Business intelligence (BI) is the process of transforming data into actionable knowledge. It helps organizations make better strategic decisions, improve operations, and compete more effectively. It’s about understanding your data and using it to make better decisions.
But what does all of that mean for the average business owner and organizational leader? In this article, we’ll break down business intelligence basics and explain how it can help you in your business.
Article at a glance:
Business intelligence is the process of transforming data into actionable knowledge
BI tools and technologies include data warehousing, data mining, reporting, and online analytical processing (OLAP)
BI can help organizations make better strategic decisions, improve operations, and compete more effectively
For businesses, BI can be used to understand customers, the competition, and the organization itself
Common myths about BI can be easily dispelled
If you’re like most business owners, you probably have a lot of questions about business intelligence. What is it? How can it help me? What tools and technologies are involved? Don’t worry, we’ll answer all of those questions and more.
Let’s dive in.
Part 1: What is business intelligence?
Before we move into the application of business intelligence, let’s first take a step back and understand what business intelligence is.
To do this, businesses use a variety of tools and technologies to collect, store, and analyze data. This data can come from a variety of sources, including sales reports, customer surveys, financial documents, social media posts, website data, and more.
Once the data is collected, it’s then organized and processed so that it can be analyzed. This is where businesses use BI tools to mine the data for insights.
What are BI tools?
There are a variety of BI tools available, but some of the most popular include data warehousing, data mining, reporting, and OLAP.
Data warehousing: Data warehousing is the process of storing data in a central location so that it can be accessed and analyzed by business analysts. The benefits of data warehousing include improved data access, scalability, and flexibility.
Data mining: Data mining is the process of extracting valuable information from large data sets. It’s used to uncover patterns and trends that would otherwise be hidden.
Reporting: Reporting is the process of generating reports based on BI data. Reports can be used to track progress and identify issues, and usually the reports are shared with relevant stakeholders. The benefits of reporting include improved communication and increased transparency.
OLAP: OLAP is a type of database technology that enables businesses to quickly analyze large data sets. It’s used to support decision-making by providing quick access to large amounts of data.
As you can see, there are a variety of BI tools available to businesses. The right tool for your business will depend on your specific needs and goals. But before you can select the right tool, you need to understand how BI can be used.
Part 2: How can businesses use BI?
There are a variety of ways businesses can use BI, but some of the most common include using it to understand customers, understand the competition, and understand the company’s inner workings.
One of the most common uses for business intelligence is to better understand customers. BI can be used to track customer behavior, understand customer needs, and identify new opportunities.
Another common use of business intelligence is to better understand the competition. BI can be used to track competitors’ behaviors, understand their strengths and weaknesses, and identify new opportunities.
BI can also be used to better understand a company’s inner-workings. This includes understanding employees, processes, and systems.
BI can be used to track employee behavior, locate process bottlenecks, and identify system issues. This information can be used to improve operations, increase efficiency, and reduce costs.
Part 3: What are the benefits of BI?
There are a variety of benefits that businesses can experience from using BI. Some of the most common benefits include improved decision-making, better customer insights, increased fraud detection, and more.
One of the most significant benefits of business intelligence is improved decision-making. BI provides organizations with the ability to quickly and easily access data, which helps businesses to make more informed decisions faster.
Better customer insights
Another benefit of business intelligence is better customer insights. BI allows businesses to collect and analyze customer data. This information can be used to understand customer needs to improve products and services.
Increased fraud detection
BI can also help businesses detect and prevent fraud. By analyzing data, businesses can identify suspicious activity and take appropriate action.
There are a variety of other benefits that businesses can experience from using BI, but these are some of the most common.
Part 4: How to get started with BI?
If you’re interested in getting started with business intelligence in your organization, there are a few things you’ll want to do in order to take full advantage of this tool:
Step 1: Define your goals
The first step is to define your goals. What do you want to achieve with business intelligence? Do you want to improve customer service? Develop new products? Increase sales? Once you’ve defined your goals, you can begin to select the right tools with the appropriate features.
Step 2: Choose your tools
There are a variety of BI tools available, so it’s important to choose the right ones for your business. The right tool will depend on your specific goals and needs. Again, establish your goals and then consider what tools would best enhance your organization’s data analysis process.
Step 3: Collect and analyze data
Once you’ve selected your BI tools, you need to dive in and start using them to analyze data in order to identify trends and patterns. This data can come from a variety of sources, including customer surveys, financial reports, social media, website traffic, and more.
Step 4: Take action
Finally, once you’ve analyzed your data, you need to take action. This action can take many forms, depending on your goals and the insights you’ve discovered through your analysis. BI tools will really only make a difference if you use them to drive action and change in your organization.
Common myths about BI dispelled
One reason that many businesses avoid business intelligence is that they believe some common myths about it. Let’s dispel a few of these myths:
Myth 1: BI is too expensive
Many businesses believe that business intelligence is too expensive, but the truth is, BI doesn’t have to be expensive. There are a variety of tools available, many of which are free or have free trial periods. You can also use open-source data to get started with BI.
Myth 2: BI is only for big businesses
Another common myth is that business intelligence is only for big businesses, but this simply isn’t true. BI can be used by businesses of all sizes to improve decision-making, understand customers, and develop new strategies.
Myth 3: BI is too complex
Many businesses believe that business intelligence is too complex, but the truth is, BI can be as simple or as complex as you want it to be. There are a variety of tools available that can make the process very simple. And if you’re just getting started, you can begin with some basic analysis.
Myth 4: BI is only for IT
Another myth is that business intelligence is only for IT departments, but again, this simply isn’t true. Business intelligence can be used by anyone in an organization who wants to improve decision-making or understand data. From marketing to sales to customer service, BI can be beneficial for a variety of departments and individuals.
Myth 5: BI is a fad
Finally, some businesses believe that business intelligence is a fad. The truth is, BI has been around for decades. It’s only recently that the term “business intelligence” has become more common. And as data becomes more and more important to businesses, BI is likely to become even more popular.
The bottom line
As you can see, business intelligence is a powerful tool that can help businesses of all sizes improve their decision-making, understand customers, and develop new products and services.
If you’re interested in getting started with BI, the first step is to define your goals. Then, choose the right tools and techniques for your business. Finally, take action on your data to achieve your goals.
Once you get started, you’ll quickly see the benefits of business intelligence for your organization. To learn more, pick up a BI tool and start getting your hands dirty with data. You might be surprised at what you can accomplish.
Check out some related resources:
Creating modern data experiences that help your customers succeed
Domo Tops Dresner’s List of Cloud BI Vendors in 2022
Data Never Sleeps 10.0
Try Domo for yourself. Completely free.
Domo transforms the way these companies manage business.