Business intelligence and analytics are competitive necessities in today’s fast-moving, data-driven business world. In fact, more than half of organizations across industries are using business intelligence in some capacity to drive important initiatives like new revenue streams and increased efficiency.
Yet there remains a gap between those who use it and those who use it successfully. A recent survey conducted by Sisence found that 94% of respondents felt data was critical to their ongoing strategy, but only 24% believed their companies were using it effectively. So where is the disconnect?
One key factor to keep in mind is that while data is a powerful tool, it’s not universally applied. Organizations must understand the types of business intelligence and analytics solutions that exist and apply them in ways that add the highest strategic value to their companies.
We’ve put together this quick guide to help you understand exactly what business intelligence entails, the different ways companies can leverage it, and how to choose the tools that make the most sense for your business.
- Business intelligence and analytics provides data-driven insights at a level and scope not capturable by the human brain alone.
- Companies leverage business intelligence in several critical ways including to identify problems earlier, improve operational efficiency, and refine marketing strategies with deep customer insights.
- Organizations should always choose business intelligence and analytics solutions with their specific priorities and needs first in mind.
What is business intelligence and why is it important?
Business intelligence (BI) involves the use of technology tools that enable data-driven decision making and actionable insights to help companies improve performance and identify new opportunities. While business intelligence has been around for a few decades, it has recently reached new capability levels with the emergence of AI and machine learning.
An important component of business intelligence is its data visualization capabilities, which allow teams to take large and complex datasets and present them in digestible ways that make them usable for driving strategy.
Also of note is the difference between business intelligence and analytics. Business intelligence aims to leverage past and current data to inform real-time decision making and strategies. Analytics uses past data to explain current data, and it uses both past and current data to make predictions about what will happen in the future.
In other words, business intelligence involves looking at data to see what it’s saying and make decisions accordingly. Analytics dives deeper to understand why the data says what it says, and uses those deeper insights to forecast what’s likely to happen next. Both business intelligence and analytics are critical to gleaning complete insights.
Business intelligence and analytics are important because they augment traditional business decision making in a number of ways. First, they provide the necessary data insights for managers to make informed decisions. In today’s world, any company making decisions strictly from gut feelings or firsthand observations are going to fall behind.
Business intelligence also allows organizations to expand data insights beyond the c-suite and make them part of everyday business operations. When employees have access to the level of insight business intelligence and analytics can provide, they’re able to make better decisions, be more productive, and add more strategic value to the company in their roles.
How do companies leverage business intelligence and analytics?
There are many ways to leverage business intelligence and analytics in your organization. Here are some of the most common and valuable ways to do it:
Identify potential problems sooner – Data insights allow organizations to identify worrisome incidents earlier (like a dip in sales or revenue, a drop in retention, or prospect fall-off at a specific point in the customer journey) and address them sooner and more quickly, before they turn into larger issues.
Make better decisions – Data makes decisions more informed. Business intelligence and analytics, in short, go beyond the capacity of our human minds and help us make decisions that account for larger trends and insights we just couldn’t capture without technology. For instance, it would be great for a telecom company to know the future potential of 5G so that they can come up with competitive tactics and pricing strategies.
Improve operational efficiency – BI tools help companies make smart strategic decisions about the future, but they also offer insight into daily operations that help companies make adjustments to increase productivity and daily performance.
Increase marketing effectiveness – Modern technology has given us unprecedented insights into consumer and customer behavior, and business intelligence and analytics tools are critical to accessing them. For example, Zoom took to new age marketing methods to reach consumer households in a saturated video conferencing market.
See larger trends – With BI tools, companies can access and analyze bigger data sets and see larger market and industry trends. These insights contribute to smarter competitive analyses and a better understanding of market position.
Choosing business intelligence and analytics solutions
So how do you choose the right BI and analytics solutions for your business? First, it’s important to know what’s out there. Business intelligence tools have a variety of capabilities, including data mining, data visualizations, text mining, KPI reporting and more. Most top business intelligence solution providers package all or most of these capabilities into one tool so that companies can use it in ways that benefit them.
To choose the tool that’s best for you, there’s one key strategy to keep in mind: think first about your company’s priorities and needs, then choose the product that offers the highest value in those specific areas. Simply choosing the solution with the most features or the highest brand awareness is likely not going to add the most possible value to your BI and analytics efforts.
Here’s an overview of the top business intelligence and analytics solutions on the market right now:
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