What is Business Intelligence? And why do I need it?
If you Google “business intelligence” you will find the definition: Business intelligence, or BI, is an umbrella term that refers to a variety of software applications used to analyse an organisation’s raw data. BI as a discipline is made up of several related activities, including data mining, online analytical processing, querying and reporting.
I prefer to think of it like this:
- Business intelligence: without it you can’t make good decisions.
Or like this:
- Business intelligence: when you know better, you do better. (I’ll illustrate this point later on with a personal story drawn from my own experience)
What Kind of Business Intelligence Do I Need?
Every business is different. What is mission critical for one won’t be for another. Metrics common to most businesses include sales, customer count, customer acquisition and retention rates.
Other business might want to measure something more specific such as project profitability, manufacturing wastage or product yield.
It’s often an iterative process that starts with some simple metrics and builds into something more comprehensive.
It’s the twin factors of the right business intelligence delivered at the right time which is crucial to business success.
You don’t need smart, cloud based, business enterprise resource management software to generate business intelligence. But it helps. Generating business intelligence “real time” is really what adds value to your business.
Not only does “live” or “real time” business intelligence improve decision making, it also saves hours of hard work trying to reconcile data from disparate systems.
My Business Intelligence Story
In a previous existence, I used to be responsible for writing a report based around the monthly business intelligence. I had to wait until the sales period had closed before I could get my hands on the business intelligence. That is because I had to wait for the finance department to extract the sales information from the CRM, reconcile it with the accountancy systems (using reporting tools like Crystal and Cognos) and then deliver the information back to me in the form of tables, graphs and spreadsheets.
This meant, that apart from basic information such as performance to forecast and budget, I didn’t really know what had happened in the business that month until after the period had closed.
Talk about labouring in the dark.
If a year on year variable showed 4% down I was required to use my various systems to identify why. The anomaly could be down to things like customer churn, staff churn, lack of sales incentive or even a bank holiday falling in a different time period. I had to comment upon all the variations across all key business metrics, for each of my 25 business revenue lines.
It was a daunting and arduous process which normally took me four complete days (hiding in a dark room). I even hired (at a not insubstantial salary) a Head of Business Intelligence specifically to help unpick all the complicated information.
However, if I had used then, the kind of software I use now, it could have been a different story.
Better and Timely Business Intelligence, Better Business Decisions
The result of having all my key business metrics on my dashboard, real time, would have been profound. Instead of being asked to write commentary about a lagging measurement; something which had already happened and which I had no chance to influence; I could have been commenting on leading measurements.
The commentary would have looked something like this:
“I could see that the customer count for week 32 was going to fall short on account of a key customer withdrawing their spend for that week year on year; so I moved quickly to put an incentive in place which encouraged not only that customer to return, but also several new customers. As a consequence we surpassed forecast by 20%”
Instead of this:
“Customer count for week 42 was 10% down year on year as a consequence of a key customer withdrawing spend. Moving forward I have planned an incentive to try and recoup losses in quarter four”
Having the right business intelligence at the right time are the two things which really make a difference to your business.
Want to talk about your own business intelligence stories? Comment below or get in touch. Trust me, I will understand!
Written by Emma Stewart – Sales & Marketing Director at Cofficient and someone who shares your pain!
Providing leading cloud based business software to businesses who want to lead.