Data provides more reliable insight into organisational outcomes than intuition alone can. That’s why most managers build dashboards to monitor their sales pipeline, revenue generated, and churn rates: to get real-time updates on their team’s overall progress. While those are important metrics, reliance on just high-level summaries may cause leaders to miss out on crucial opportunities to grow their business smarter, says Danny Wong, founder of Blank Label.
To bridge the knowledge gap between what executives see and what an in-depth analysis of the data reveals, companies increasingly leverage business intelligence (BI) software to help orient their next steps. Business intelligence considers the impact and influence certain actions have on various organisational outcomes and surfaces the best recommendations your team can take to drive key metrics and long-term success.
In this article, we explore what business intelligence is, ways in which it can benefit your company, and how to select the best BI tool for your organisation.
How to define business intelligence
One way to define business intelligence is to say it’s an automated and smart process that leverages technology to analyse the relationships between different company metrics and their underlying causes. This helps users identify organisational inefficiencies, opportunities for improvement, and areas for sustained growth. BI makes it easier to turn information that would otherwise be abstract into tactical business strategies. In order to accomplish this, business intelligence integrates data from internal and external sources to highlight these hidden correlations.
Often, organisations use business intelligence software to create real-time dashboards that summarise their team’s overall performance, along with segmented reports that describe past and current trends in order to predict future behaviour. Advanced BI solutions also incorporate artificial intelligence (AI) to help you get a thorough understanding of the effects and implications of certain actions. The conclusions developed from BI systems help to power better-informed decision making, which can facilitate improvements in productivity and faster company growth.
Why your organisation needs business intelligence
Business intelligence can give your organisation the edge it needs to outperform the competition. While basic data-driven insights are good, a more in-depth look at the relationships between process variables can optimise the way you do business.
Nine benefits business intelligence can offer your organisation include:
- Anticipate potential problems. The right business intelligence software recognises when new actions and inputs may negatively impact long-term outcomes and alerts users about the potential pitfalls.
- Create performance benchmarks. Using historical data and competitor analysis, business intelligence tools can establish the minimum goals you need to reach for this month, this quarter, and this year, while accounting for seasonal trends, industry growth, and more.
- Determine the effectiveness of previous and ongoing initiatives. A quantified understanding of campaign-level return on investment (ROI) makes it easier for managers to prioritise efforts that drive the biggest organisational impact.
- Develop forecasts for future sales. This can inform cash flow management, hiring decisions, and inventory replenishment, among other things.
- Find contextual answers. While the data can point to the results of a campaign, the cause may sometimes be unclear. BI tools can help you uncover the underlying reasons why something happened so you can avoid it — or exploit it.
- Identify sales inefficiencies and opportunities. Business intelligence can highlight unseen bottlenecks in the sales process for you to address, as well as growth opportunities to upsell clients or close more deals.
- Merge related data points. When you house all your data in one place, you save time. You no longer have to toggle between different dashboards for information and can get a consolidated look at your team’s overall performance.
- Segment your audiences and customer profiles. This helps you determine which audiences are profit drivers and which client relationships are costly to maintain.
- Surface cost-cutting measures. While BI insights can direct company leaders to target new growth opportunities, business intelligence can identify ways to save money, too. Business intelligence can compare employee performance against sales, software licenses against productivity increases, and purchasing needs against seasonal pricing to give managers a quantified sense of relative ROI.
The author is Danny Wong, founder of Blank Label.
About the author
Danny Wong is an entrepreneur, marketer and writer. He is the co-founder of Blank Label, an award-winning luxury menswear company, and leads marketing for Receiptful, a platform to supercharge all customer interactions for eCommerce stores, and Tenfold, a seamless click-to-dial solution for high-performance sales teams.
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