Why is Business Intelligence important for companies? 

BI & Data Science Analyst at 10 Senses

Why is Business Intelligence important is a question that has been flowing around for the past few years.  

As the Greek philosopher Heraclitus once said – the only constant is change.  

This has never been truer than nowadays.  

The world is moving fast and so are businesses to stay afloat. Nonetheless, to gain competitive advantage in the market, business decisions made should be based on valid information. 

Regardless of the industry or sector, these days, businesses have loads of data that can be leveraged to their advantage. Unfortunately, many of them still ignore this fact. 

Often the reason behind this is that they don’t realize what Business Intelligence (BI) is and why it is important. 

What is Business Intelligence (BI)? 

In brief, the term Business Intelligence encompasses technologies, practices and strategies used to collect, analyze, combine and present business information. BI assists companies in taking advantage of available data, facilitating and improving the decision-making process.   

As a result, BI solutions allow companies to use the power of technology along with business expertise to gain valuable insights from data and stay ahead of competitors.   

Without Business Intelligence tools implemented, companies deprive themselves of powerful information and may quickly stay behind the competition.  

Why is data visualization important in Business Intelligence? 

It is worth mentioning that an integral part of Business Intelligence is data visualization. In general, human minds are better at understanding pictures and visuals than numbers and plain text. 

When looking at a plain table with text labels and a lot of numbers, a human mind will struggle to interpret the data or find patterns.  

On the other hand, if the same data is shown in a graph, like a bar chart or a scatter plot, a human brain will be able to quickly understand and spot specific patterns.  

As a result, BI solutions take advantage of the power of data visualizations, making data more digestible, understandable, and easier to interact with.  

Let’s now check the key benefits of Business Intelligence that make it so important for companies these days.  

Benefits of Business Intelligence – why Business intelligence is important for companies

Gaining actionable insights 

As already mentioned, one of the key advantages of BI is getting valuable information from data to back up the decision-making process. Even if a company has a traditional, for example, spreadsheet-based reporting, it probably won’t be as efficient in delivering actionable insights as a Business Intelligence system.  

Actionable insights refer to metrics allowing businesses to take action instead of passively accepting the existence of a specific number. An effective BI system and BI tools can serve for: 

  • identifying these key organizational patterns,  
  • understanding the implications of various processes, 
  • acting accordingly.  

For example, an actionable insight could be the number of new vs. returning customers. Such a metric can give a business an idea how they should tackle their customer retention strategy or whether they should find better ways to attract new customers.  

One of other meaningful insights could be the ratio of abandoned carts. If the ratio is high, it can be a signal for a company that the purchase process is designed in a not customer-friendly way and that needs to be improved as quickly as possible. 

Getting customer insights 

Apart from actionable metrics, Business Intelligence can also equip businesses with customer data and insights, or understand customer behavior by analyzing their buying patterns and creating customer profiles.  

As a result, companies can better understand: 

  • who their main customers are,  
  • what they need,  
  • what are their preferences, 
  • how often they make purchases etc. 

Having such insights at hand, companies can customize and improve their products or services. For example, they can implement customer segmentation to better meet the expectations of their customers.

As a result, businesses can increase revenue and customer satisfaction at the same time.  

For example, with customer insights coming from effective BI tools, businesses can classify their clientele into different segments. Afterwards, they can address each of these segments with better-tailored marketing message and product offers.  

Better visibility of processes and procedures 

Companies that have implemented Business Intelligence are also in better control over their standard operating procedures and business processes. It is because they have better visibility of what’s happening in the organization. 

With active surveillance over processes and procedures, they can quickly rectify errors or operational inefficiencies and be prepared instead of being reactive. 

Therefore, instead of going through a massive number of critical data reports or financial data to assess performance, BI solutions clearly spot areas in an organization where there is room for improvement. 

Better organizational efficiency  

Apart from visibility, business-intelligent organizations can also improve their efficiency holistically. As a result, it can positively impact on overall employee productivity, revenue and organizational business health.  

By sharing meaningful data across multiple departments, businesses can significantly save time that usually is spent on: 

  • extracting data from data source,  
  • interpreting data, 
  • creating and updating reports.  

With an effective Business Intelligence system companies can reduce redundant roles and duties. It also allows employees to stay focused on their work and make knowledgeable decisions instead of spending their work time processing data or searching for data they need. 

Access to real-time data  

Real-time data availability 

Another great advantage of BI solutions is also the real-time availability of data.  

This feature not only releases decision-makers and executives from waiting until reports are compiled by various departments, but also reduces the risk of human error and outdatedness of data.  

With Business Intelligence solutions, massive amounts of data can be processed, interpreted, and shared in a timely manner. It includes updated spreadsheets, different types of charts, visual dashboards, or scheduled emails. 

As a result, an organization can easily stay informed at any time and make a data-backed business decision. 

Data alerts  

What is more, availability of real-time data enables organizations to set automatic alerts or notifications, when business metrics and certain indicators change or fall below predefined threshold.  

It allows individuals in an organization to create sophisticated workflows that: 

  • notify certain departments in an organization, 
  • create tasks or work items, 
  • trigger additional actions.  

Consequently, employees don’t have to regularly check the data as the alert system implemented in a Business Intelligence solution will notify them when needed.  

Effective marketing campaigns 

The importance of Business Intelligence can also be proven during marketing campaigns.

 A sound BI system allows sales and marketing teams to plan and implement successful marketing strategies. By equipping them with data regarding current and past campaigns and other marketing actions or market trends, teams can: 

  • track key metrics
  • improve certain aspects of campaigns,  
  • implement changes,  
  • record a better ROI (return on investment). 

What is more, Business Intelligence solutions can also serve as a source of other key metrics, such as: 

  • cost per lead (CPL),  
  • cost per click (CPC),  
  • click-through rates of the campaign (CTR), 
  • customer acquisition cost (CAC),

and other important metrics necessary for successful marketing campaigns. 

Gaining competitive advantage 

Finally, an effective BI system and BI tools can also be a great source of insights into what competition is doing and how to respond to their actions.  

Business-intelligent companies are able to make educated and informed decisions and plans for future undertakings considering their competitors’ strategies. It will allow them to always stay one step further and gain a competitive advantage. 

All in all, an effective Business Intelligence tools should be an integral part of every business these days. It provides active surveillance over internal processes and performance, which is needed to stay afloat in such a fast-paced and dynamic business environment. 

With BI solutions implemented and sound BI strategy adopted, companies can combine data collected from many sources, interpret the data, get visual insights and share with relevant stakeholders. It facilitates businesses to see the big picture, make smart data-backed decisions, and move forward in a data-driven climate with confidence. 

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