Have you ever wished you could get a glimpse into the inner workings of your organization to understand more about how and why things happen? Well, I’ve got great news for you — you can! Business intelligence tools give you just this opportunity, but they can do much more! For those who’ve wondered what BI is good for, this article highlights the four main business intelligence applications and what it can do for your business.
Origin of Business Intelligence Applications
The uses of business intelligence tools to enhance your business operations is not a new concept. In fact, the phrase business intelligence goes back to the 1800s when the term was first used in a book to describe the way a financier had been outsmarted by competitors who used knowledge of the market to play it. Of course, we’ll be operating from a more modern understanding of the term: BI, as we use it today, refers to technologies, practices and applications that collect, integrate, analyze and present business data with the intention of making data-driven business decisions.
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BI software solutions analyze data that users input and/or are fed from data sources. Then it organizes that data according to any patterns or trends it finds. Next, it presents those patterns in visualizations, allowing even users unfamiliar with any kind of statistical analysis to understand the information being presented.
With the insights and trends these visualizations make evident, organizations can come up with up-to-date and well-informed strategies. With the latest technology and innovations, there are countless BI applications available for varied types of data analysis.
Any forward-thinking organization should identify what tools market leaders are offering and how these tools can positively affect their own organization. Here are four key business intelligence applications that can help improve your organization’s operations:
Applications of BI
1. Sales Intelligence
A key application of BI focuses on where your business meets the customer. Customer negotiation is a crucial skill that every organization’s sales department should foster. Sometimes it can be hard to move leads along the pipeline and convince potential clients to buy your product or service. Through the applications of business analytics and intelligence, this process is becoming smoother and more predictable.
Business intelligence collects data on specific KPIs like customer demographics, conversion rates, sales metrics, etc. Then it organizes this data into structured visualizations like graphs, pie charts and scattergrams. Users can identify trends from this data that provide insights into customer behavior and business operations. Knowing the customer means you can better serve them!
The reports and dashboards generated by BI are also very useful for backing up claims with easy-to-interpret data for potential clients. Managers can utilize the information gleaned from BI analysis to make data-driven decisions based on hard data and forecasting.
There’s another benefit to the application of business intelligence: in business, staying a step ahead of your competitors is vital. The data collected by BI systems helps managers stay informed about where their business is in relation to different KPIs so they’re never caught unaware. Planning is one of the most important steps to stay on top of the market in any industry, and BI makes planning easier than ever before.
Given the competitiveness of the modern era, great sales opportunities need to be found and converted as efficiently as possible. BI applications are a great way to optimize the organization’s sales operations. Sales and marketing teams can use BI to discover trends in client preferences, letting the organization maximize sales within their ideal client bases. This helps them focus on targeting highly-qualified leads and improves everything from conversion rates to overall profit margins.
Used in conjunction with customer relationship management (CRM) software, BI offers businesses a sophisticated method for getting up close and personal with their customers and making informed sales decisions.
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Business intelligence software utilizes a range of data analytic tools that are designed to analyze and manage data related to your business operations. This data, presented in the form of visualizations, allows the organization to monitor logistics, sales, productivity and much more. Some business intelligence platforms offer custom reporting abilities where users can specify their parameters. Others offer out-of-the-box reporting templates that already include industry-standard metrics.
By presenting the data in intuitive visuals and easy to comprehend formats, business intelligence systems enable even the least experienced employee to draw insights from data. Instead of relying on trained data scientists to analyze your data, you can analyze and present your own data to shareholders, other departments or your teams.
Translating data into visual formats is important for cognitive processing. Our brains process images 60,000 times faster than text! Let’s look at an example:
In this graphic from Visual Capitalist, the global distribution of wealth is presented visually. Intellectually, I understand that one percent of the population owns more wealth than any other population demographic, but what does that really mean?
By taking the raw data of wealth distribution and portraying it in a simple, visual way, the abstract numbers become more concrete in our minds. Less than one percent of the world’s population owns almost 50 percent of all the wealth in the world! The shocking difference in size between the lowest demographic of less than 10,000 is even more striking, bringing the concepts of poverty into focus in a way that simple numbers can’t. This viral video from 2012 generated a lot of buzz for visualizing the wealth gap in America — the old saying “I’ll believe it when I see it” can be taken literally when applied to data visualization.
A crucial business application of BI is reporting. As we’ve covered, business intelligence tools collect and study unstructured sets of data in addition to organizing and using them to generate a range of different types of reports. These can include staffing, expenses, sales, customer services, and other processes.
Reporting and data analysis are similar, but they vary significantly in purpose, delivery, tasks and value. Reporting is the process of organizing data in summaries with the intention of monitoring business performance. Analysis is the process of exploring data to extract insights that can be used to improve business practices.
Basically, reporting turns data into plain information. Analysis takes data and turns it into actionable insights. Both help businesses improve their performance and monitor operations, but use different methods to do so. Reporting shows users what’s happening and analysis explains why it’s happening. Both processes can be carried out using visualizations, but don’t have to.
Business intelligence tools are ideal for handling dynamic data. Historically, data visualizations were static, and a new one would have to be created for every variable change. Modern BI software provides interactive dashboards that can update in real time, offering a new level of usability and agility in data analysis.
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4. Performance management
With BI applications, organizations can monitor goal progress based on pre-defined or customizable timeframes. The data-driven goals may include project completion deadlines, target delivery time, or sales goals. For example, if you’d like to reach a certain sales goal, your BI system can analyze previous months of data and suggest a reasonable goal to aim for based on past performance.
These goals can be tracked closely to deliver gets -time updates on goal progress. This helps you understand what gaps might remain. Users can set the system to alert them when they are getting close to a target or if the time limit is ending and they have yet to reach their goal. This helps managers and employees alike stay on top of their progress and helps keep teams goal-oriented.
Users can also monitor goal fulfillment and use progress data to gauge the overall productivity of an organization. Unlike instances when a substantial amount of time is lost tracking down or organizing urgently needed data, information is always readily accessible. This saves businesses time and money — not to mention makes your lives easier!
How to Choose a BI Tool
Now that we’ve discussed the business applications of BI, you might be wondering how to go about choosing a software system for your business. So we’ve compiled a simplified guide to selecting business intelligence software:
It’s important to select business intelligence software based on your unique requirements, so you should start by identifying the most crucial features of BI that your organization will need to use. It’s better to only choose modules you’ll definitely use than try to implement a sprawling solution with a huge list of capabilities that you don’t need. Overbuying raises the cost and decreases the likelihood of a successful implementation, so starting small is often a safe bet. You can always upgrade as your company grows!
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Once you have a list of requirements, you can start comparing BI tools based on how well they meet your unique requirements. Different vendors specialize in different niches even within the BI field, so we recommend rating solutions starting with your most desired feature and then working your way down the list from there. Keep in mind: bigger isn’t always better, and paying more for quality often makes a big difference in the long run.
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Shortlist and Trials
You should have a list of five or six vendors who meet all or most of your requirements. Now, you have to narrow it down even further. This is when pricing, demos and trials come into play. Most vendors offer either free trials or guided demos of their products so users can get a feel for the UI of the system. Make sure to only select systems you think the majority of your users can successfully use, and try to keep your budget as flexible as possible to avoid discounting the perfect match. Find out what kind of user support each vendor offers, identify whether you need any integrations with other business software and go forth with confidence!
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There are many possible applications of business intelligence, and these are just a few of the main uses of business intelligence. Users can glean insights into their customers, generate detailed reports and intuitive visualizations, as well as monitor business performance metrics from a single tool. Don’t forget to check out our interactive requirements template, comprehensive comparison report and industry pricing guide to help you select the perfect BI tool for your business!
Do you use BI tools in ways we didn’t mention? Let us know how you use business intelligence in the comments!