You’ve probably heard the saying, “work smarter, not harder.” That turn of phrase might as well have been invented for business intelligence tools. Business intelligence software (BI) comprises a range of data analytics tools that analyze and manage data related to your business operations. Some of the benefits of business intelligence software’s rich visualization capabilities allow businesses to monitor sales, logistics and even productivity.
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It also provides extensive data analysis using rich, intuitive reports. By presenting your data in an easy-to-understand format, BI software helps you understand your business’s strengths and weaknesses while providing actionable insights into KPIs and other important metrics. This visibility makes it a critical tool to ensure competitiveness and profitability.
This Article Covers:
- How does Business Intelligence Work?
- Benefits
- Get Valuable Insights into Your Business
- Visualize Important Information
- Perform Data Mining
- Establish Benchmarking
- Leverage Performance Management
- Access Sales Intelligence
- Streamline and Trim Operations
- Eliminate Guesswork
- Improve Inventory Management
- Get a Competitive Edge
- Increase Operational Efficiency
- Boost Customer Satisfaction
- Streamline Competitive Analysis
- Boost Access to Critical Information
- Make Data-Driven Decisions
How Does Business Intelligence Work?
Most organizations store data in different formats and locations. They can’t unify these data sources in a common, centralized format and use them for analysis. This is where BI tools come in handy. They combine data from multiple sources, including CRM, ERP and supply chain management solutions, while creating complex reports without IT team assistance.
Reports provide an in-depth view of business performance and support planning. Ad hoc reports give you valuable insights to boost decision-making, identify issues, gauge market trends and find new opportunities.
Primary Benefits
There are numerous reasons why companies invest in BI solutions. Some organizations leverage BI tools to gain insights into consumer buying patterns, while others want to improve employee engagement and productivity.
Here are 15 key benefits of business intelligence:
1. Get Valuable Insights into Your Business
Business intelligence software constantly collects and analyzes data to deliver actionable insights. Professionals can generate reports on a variety of data sets like expenses, operations processes, staffing and customer service.
There are numerous types of reports you can create using BI tools. All BI platforms will offer pre-formatted reporting capabilities that collect data for common KPIs. Businesses can also generate customized or self-service BI reports, applying BI’s excellent visuals to unique, organization-specific data sets.
Suppose neither of these options give you what you need. Instead, you can run an ad hoc report, which is put together entirely by users and usually focuses on a very specific KPI that other types of reports can’t target.
Another unique benefit of BI reports is information relevance. Because reports contain relevant data from your business operations, you can act with confidence. Plus, you don’t have to be a data scientist to use BI tools — the data visualizations these tools generate are easy to understand and explain.
In SelectHub’s survey of organizations in the market for BI software, 48% of buyers listed reporting as a desired feature.
Create reports in real time to monitor KPIs using different data sources, including customer, financial, operations and sales data. You can also access report templates that include easy-to-read visualizations like graphs, charts, tables and more. Interactive reports let you drill down deeper to fetch granular details and make informed decisions.
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2. Visualize Important Information
Operational reports can be difficult to interpret, reducing an organization’s ability to recognize and act on key metrics. One of the key advantages of business intelligence software is its excellent data visualization capabilities that let you create intuitive, easy-to-digest visuals.
SAS BI offers powerful data visualization capabilities.
Charts, graphs, videos, animations and infographics are more engaging ways to transmit information than blocks of numbers or spreadsheets. This is partly because the human brain is hardwired to process cognitive information — information that takes more than a glance to interpret and digest — much slower than visual information. Of those surveyed in SelectHub’s survey, 81% of respondents expected visualization features from their BI platform.
3. Perform Data Mining
BI analytics tools are exceptionally well-suited for powerful data mining. Data mining is the process of seeking data patterns to identify trends and draw insights. It breaks down into five steps: collection, warehousing and storage, organization, analysis and presentation. Some BI platforms can perform all of these steps, although others require support from business analytics tools, big data analytics systems or data warehousing platforms.
BI analyzes, processes and renders vast amounts of data that are impossible to manage with weaker programs. It integrates with data warehousing solutions, in-house databases (e.g. SQL servers), as well as both structured and unstructured data. This strategy offers access to valuable information and enhanced decision-making processes that businesses might otherwise miss.
Because BI software can instantaneously analyze incoming data, it helps companies catch fleeting opportunities that they might otherwise miss. With the customizable reports produced by connecting BI to a data warehouse, companies can pick up on trends in company spending, staffing, operations, client development and more.
4. Establish Benchmarking
Fast thinking and effective decision-making are important in achieving success in a business endeavor. Often, those in charge of running a business don’t have time to conduct a large-scale research project or product release. Using business intelligence software is like constantly having an in-depth research project in progress that’s compiling information for groundbreaking decision-making.
Benchmarking is a valuable data analysis tool businesses use to gauge their productivity, revenue and overall success relative to their competitors. Organizations often struggle with benchmarking, but BI simplifies the process, providing actionable information and easy-to-understand reports. That’s why benchmarking is one of the core BI requirements users look for in a BI platform.
Benchmarking reports offer accurate, timely data that allow businesses to evaluate their performance against individual KPIs or trends over time, providing valuable insight into the organization’s current state. With predictive analytics capabilities, you can take these benchmarks and implement them proactively, getting ahead of the competition instead of chasing behind them.
5. Leverage Performance Management
BI tracks, manages and implements performance goals. With BI tools, businesses can input data-based goals such as sales goals or target delivery time, then track progress on a daily basis. This tracking mechanism is known as performance management, and it provides some of the most effective and easily implemented goal management available.
BI applications make information readily accessible that would ordinarily take hours or weeks to track down and organize. Business intelligence dashboards and real-time data allow you to organize important information and get moment-to-moment updates. It saves time and lets you deal with problems immediately.
With BI’s intuitive visual analytics capabilities, professionals can track goal fulfillment and use that information to gauge overall organizational productivity. When properly implemented, BI tools can boost your performance significantly.
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6. Access Sales Intelligence
One of the most important BI benefits is that it enhances awareness. People who design business intelligence software know companies can’t take advantage of opportunities they miss. Instead, they design software to make those fleeting opportunities noticeable and provide the details that allow companies to make the most of them.
A sales analytics dashboard from Domo BI.
Reports that business intelligence systems produce are viable when you need to back up your claims with hard data. They can also help make quick sales decisions with real-time data and mobile BI reports.
When it comes to sales, this type of software isn’t only effective at supporting your arguments. It also helps you identify trends in customer preferences, so you’ll be the first in your industry to know what to offer customers. Plus, nothing tops off a pitch like a beautiful data visualization — BI has your back.
7. Streamline and Trim Operations
A lesser-praised business intelligence benefit is its ability to cut down waste: this includes operational and administrative work that can be automated with a BI system. BI does the work that data entry employees or data analysts would typically get saddled with, like data organization, de-duplication and other repetitive tasks.
This has a number of benefits: first, employees can devote their time to more intensive tasks, increasing productivity. It can also save time and money while reducing human error. It also allows you to identify how well the organization is doing with the current staff so you can grow or downsize accordingly.
BI systems can identify waste in your operations by pinpointing pain points, bottlenecks and inefficiencies in manufacturing, operations and sales. With predictive analytics, BI will even offer suggestions to alleviate these problem areas.
8. Eliminate Guesswork
Without business intelligence software, companies have to gamble when making important decisions regarding management, finances and marketing efforts. With these tools in place, the decisions made by company leaders are more data-driven and often result in a competitive advantage for your organization.
BI implements a data structure to encourage data-driven decision-making and helps you know the best plan — not just guess at it. This business resource will not only lead to greater profitability, but it will take a great deal of the stress and uncertainty out of running a business.
9. Improve Inventory Management
Business intelligence tools can extend into purchasing, procurement and inventory management. You can generate reports detailing stockroom needs to determine when to purchase new inventory. BI also tracks outgoing inventory, so you can prepare for future buying trends and reduce inventory waste.
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10. Gain a Competitive Edge
The number of businesses utilizing BI is only increasing. According to MarketsandMarkets, the global business intelligence market is predicted to expand from $23.1 billion in 2020 to $33.3 billion by 2025, with a 7.6% CAGR. It’s not unreasonable to predict that in the next 10 to 20 years BI adoption will be the norm. This thought is especially true as the BI market gains increasing pervasiveness and traction. The future is bright for BI.
Business intelligence gives organizations a tangible competitive edge in an increasingly competitive market. Making quick decisions in the business world is part of the job, but knowing those decisions are based soundly on data-driven insights offers another level of security and confidence.
Predictive modelling from SAS.
BI even offers fraud monitoring and risk management features. By tracking patterns and monitoring data behavior, BI can identify how likely it is that a transaction, person or network is fraudulent. The same data mining feature that gives sales teams insight into customer desires can make risk assessments and predictions, protecting your organization.
11. Increase Operational Efficiency
BI tools let you access and analyze data from multiple sources to gain a holistic view of business operations. This view makes it possible to identify areas for improvement and new business opportunities. When organizations spend a few hours analyzing, they can utilize their time to innovate and increase profits.
12. Boost Customer Satisfaction
BI tools empower you to gauge customer behaviors, buying preferences and trends that can directly impact customer experiences and satisfaction. Most organizations accumulate customer feedback in real time that helps retain existing customers and reach out to new ones.
13. Streamline Competitive Analysis
Track competitors’ sales and marketing performance to learn how they differ from your business. Furthermore, leveraging BI tools for budgeting, forecasting and planning provides a competitive advantage.
14. Access to Critical Information
With the huge amount of information generated every second, accessing the right information at a particular time can be challenging. BI systems offer visualization capabilities to provide a better understanding of historical and present data, real-time updates, forecasts and trends.
It allows you to access key business metrics through dashboards and reports available on mobile devices and tablets. Extract crucial marketing and sales information rapidly, gauge trends and patterns, and decide on appropriate actions.
15. Make Data-Driven Decisions
Analyze data from business departments, including sales, marketing, operations, human resources and more to get actionable insights. Spend less time creating reports and dashboards and more time conducting analysis to drive effective business decisions.
Final Thoughts
There are a range of benefits of business intelligence software. It is a growing industry that has many proven advantages when properly implemented. It allows you to gain targeted insight into your organization’s past, present and future to make informed business decisions. To accomplish this, BI software collects, organizes, mines and visualizes crucial KPIs.
It eliminates waste and guesswork, promotes efficient inventory management and improves sales intelligence. The powerful combination of features and benefits of BI software provides a competitive edge that can make all the difference.
What is the greatest advantage you’ve gained from utilizing the benefits of BI? Let us know in the comments!