We are living in the age of technological progression where every interaction results in the generation of massive datasets. Digital advancements have completely revolutionized how businesses operate by introducing newer business models and driving a customer-centric approach to transform and enhance user experience. Historically, data was viewed as a byproduct of a business operation and was written off as something without much intrinsic value. But in today’s rapidly changing business environment, data is viewed as an essential component that empowers businesses to make informed decisions, identify problems, develop accurate theories & strategies, and more.
Data is one of the most crucial assets available to businesses in the modern age. With exponential growth in the amount of datasets generated and stored by companies, it has become essential for companies to find the right data management solution for their business. This is why business intelligence is the key to an effective modern business strategy that allows businesses to learn more about their customers and drive better business decisions that increase revenue.
In this blog, we’re going to break down what business intelligence means and debunk some of the myths about business intelligence to help businesses make the best possible decisions on choosing an enterprise-class business intelligence solution for their organization.
What is business intelligence?
Business Intelligence (BI) refers to the process by which enterprises use strategies, applications, practices, and technologies to analyze data and business information to facilitate better business decisions making within organizations across various industries.
Business intelligence is a way of making sense of what all the available datasets mean and turning them into meaningful insights that are actionable towards a strategic goal that, in turn, helps businesses make sound business decisions.
Business Intelligence encompasses several technologies processes and functionalities such as reporting, data visualizations, dashboard development, tools for identifying data clusters, support for data mining techniques, analytics, performance benchmarking, perform process, predictive & prescriptive analysis and more.
Why does business intelligence matter?
Businesses in one way or the other need to translate their business data into valuable information that enables them to plan for future business strategies and make data-driven decisions. For most businesses, valuable business data is usually stored in spreadsheets or servers. Ideally, this data should provide businesses with information on consumer behavior, sales trends, and resource allocation. But this raw data needs to be processed through analysis to become meaningful, which has to be done manually in spreadsheets. This is where the Business intelligence tool comes in. BI removes the guesswork.
BI tool enables businesses to deduce actionable insights from data and offer a competitive advantage allowing the companies to grow their customer base, improve employee productivity, create a better product, enhance customer experience, and make more accurate business decisions. Business intelligence tool with data analyzing capabilities enables businesses with the ability to know what’s happening in real-time, why it’s happening, how to capitalize on it or stop it, and how to forecast what’s going to happen next. All of those answers are in your data.
Business Intelligence tool using data that has been consolidated into a data lake or a data warehouse or a data mart or operational data to provide historical, current, and predictive views of business operations, support reporting, interactive analyses, and visualization to make strategic and tactical business decisions, maximize revenues and reduce costs.
Popular myths surrounding business intelligence
Let’s explore a few of the most popular myths surrounding BI in this blog to assist business leaders in understanding BI and the value it brings.
Myth: BI is only for large organizations
Fact: Developing corporate strategies and making a data-driven decision is by no means reserved for large organizations only.
In the past, implementation of BI tools was hectic required a dedicated team of highly trained IT experts and data analysts. But today, with technological advancements and cloud solutions, it has become easy to subscribe to the service as per your business requirement. Fully hosted solutions enable SMEs to upgrade to an enterprise-grade BI platform with ease. Business Intelligence can assist businesses from any level to understand present data and future trends.
If you are running a business, BI can help your business benefit from collecting and analyzing data, no matter how small. Far more than large organizations, as customers are the lifeblood of your business, losing even a few could have detrimental effects on your business. BI plays a vital role in understanding customer behavior, predict customer demand, and influence customer behavior for improved customer retention rates, higher revenues, and enhanced levels of customer satisfaction.
Myth: BI is too complicated
Fact: An IT expert does not always have to be consulted to gain profitable insights into company data.
In the past, BI seemed like a highly complicated process – from implementation, complex analytics, data mining, pricing, and more. But today, with cloud computing capabilities and agile BI solutions, all the necessary data you need is presented in a straightforward, easy-to-digest format. Although having a technical background is an advantage, but there are many BI tools out there that are non-technical user oriented – doesn’t require a qualified IT personal.
These tools offer comprehensive self-service functions, enabling users to independently query data and create analyses, evaluations, visualizations, create interactive reports & presentations, and gain profitable insights from company data. The clarity in your data the BI tool offer, the ability to draw actionable insights, and the ability to make strategic, tactical, and operational decisions ultimately outweigh the complexities.
Myth: Excel is enough for us
Fact: A spreadsheet doesn’t provide intelligence; it provides historical data
A spreadsheet tool (Excel) is powerful but is not very helpful when it comes to managing large datasets, business needs involving data gathering, reporting, and analyzing the data. Spreadsheets are a popular tool, but some of the limitations include limited capacity – do not even allow loading and viewing large datasets, require third-party plugins for data connectivity, creating visualization for complex data becomes challenging, time-consuming, and inflexible. In many cases, spreadsheet complexities may be rampant, time-consuming, and require specific technical skills in order to create, updates and maintain macros for different processes.
On the contrary, the BI tool offers impressive data compression, enables data connection with a source like SAP or SQL server, capable of data collection – can process multiple sources of real-time data providing automated reporting, offers swift visualization capabilities, and offers enhanced security.
Myth: A data warehouse is all we need
Fact: A data warehouse is a repository of data that is used by business intelligence tool to enable data analysis and reporting.
Data warehouse is a storage architecture designed to hold historical business data from different sources. Business intelligence makes use of Data warehouses that acts as a data source designed to store and consolidate data from disparate sources to support the decision-making process.
Data warehouse is one of the many steps in the business intelligence process; users still need to measure and interpret the data consolidated in the Data warehouse, then take action based on the insights. Business intelligence relies on the data warehouse to de-cluster enormous data to analyze the data, create visualizations and reports.
Even though data warehouse is critical for data storage, they are not the only source or technology available for data storage. Many organizations go through a data storage hierarchy before reaching a point where they are in need of a data warehouse.
Myth: Too expensive
Fact: With the advancement in technology, cost have gone down with improved functionality
Many make a false assumption and believe BI requires big budgets, and it goes far beyond their needs. Thereby, they ignore BI altogether or go on using manual processes. However, the investment in a BI tool can equate to significant ROI if done effectively. Today, you can subscribe to a BI tool on a monthly basis that is delivered via a cloud platform.
The investment is completely justified as you can build a BI strategy, get automated reports, view swift visualization, develop forecasts, and offers actionable insights to make data-driven decisions and satisfy customer needs. What was once a complex tool the only specialist with advanced hardware could operate has been simplified and pushed as a desktop tool for non-techies as well.
Business Intelligence is vital for the growth of any organization. However, without a thorough understanding of it, businesses will fall behind from the competition that is utilizing the BI tool to analyze the data and use the finding to strategize their every move in the business operations.
There has been a lot of development going on in the BI landscape at the moment. The BI tool is easily accessible to a broader group of organizations as many vendors offer BI tools for a range of users – both technical and non-technical. Business intelligence is imperative for the success of any business that wants to continue to grow. With the right BI tool, businesses can easily take advantage of Business intelligence to grow their business exponentially.
To abolition these myths, business intelligence vendors need to provide agile solutions that are user-friendly and allow more business users to access the solution and experience the benefits of the Business intelligence tool.
If you have any questions or would like to learn more about BI tools or about how Sparity can help your business implement BI solutions, contact us today.