The current market or economic phase is a data driven era called the information age. This brought both positive and negative implications whereas the negative is beyond the scope of this article. However, on the positive side, there have been numerous advancements that focus on the recent innovations made in data gathering, data processing and data analyzing sectors. Business needs have been demanding and critical lately due to the difference in marketing behavior from the past. Consumers have become more discerning with their needs and wants, and as well express them freely.
The advent of the internet, and more web based communication gateways opened to a bigger and more data pipelines towards businesses who need them. These progresses in the digital world have driven so much impact that it changed the course of history. So, how important is data in a business today?
Evolution of Business Data
Data is just a simple fact, which is often raw and unstructured. In a business setting, it could be a record of a sale or transaction, a purchase order, or a call inquiry. Each is an individual activity which has no relevance or impact unless it becomes cumulative and categorized, which will then become information. Information is data that have been interpreted and contextual, which means it can lead to a better understanding. Information, if further processed and analyzed, will yield a knowledge, which can be useful in decision making and evaluation. Cumulative sales in a certain day can mean when is the most productive or unproductive days for a business. Many call inquiries means that marketing campaigns are effective and are driving more leads. A marketer can gain useful insights through this new found knowledge from business data.
The term “business intelligence” connotes a series of processes that turns business data into a more useful and active form. With further analysis, the knowledge derived from it drives impact on its end users when it comes to decision making, performance evaluations, strategic plannings, operations management, and other related activities within a business organization. The “intelligent” part does not only imply on the analysis of data, but as well as in data gathering and sorting for a more reliable and credible source of information.
Business intelligence is most effective when dealing with big data, or huge volumes of data from both internal and external sources. One goal of applying business intelligence is to be able to interpret data in a form that is actionable for improvement purposes. Out of it, not-to-be-missed and valuable opportunities or potentials for the company may arise. It can also give insights about strategies to implement, and how the company can gain leverage and market advantage over its competitors. The usefulness of business intelligence can be illustrated in a demographics that show different popular social media. It shows overall growth, percentage of gender based users, and even income based categories of users. Also, BI is valuable in making sales and leads generation reports, like this from a BusinessIntelligence report on facts about online shopping. Business intelligence provides detailed representations of data, mostly in statistics, which a business can base crucial decision making and performance evaluation from.
The underlying science used in business intelligence is a very broad combination of different branches which focuses on different processes, methodologies, strategies, techniques and technologies which encompasses a complex and extensive process of converting data into a more insightful and actionable form. Studying everything will entail a huge amount of time to do so, but a primer will render brief but valuable insights on how it works in a business setting. Successful business intelligence implementation should be accompanied by a realization of its actual impact on the business, and in knowing what it does can help in gauging its importance and benefits. Here are six business intelligence points every beginner should know:
Point Number 1: What are the Commonly Used BI Tools?
One of the simplest form of a business intelligence tool is a spreadsheet. But through the application of technology, BI tools were developed into a software, that processes data in a more sophisticated and integrated manner. These enhancements greatly improved the already valuable functions of BI tools, which also renders its operation and report generation faster and more diversified. Reporting tools in business intelligence are flexible and dynamic suite of data processing techniques, which can be customized according to the unique needs of a specific business. It can conform well with the business model a company is being implemented, and at the same time can be effectively integrated with other business softwares. Some other factors involving its targeted functions and benefits include market conditions, consumer behavior, product and service involved, or other organization variables. BI tools list down its common implementations in local information systems, business performance management, process mining, dashboards, OLAP, reporting, data mining as well as spreadsheets.
Point Number 2: What are Local Information Systems?
Local Information Systems, or LIS, are localized culmination of statistical data that have been developed using business intelligence tools, that presents data that is geographical in nature. Primarily, local information systems contain statistical data pertaining to population, or number of people belonging in a certain category of work or with common activities. LIS usually gathers data from documents, then turns it into a centrally managed data warehouse which can be used as reference for different functions. The reports that can be retrieved from these systems can be in a form of statistics, graphs, charts, census or maps. Local information systems are being utilized by different people of interest like community workers, marketers, and even local citizens. In business, LIS is valuable in mergers and partnerships operating in one local area, to have a sustainable and central data management source for streamlined analysis and reference for their businesses.
Point Number 3: What is Business Performance Management (BPM)?
Business performance management is a formalized and credible management and evaluation of a specific business sector, or overall business performance in varied market conditions. Its core functionalities are being implemented effectively through the use of business intelligence tools, like goal setting, measurement or statistics based evaluation of business progress, and touch points for interventions in making certain improvements along the way. All of the its functions are within the context of analytical application of technologies in order to provide a more reliable and organized way of performance management. These functions also happen simultaneously in most aspects, and can be conveniently monitored within a single platform, which a business intelligence tool provides. The marketing, being a huge benefactor of this kind of system, have further reflected that more value added features should be integrated with BPMs. One is the efficient collation of huge amounts of data coming from various marketing campaign sources and communication gateways, for better interpretation of conclusive data.
Point Number 4: What is Process Mining?
Process mining is a set of techniques and procedures that retrieves information from data in event logs, analyze it, in order to come up with useful knowledge to be used in business processes. It aims to gain valuable conclusions and derivations from unstructured events which will then help in developing useful processes to be applied in the business in the form of control, process, techniques and organization. Process mining is particularly useful in businesses that need a series of predefined process or steps made as a reference for certain analyzation in a particular situation.
Businesses which employ services as its main products will gain beneficial insights from events that happen in the course of rendering the service like hospitals utilizing patient records of procedures or audit firms deploying procedures in different kinds of businesses. Instead of documents, process mining deal with detailed records of methods and procedures made and discover beneficial information for developing a more concrete and organized series of steps that the business can deploy easily, instead of relying in on-the-spot decision making. These procedures are also realistic as well, due to the fact that it was developed from real instances as observed and gathered from both historical and present business data.
Point Number 5: What are Dashboards?
Dashboards are visual representation of key performance indicators and their performance in a graphic or charted form, as it happens. It is an efficient way of monitoring and acting on crucial performance indications not very long after they were perceived. Decision making is effectively implemented because of an accurate representation of its performance levels as indicated in a dashboard. The term “dashboard” came from a physical monitoring gauge of a car, wherein several key car performance gauges are present like distance, speed, etc. In analogy, a business dashboards shows different market and business key performance gauges simultaneously, which is intuitively designed according to business or user preferences and effectiveness in displaying accurate information.
A dashboard creates visibility of all important business functions and their corresponding performance levels, for better monitoring and supervision and a faster action over red indications, or one that requires immediate action. It can also effectively align business functions and goals in a single platform, for a more streamlined approach in simultaneously happening workflows. It increases productivity by displaying all on demand information at the same time. In addition, it can also generate reports that show new business trends, as they happen. Business intelligence tools such as dashboards utilize the same business data being used by other intelligence processes, which maximizes business data’s role the more.
Point Number 6: What is Online Analytical Processing (OLAP)?
A broader, but still relevant understanding of business intelligence can be found in the use of Online analytical processing tools, or OLAP tools. It is basically employed for analytical reports on sales, marketing, executive, financial and management. It encompasses the technologies of data mining and data analytics to support multi-dimensional analysis of data from different perspectives, in order to come up with decision critical reporting and even the anticipation of future trends and market shifts. The online aspect of OLAP denotes its interactive feature of real time analysis in different perspectives. OLAP tools enable complex analytical processes to be executed in a faster way.
Other Functions of BI Tools
Business intelligence tools, or BI tools, are specialized business companion softwares that are integrated within a business system to be able to deal with all incoming and outgoing data, which are mostly in huge amounts, and apply the thorough analysis in a faster but still efficient way. Business intelligence tools utilize various technologies for data gathering, processing, analysis and reporting. The collaborative benefits of the different functions of a BI tool result in a more effective application of in depth analysis of business data. There are two kinds of reports that a business intelligence tool can generate: one that is applicable to certain market situations which supports simple question and answer, and one that is conclusive and can be applied across a specific business department. Reports yielded by BI tools have been used to make reliable solutions for differing business needs.
The functions of BI tools are well founded on many technologies that revolve around business data. The diversity of this business tool enables it to handle simple up to complex analysis, which have varied degrees of conclusions and performance analysis that are all vital in business management and planning. One of these technologies support data mining. Data mining is the application of technology within sorting, retrieving, gathering and monitoring of raw data from various sources and communication channels. It is similar with data analytics, only that it focuses on data retrieval, filtering and profiling. It is more on the quality control of data, and ensuring the integrity of data is not compromised.
There are other benefits that a business can derive from using the best BI tools, as there are plenty of other data related functions it does. One core technology is analysis using data analytics. Data analytics is a science of data analysis of the application of predefined parameters for in depth analysis of patterns within raw data, and their relationship with one another. It employs different methodologies and strategies for a more reliable output, and are normally done by analysts in a specific field. Data analytics is used to uncover very useful patterns and correlations in both unstructured and structured data, that can in turn render sensible and valuable information intended to support or conclude, depending on the purpose it is used for.
In business, data analytics is important in unearthing opportunities and potentials for improvements, innovations and increasing profits that were not previously thought of from simpler forms of studies and report procedures. Data analytics is particularly useful in expanding the perspective of a business in the data it accumulates. Data mining is usually integrated with data analytics to be able to come up with credible and strong reporting about the data it processes. The end user can therefore base his decisions in statistical data.
Business intelligence is a broad technology used in upgrading the value of business data. In a PredictiveAnalysis market review in 2015, it was revealed that 66% of the participants reported increase in budget allocation for deploying business intelligence tools compared to the values given the previous year. It just proves that businesses see an impact of its deployment in its structural system. In this competition driven market economy, more often is that leverage is achieved by making technology a business companion. Business intelligence tools are very useful in dealing with huge amounts of data coming from different points of time and sources, which is tedious to consume and analyze when taken as a whole. To know more about the best business intelligence tools available in the market, check out CrowdReviews.com’s top list.
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