going to be important for that purpose – and then to react to that data accordingly.
What are the types of business intelligence?
- Data Mining – databases, statistics, machine-learning to uncover trend patterns.
- Reporting – data analysis in easy-to-digest reports that can be shared with stakeholders.
- Performance metrics – compare current performance to historical data/track performance against goals
- Querying – investigating specific questions with answers from the dataset collected.
- Statistical analysis – taking results from descriptive analysis and further exploring data using statistics
- Data visualisation – charts, graphs, histograms in easy-to-read images.
- Descriptive analysis – preliminary data used to examine the aftermath of an experiment.
These are only a handful of business intelligence reports that can be generated, and each would provide your business with a different perspective on where to take your organisation. Depending on your KPIs, you probably won’t need to use all of these formats.
However, the key to accurate data is to get multiple perspectives on that data, so branching out into different reports is a good way of getting a good idea of the kind of things that your business is dealing with.
How do businesses use business intelligence?
You own a shop.
It’s in a small, well-to-do corner of a village, with ample parking and a decent offering: you try and make sure that you have multiple brands, and whenever you do your own shopping in a different store, you keep an eye out for the brands that look the most interesting. Your customers are mostly older people who have grown up in the village and who don’t really have the mobility to get around to other stores in the area. There are other stores that sell the same product, however people come to you out of habit.
Lately, you’ve noticed that there are less customers visiting your store. This could be as a result of the ongoing supply issues, but you’ve followed all the rules and regulations, and you’ve maintained your product supply even if you’re not stocking as much new stock. The stuff you do have in-store is good, but nobody seems to be interested in buying from you.
What do you do?
You turn to software.
Whenever a shop starts to falter, normally it’s one of three things: the stock you have in-store is not what your customers want, your customer-base is changing, or global trends have pushed that industry into a different direction. From behind the till or in the boardroom of an organisation, these trends are hard to predict and impossible to prepare for – they’re determined by the global state of the world, by what’s happening in different markets, by how the industry is coping with shortfall or overabundance, by the changing understanding of consumers.
Your products could be good. They could still be selling.
But if you’re in the middle of a trend shift, then nothing is going to help you until you understand what shift you’re caught up in.
So you install software. You monitor the customers that come in: are they the same ones that normally frequent your store? What do they buy? How many come back to return the product? What’s selling the best? What’s selling the worst?
Software keeps track of all of this, without you having to expend the effort to keep track. A month goes by, then two, and you can start analysing the data and seeing where your products are faltering and what you can do to improve the situation.
Tips for a successful BI strategy
Finding business intelligence software is one half of the battle. The other half is knowing what to do with it.
Here are a few tips for you to keep in mind.
Pick a BI tool that works with your organisation rather than against.
Some organisations will work better with some software than others, especially if they’re a small or medium-sized business. When you’re shopping around for business intelligence software, make sure to look at the features it offers you, and see if it can support how you would want to visualise and interact with the data.
Identify and prioritise business goals, including what data you need to achieve those goals.
No one business will be able to change everything about itself wholesale; it wouldn’t be the same business if it did! Some things in your organisation have to remain the same, so identify your business goals before you set out a strategy for improving your organisation. Think about what business goals matter the most to you: is it growth? Increased revenue?
Then, figure out what data you need to achieve those goals.
Make sure collected data is available to everyone.
Collecting the data is important, but so is making sure that that data is available to the key decision makers – and to the people in your organisation in general. You’d be surprised at who might come up with a solution to your biggest problems.
Select a team that understands the data.
Your business intelligence software might run independently, but you still need a team behind it to set it to run – so make sure that you know how to collect the data you need, and know how to analyse it for the results you want to take advantage of. Data that nobody can make sense of helps no-one.
Continually look at and improve the metrics/testing practices used in BI.
Testing your software and trying out different metrics is key if you want to understand where your data is coming from, and what to do with it once you have it. Test out different metrics, see which makes the most sense for your business, and once you have a set method, test out more metrics. Then you can see if what you’re doing is working.
The future of business is in business intelligence.
As companies gain access to even greater amounts of data, and support more consumers than ever before, businesses need to invest in making sense of their data in order to stay competitive.