Business Intelligence (BI) solutions are becoming an essential part of every company’s operations. They enable businesses to transform massive amounts of data into useful insights. Organizations use BI to monitor and identify company trends in order to implement processes to simplify various functions and services.
BI is the process where technologies, tools, strategies, and methods are used to gather, evaluate, integrate, and display key business information.
By utilizing BI effectively, the organization will have access to actionable data, gain valuable insights into industry trends, and enable a strategic decision-making approach.
Below are a few stats that notifies the increasing use of Business Intelligence.
- As per Mordor Intelligence, the Business Intelligence Market was valued at USD 20.516 billion in 2020 and is expected to reach USD 40.50 billion by 2026 and grow at a CAGR of 12% over the forecast period (2021-2026).
- According to Datanyze, the global market size of the Business Intelligence industry is 236,320 companies, and there are 273 companies producing Business Intelligence technologies.
- As per PR News Wire, North America is predicted to have the largest market share, due to the presence of key industry players in the area. In addition, factors such as rising competition, intense technological R&D, and a growing trend of data proliferation are aiding the market’s expansion in the country.
Organizations must be flexible in today’s business environment to keep ahead of the competition and cater to a constantly changing consumer base. In both of these critical tasks, BI is a valuable asset, that’s why we have provided the answer to the much-hyped question- why is business intelligence important?
Importance of Business Intelligence
The ability to derive action from data gives you a competitive edge, allowing you to expand your consumer base, increase employee training and productivity, and improve your product. Business intelligence allows us to see what’s going on in real-time, why it’s happening, how to stop it or profit from it and predict what’s going to happen next. Let’s dive into the importance of BI below.
1. Gain customer insights
Businesses can better understand their clients by evaluating their purchasing behaviors and establishing user profiles using effective business intelligence systems. Many organizations are looking for custom software development solutions to help them with BI systems and management. This enables them to provide their customers with better products and experiences. Customer segmentation is an example of how a company may use BI to better understand its customers. Customers can be grouped into distinct categories based on the things they buy, when they buy, and how often they buy. These segments are utilized to provide a better overall experience for the consumer, such as custom-tailored product offers or bespoke reminders, among other things.
For example, a retail company making use of business intelligence tools and analytics can forecast purchases and deliver personalized offers to customers via their app and email based on customer preferences. This strategy encourages existing consumers to visit the store more frequently, resulting in increased revenue. This results in higher consumer satisfaction and positive brand connotations.
2. Improved business operations
Organizations that use business intelligence platforms will have more control over their operations. They have a greater understanding of what is going on in the company. Maintaining active monitoring over processes and standard procedures aids in the rapid correction of any errors. This also aids the company in becoming proactive rather than reactive.
One of the business intelligence examples is a logistics company dealing with late deliveries, knowing where and why the delays are occurring could be quite beneficial. This kind of knowledge in their operations could help the company vastly improve its services. That’s why there is rise in the adoption of BI. While the largest BI market is North America, the fastest-growing BI market is Asia Pacific, as per Mordor Intelligence.
3. Actionable insights
The most crucial factor to consider when making any business decision is having sufficient evidence to support the conclusion. Traditional reporting does not make it as simple and convenient to obtain actionable insights as BI does. Actionable insights are measurements that allow you to take action rather than just a number that makes you feel good.
In online purchases, the percentage of clients that abandon their carts, rather than the number of transactions, is an example of an actionable measure. This indicator allows us to see where customers are leaving and allows the company to take the required steps to lower the cart abandonment rate.
Another business intelligence industry example is the problem that the pharmaceutical industry is currently facing, which is keeping track of the expiration dates of the pharmaceuticals they store. BI software can assist in reducing the danger of expired products being sold to clients unintentionally. The use of business intelligence management and sharing of product patents enables a faster approval procedure by the Medicines and Healthcare Products Regulatory Agency.
4. Improved efficiency
Having a good business intelligence system in place greatly enhances the overall efficiency of the company. This, in turn, has a favorable impact on the organization’s overall revenue. Making useful data available to various teams within the organization minimizes report request wait times and boosts the productivity of all teams within the organization. Data should not be restricted to a few privileged teams but should be available to all. This keeps everyone in the company informed and allows them to make informed decisions.
For example, telecom companies lookout for measures to improve quality assurance. After using BI, they maintain effective data processing and gain significant insights from the raw data they collect. Companies can even concentrate on predicting client requirements and developing innovative retention techniques.
5. Improved Productivity
Employee productivity can be boosted by centralizing company data. Authenticated users can utilize the cloud service to access information from anywhere on any device. One of the benefits of Business Intelligence and analytics tools is the automation of processes such as report generation and real-time updation. As a result, the personnel may focus on more productive tasks.
For example, the use of a business intelligence platform is a vital concern in the energy industry, particularly in the fossil fuel environment, such as the oil market. Many businesses utilize their business intelligence systems to analyze geological data. Businesses can utilize predictive analytics to find where the largest oil discoveries are expected to be through trend analysis and the utilization of diverse sources of information.
6. Real-time data availability
At all times, a business intelligence implementation offers real-time data. As a result, the danger of human error while preparing key data reports is reduced. The ability to access real-time data allows the company to keep aware of its health at all times. This enables the organization to make data-driven decisions whenever necessary.
Another business intelligence example is delivery organizations where they use Business Intelligence platforms to determine a variety of key aspects of their operations. Surge pricing is an example. Algorithms continuously monitor traffic conditions, journey times, driver availability, and consumer demand, adjusting pricing as demand rises and traffic circumstances change. Like, the aviation industry and hotels utilize dynamic pricing in real-time to adjust costs based on demand.
7. Better marketing efforts
A business intelligence platform allows the organization’s marketing team to design better marketing campaigns with a higher return on investment (ROI) by giving them easy access to data from current and previous campaigns. It also includes essential indicators like customer acquisition cost (CAC), cost per lead (CPL), campaign click-through rates (CTR), and a slew of other important metrics for a successful marketing campaign.
For example, a centralized business intelligence implementation and solution automates reporting operations. It also allows the broader marketing team to create tailored digital marketing efforts for specific regions. The team can react to customer behaviors and optimize marketing campaigns if they monitor and track real-time data. The end result is improved conversion rates and customer retention.
8. Competitive advantage
Another significant advantage of having a BI is competitive advantage. Business intelligence platform allows companies to see what their competitors are up to and make informed and educated judgments about their plans. Furthermore, a corporation that keeps a constant watch on its internal systems stays ahead of a company that does not.
For example, In the fashion industry, the capacity to follow and identify key trends is the most important benefit of business intelligence. When it comes to selecting a design that has the potential to become a global trend, making informed judgments is critical. Buyers and marketing specialists can use business intelligence tools and analytics to figure out what kind of audience they need to appeal to.
9. Sales insight
Most of the sales and marketing teams use Customer Relationship Management (CRM) software to keep a track of their customers. There is a lot of data that can be evaluated and applied to strategic efforts as they incorporate all customer contacts and interactions. BI systems assist businesses in a variety of ways, including discovering new clients, tracking and maintaining existing customers, and offering after-sale services.
For example, companies can leverage BI tactics to undertake sales win/loss analysis. Business intelligence can help you identify new income prospects and deliver actionable insights by analyzing your internal and external processes. For example, having a better understanding of current market trends may enable you to spot a previously unnoticed sales opportunity.
Business Intelligence Applications
Data collected by business intelligence tools might be forwarded to a data warehouse or stored in particular systems for analysis. Raw data from a variety of different source systems must be cleansed and consolidated using data quality techniques before being used in a BI application. As a result, business intelligence tools can be applied in agreement with other systems in the company’s landscape to obtain, develop, and manage data. The following are some of the most typical business intelligence applications and requirements:
- Real-time business intelligence
- Mobile business intelligence
- Software as a service (SaaS) BI
- Open source business intelligence
- Operational business intelligence
- Location intelligence
- Data visualization technology
- BI dashboards and performance scorecards
- Key performance indicators and metrics
Frequently Asked Questions
Q1. What is BI?
A. Business intelligence (BI) is a technology-driven process for assessing data and supplying actionable information to leaders, managers, and employees to help them make better business decisions.
Q2. Why is business intelligence important?
A. BI includes gathering and distribution of information to important stakeholders in the firm. BI provides a large amount of measurable data to make decisions and build new products.
Business intelligence provides the tools to metricize both what’s going on in your company and what might happen in the future.
Q3. How to use business intelligence?
A. There are numerous business intelligence solutions available today that can assist you in tracking important KPIs. Data analytics and business analytics are included in business intelligence, however, they are only used as part of the overall process. Also, data visualization is an important aspect of business intelligence since it allows you to engage with your data by visualizing it as maps or graphs.
Q4. What are some business intelligence use cases?
A. Some business intelligence use cases are:
- Dashboard development
- Data mining
- Process mining
- Business performance management
- Text mining
- Predictive analytics
- Prescriptive analytics
- Data visualization
The Future Role of Business Intelligence
As business intelligence is constantly growing in response to changing corporate needs and technological advancements, we at Appinventiv identify current trends to keep users informed about the new developments. Recognize that artificial intelligence and machine learning will continue to advance and that firms may include AI-derived technologies and insights into a larger business intelligence and analytics strategy.
Companies’ efforts to exchange data and collaborate will grow as they strive to become more data-driven. Data visualization will become even more important as teams and departments collaborate. This article is merely a primer on the subject of business intelligence and analytics. If you want to know how it can help your business, then kindly contact us. We are happy to help! 🙂
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