In the past when automation and digitization were still unknown, who would have ever thought of smart machines, intelligent companies and business intelligence? Business decisions were then mostly based on individual experiences and intuition. As technology advanced, computing led the way for companies to access massive data in less time and use them to make important business decisions. By the mid 1980s, business intelligence began to take its roots.
What exactly is business intelligence? Technically, business intelligence is a broad suite of applications but its main idea is to gather, store and analyze data to make better and more strategic business decisions. BI applications involve reporting, forecasting, data mining, statistical analysis, online analytical processing or OLAP and many more. They may be crucial to all the operations of an enterprise or needed only to meet special requirements.
The success of any business intelligence solution depends on three important factors – the level of commitment of senior management, the level of business need and the amount, quality and relevance of data gathered. Senior management sponsorship is critical to ensure that project managers and implementers see through the project until the desired result is achieved. Business need is often driven by competition and the desire to be ahead in the market. Any BI implementation is destined to fail without good data. The source, consistency, structure and content of data are critical elements that contribute to proper data profiling.
What’s in It for Businesses?
Data is an integral element of business intelligence upon which wise business decisions are made. The best decisions can only be achieved if business owners know where their businesses have been, where they are now and where they are going. More specifically, the benefits of BI to businesses are wide-ranging depending on their requirements, budgets, resources and capabilities.
BI eliminates guesswork. Although intuition and gut feel are still used by some business owners, most of their decisions tend to be erratic and inaccurate. Valuable information, reliable sources and a thorough analysis of data eliminate the temptation to guess and provide business owners real time trends and updates necessary for predictive analysis.
BI keeps business leaders informed about progress towards business goals. The program is commonly known as business process management through the use of business or performance metrics to measure and benchmark the performance of individuals and the organization as a whole.
BI allows companies to get insights into customer behavior. With business intelligence tools like Oracle Business Intelligence Enterprise Edition (OBIEE), Oracle BI Applications (OBIA), and Endeca business owners and managers are able to see what customers are buying or not buying. They can then leverage this information to offer products and services that customers need and want to buy while taking out items that are not saleable.
BI helps streamline operations and improve efficiency. Important data that is made accessible to all units, departments and divisions through a dashboard, for instance, can make communications smoother, more open and more easily understood by everybody. This simplifies processes and improves efficiency.
BI allows business leaders to know the true costs of doing business. This is an important tool for business owners to help them reduce costs and improve ROI, the ultimate goal of any business.
The key to successful business intelligence is viewing it as more than just technology and tools. It is often associated with mere software tools and many businesses fail to use it as valuable knowledge to run their businesses to make fact-based decisions. The main function of BI is to deliver intelligent data to managers so that they can have more intelligent insights, come up with more intelligent strategies and arrive at more intelligent decisions.