Business intelligence: definition
Business intelligence is defined as a process of collecting and processing business information to derive insights and make profitable business decisions. It is also used as an umbrella term, which bundles business intelligence software along with other tools, applications and best practices used to collect intelligent business insights, analyze the information for optimizing overall business performance.
Business intelligence depends on the process of business research to gather data. Analysis of the collected data by using comprehensive technological tools helps in getting actionable insights. The business intelligence comprises of collection, analysis, and presentation of business-related information and is more often considered as an outcome of business research enabling smarter business actions.
For example, A restaurant owner wants to understand the preference of his customers, type of cuisine they like, and why they like that specific cuisine. The restaurant went on to conduct a survey using business intelligence software and feedback is collected from customers about different types of cuisines. The restaurant owner using prominent features in the software analyzes the customer mindset and derives valuable insights about cuisines served in the restaurant. Empowered with information about what cuisine is liked by what people and what cuisine is ordered most on what day, etc., he then creates business strategies that are appealing as well as satisfying for his customers and profitable for his business.
The goal of business intelligence is to collect information and analyze it; so that a forward-thinking organization like yours can make better business decisions. Some of the trends related to business intelligence shortly are as follows:
- Increased investment in AI technology
- Big data
- The increasing importance of data governance
- Increase in self-service business intelligence software and tools
- Data interpretation through storytelling
- Collaborative business intelligence
- Embedded business intelligence
- Cloud analytics
Undoubtedly, in today’s competitive business world, the ability to use data and technology in real-time is one of the most important parameters to succeed. It doesn’t matter what industry you represent, but what matters is the access to quick information. Such access to intelligent insights helps organizations to make productive, analytical and impactful decisions. Although, what needs to be clear is that data collection alone is not enough for insights; processing and analyzing that data is what leads to actionable insights that drive business decisions.
Business intelligence: types and methodologies with examples
To make strategic business decisions and gain competitive advantage, an organization must have a clear idea of market trends, customer needs, and consumer opinions.
There are a variety of online business intelligence tools using which you can access numerous ways to collect business insights, here are some of the widely recommended methodologies widely used to gather business intelligence.
Step 1 – Data collection
The first step in acquiring business intelligence is data collection. There are various methods to collect data, which can provide reliable information for statistical analysis and help an organization to make data-driven decisions.
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Surveys
Web/Online surveys – Online Survey remains the most reliable, economical, and widely used method to reach a larger audience for data collection. As it is complicated to create, distribute, and analyze the survey results manually, most of the researchers depend on survey maker tools to get the job done. The major benefits of using an online business intelligence gathering platform are a real-time analysis of the results, cost-efficiency, ease of use, and flexibility.
For example – A company wants to understand the level of customer satisfaction with their customer service department and also want an opinion from customers on how to become more customer-centric. The company decides to conduct a customer service survey using a business intelligence platform for gathering valuable information about the staff, product and the overall quality of service provided to them. The results achieved through the survey can be used to gauge Net Promoter Score (NPS), Customer Satisfaction Score (CSAT) or even Customer Effort Score (CES).
All these results contribute to analyzing what customers feel about the current status of the service, areas that need improvement, what customers expect and what their necessities are. All these insights enabled the company to incur some changes, implement strategies, and initiate employee engagement ensuring a successful journey to become a more customer-centric organization.
In-person surveys – In-person surveys are face-to-face interviews. For years, it has been the most effective method of collecting the most accurate information. As this approach to gather business intelligence relies on direct communication, observing body traits, behavior, and reactions of the respondent also play a vital role. Suppose if certain questions make the interviewee uncomfortable, disinterested, agitated or frown it is better to skip those questions. In addition to that, interviewees body language, tone of speech, and mannerism also determine if the feedback he/she is giving is right or wrong.
In-person surveys is a costlier method compared to other methods used for collecting business intelligence. Additionally, the interviewer needs to be experienced having exceptional expertise in observing and analyzing people.
For example – Conducting face-to-face interviews of employees to evaluate their immediate supervisors is a common practice amongst many organizations. Although, the majority of these organizations have a detailed questionnaire ready, sometimes using a supervisor evaluation survey template questionnaire to gather accurate information and promote a better work culture is a good option.
Mail surveys – This is an age-old traditional method used to gather information from a larger set of audience. As technology has reached every nook and corner of the world this method to gather business intelligence has become distinct. Moreover, there are few other factors like time-consumption, expensive, error-prone, and low response rate contributed to lower adoption of this method. Online surveys have quickly emerged as a better substitute for this method. However, geographies where tablets, computers or laptops are still inaccessible, mail surveys are the best way of collecting actionable business intelligence from them.
For example – The Government wanted to survey for understanding public opinion about the use of plastic bags and was interested to evaluate their awareness regarding government initiative to abolish them. They mailed the use of plastic bags survey to the selected audience from different localities for gathering business intelligence for that area, and accordingly corrective measures were taken by the Government to eradicate the use of plastic bags.
Telephone surveys – Telephone surveys are a little costlier than online surveys but much inexpensive compared to face-to-face surveys. Such a method has a few drawbacks like the availability of the respondent or even establishing a friendly equation with the respondent.
For example – A church wanted to survey to understand why parishioners attend church and evaluate if their spiritual needs are being met by the church. A church survey template enabled them to conduct telephonic surveys with all the parishioners and get reliable information to help them understand their opinions.
- Questionnaires
A questionnaire is a set of questions used for research purpose which can be qualitative as well as quantitative in nature. A questionnaire may or may not be in the form of a survey, however, a survey always has a questionnaire.
For example – An HR of a company wanted to conduct an exit interview to find out the opinion of an employee for his time spent at the organization. The used the elaborative and highly engaging Exit interview questions to gauge the opinions and record the feedback of the employees who decided to leave. These insights were then used by the company to formulate their employee retention strategies for lowering the attrition rate.
- Polls
Polls are a little different than surveys and this approach usually consists of only one question. The response rate for polls is extremely high, as it is very easy to answer and it takes very less time.
For example – The best example for a poll would be election polls. Polls are conducted to find out which party is favored and preferred by voters that would govern the specified area in a particular term.
- Forms
Forms are a type of survey itself, however, forms are generally used to collect specific information from a respondent in each field such as age, income, gender, etc., unlike surveys which are used to gather generalized data such as opinions, attitudes, values, etc.
For example – A bank needs specific information from its customers to open a bank account. In such a scenario, a form is provided to the customer to collect specific information required by the bank to open an account.
Step 2 – Analysis
This is the step where all the data comes under a single platform. A Business Intelligence software will enable you to collect as well as analyze data with advanced analytical research tools embedded in the same software. Analyzing the data collected through various methods helps an organization to understand their customer’s opinions and find out areas needing improvement. The software allows you to compare scores (such as NPS, CES, CSAT) for varied periods and also among departments. You can use the same BI Software to analyze the data under advanced pretexts such as Conjoint Analysis, Maxdiff Analysis, Trend Analysis, Text and Sentiment Analysis and many more. This way, you would get a solid snapshot of where your organization stands among your customers at any given time.
For example – The Hospitality industry must measure customer experience and satisfaction on an ongoing basis. By analyzing and monitoring customer satisfaction scores and NPS scores consistently, the organization can improve their customer’s experience and become more customer-centric to achieve higher revenues and customer loyalty.
Step 3 – Reporting and presentation
After analysis, the next step is to understand what the metrics mean. This step is the most important, as the wrong interpretation of the data can send your organization down a cliff. Conversion into visual infographics can sometimes make it easier for a person to understand. Such understanding will enable the organization to find answers to most pressing business, operational and marketing questions.
These steps will help you to start using business intelligence software effectively, however, this is not the final step. An organization needs to continuously monitor and analyze real-time data to stay in the competition and keep meeting the ever-changing customer needs or even figure out the next best steps for the future. Following this path to utilize business intelligence effectively will provide an organization to spend money and time more wisely and tackle future goals, needs, and trends successfully.
Advantages of business intelligence
Business Intelligence has a direct impact on an organization’s strategic, tactical and operational business decisions. It supports fact-based decision making using historical data rather than assumptions and gut feelings. These tools perform data analysis and create reports, summaries, dashboards, maps, graphs, and charts to provide users with detailed intelligence about the nature of the business. Following are some advantages of Business Intelligence:
- A right Business Intelligence software helps to boost productivity in the organization by displaying the gathered data using reports, analytical dashboards, and infographics.
- It provides an organization with a holistic view of the company, segmented into various departments, products, services, etc., making it easier to identify areas that need attention or improvement.
- Complex processes in an organization can be streamlined using advanced automated analytics, enabling a company to reduce time and effort leading to faster and efficient business processes.
- Visual infographics and easy to understand reports can be generated using BI software allowing even non-technical individuals to understand the meaning of their metrics.
We recently published a blog that talks about Customer Intelligence; why don’t you check it out for more ideas?
Importance of business intelligence in an organization
In today’s ever-changing business environment, there is a need for business intelligence to enjoy a competitive advantage. Business intelligence helps an organization to evaluate customer opinions, the market and customer behavior, which gives them an upper hand in winning higher market shares and reaping higher revenues. Following are some reasons why business intelligence is an asset to any organization:
- Gather actionable insights – Business intelligence is transforming business-oriented raw data into usable information. Raw data will not give you actionable insights about your business parameters but BI will provide an organization with a comprehensive analysis of data to identify pain points or opportunities that can be used to devise more customer-centric strategies.
- In-depth understanding of the organization – It is difficult to understand the business as a whole if you don’t know each component of the business, including those that are often overlooked. Business intelligence enables an organization to identify each component that requires attention and make improvements accordingly.
- Achieve sales and marketing targets – Achieving those sales and marketing goals are difficult if the company does not understand the target market, the trends or the ever-changing customer needs. Business intelligence delivers in-depth analysis to kickstart an organization’s sales, boost the performance of the marketing function and help in synchronizing both the teams to achieve those sales and marketing goals.
- Anticipate buyer behavior and trends – Customer engagement is a buzzword often discussed in today’s business world. Hence, drawing prospective customers to you is essential, rather than relying on old outdated techniques based on a hard sell. A business intelligence software enables a company to create holistic customer profiles based on their every interaction or every feedback during the customer journey. This allows them to gather valuable market intelligence, which provides them with detailed insights on buyer behavior and trends, thus allowing them to improve sales, marketing or growth strategies accordingly.
- Boost overall productivity – Many organizations have inefficient bottlenecks, old traditional processes and manual routine tasks that hinder the growth of an organization. Business intelligence software can release these bottlenecks, automate routine tasks and refine processes bringing new levels of organization and prioritization to everybody’s work. This enables efficient and highly responsive customer service, better use of human resources, accurate measurement of marketing campaigns thereby boosting the overall productivity across the organization.
- Data governance and regulations – The new GDPR law has put many restrictions on the way personal data is being collected, used, stored, processed, and shared. The new laws include requirements to keep data accurate and up-to-date, to demonstrate grounds for processing data and formulate a clear privacy policy for improved transparency. A GDPR compliant business intelligence software e helps you to centralize all the data which in turn improves transparency and exposes inaccuracies and gaps. Furthermore, it enables a company to be in a position of meeting the global regulations and laws to avoid being blacklisted by the regulators and the customers as well.
- Accelerated ROI – Last but not the least, business intelligence helps an organization to accelerate ROI by managing day-to-day efficiency, sales conversion metrics and customer experience through analysis and modeling. It also enables a company to get valuable insights into consumer buying behavior, customer experience, and customer needs, putting the organization on a path of success.
Gone are the days when organizations relied on making the best guess or going with a gut feeling. Business intelligence empowers organizations with accurate data and updates in real-time. It also explored the upcoming market trends, and forecasting means and even at times allowing to predict “what-if” scenarios to eradicate the need to guess or estimate.
