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Many of us have heard about Business Intelligence (BI), but there is often confusion about what it truly means. This article aims to explain BI in simple terms and highlight how it can benefit you and your company.
BI can be defined as the process of analyzing your company's data to extract valuable insights, utilizing technological tools that automate this process. It supports decision makers with the right information at the right time and in the right place, enabling them to make informed business decisions. The right information in the right place at the right time increases the effectiveness of any enterprise.
For example, a nationwide fast-food company might use BI applications to statistically track the average monthly revenue of loyal customers or identify products with the highest margins. With this information, they can:
- Calculate the profitability of each branch across different seasons.
- Determine their market segment.
- Calculate market share.
- Identify opportunities and threats.
These are just a few ways in which a company can benefit from the implementation of BI software. There is a wide variety of applications or software that empower organizations to quickly analyze data, understand trends, and address potential challenges.
What can Business Intelligence do?
Business Intelligence (BI) offers a wide range of capabilities, including:
- Generating global or section reports.
- Creating a customer database.
- Developing scenarios for decision-making.
- Making sales and returns forecasts.
- Facilitating information sharing between departments.
- Conducting multidimensional analysis.
- Generating and processing data.
- Transforming the decision-making structure.
- Enhancing customer service.
BI has proven to be highly effective because it provides companies with a competitive advantage by integrating people and technology together to solve problems. The following are common areas where BI solutions are used:
- Sales: Sales analysis, identification of key customers, product and market analysis, forecasts and projections.
- Marketing: Customer segmentation and analysis, tracking of new products.
- Finance: Expense analysis, portfolio turnover, financial ratios.
- Manufacturing: Line productivity, waste analysis, quality analysis, inventory turnover, and critical parts management.
- Shipments: Shipment tracking and analysis of reasons for lost orders.
If you can answer “yes” to at least one of the following questions, you may benefit from BI solutions:
- Do you spend more time collecting and preparing information than analyzing it?
- Do you sometimes get frustrated when you can't find information that you are sure exists within the organization?
- Do you spend a lot of time trying to make Excel reports look good?
- Would you like insights into past strategies implemented by previous managers?
- Are you unsure how to utilize the vast amount of information available in the company?
- Want to know which products were the most profitable during a specific period?
- Are you unaware of your customers’ buying patterns based on different regions?
- Have you missed business opportunities due to delayed information?
- Do you work overtime at the end of the month to process documents or reports?
- Are you uncertain if your team is achieving planned objectives?
- Do you lack clarity on whether there is effective communication between the different areas of your company towards a common strategy?
- Are you puzzled about why customers are returning merchandise?
