What is business intelligence, and why do companies need it?
Each company collects critical data regarding customer preferences and changing market trends. Then, business intelligence software analyzes these data points to forecast how the industry will develop five years down the line. This process helps to brainstorm effective marketing strategies to grab customers’ attention and expand business operations.
Moreover, every industry has its benefits and drawbacks. Sometimes companies fail to understand the market momentum. At other times, they find it challenging to collect crucial information that could help them recruit the right kind of talent or reduce operational expenses. This is where business intelligence plays a vital role.
Business intelligence (BI) is an umbrella term consisting of various tools and techniques that help:
- Generate accurate reports.
- Get the real-time status of the market.
- Monitor Key Performance Indicators (KPIs).
- Observe employee performance and send detailed reports to managers.
- Analyze market trends and monitor what competitors are doing.
- Optimize your services according to the market needs.
How does Business Intelligence work?
Business departments in big companies employ disparate systems for storing critical data. The lack of crucial real-time information restricts them from working as a cohesive force. On the other hand, BI-enabled ERP software collects vital information from several data sources and acts as a single source of truth. The best part is that it displays the data on a dashboard accessible to all authorized business stakeholders, including frontline executives, C-suite managers, vendors, suppliers, and distributors. In short, BI bridges the gap between various business departments, such as marketing & sales, finance & accounting, inventory & warehouse, and provides the ability to:
- Integrate disparate data systems.
- Create visually appealing reports.
- Allows managers to predict future market positions based on factual data instead of making educated guesses.
Also, BI software is user-friendly, allowing employees with a non-technical background to instantly access accurate reports without any handholding from the IT department.
Why is Business Intelligence critical for your business?
We live in a data-driven world. Today, everyone is connected to the internet through a mobile phone, tablet, PC, or laptop. Customers are also active on social media platforms, where they share reviews and feedback on the products and services they use.
BI tools monitor what customers are sharing and collect valuable data. This data helps managers to create reports, brainstorm the best quality strategies to attract customer attention, and modify existing prototypes.
The following points explain how BI helps companies:
1) BI provides valuable business insights.
BI allows businesses to monitor employee performance, revenues, profits, operational expenses, market trends, and changing customer preferences over a period. It also provides a visual representation of how fast KPIs — both individual and team — have been achieved and how many are yet to be finished.
2) BI provides the best quality data.
Companies that outperform and become market leaders have tight control over data. BI tools reduce/eliminate data duplication, data redundancy, and data inaccuracies that restrict companies from getting a comprehensive picture of their target customers. With high-quality data from disparate sources, companies can offer tailored solutions to their target segment and build evergreen and strong customer relations.
3) BI improves operational efficiency.
Businesses, especially SMEs, shy away from implementing BI-enabled ERP software due to various reasons. But they fail to realize that it decreases the operational efficiency of their company in the long run. It’s because employees have to perform trivial functions like collecting customer details and creating reports. On the other hand, BI-enabled ERP software automates these functions that allow employees to focus on mission-critical tasks.
4) BI software helps increase business revenue.
Each business function is directed towards increasing business revenue. Operations that don’t generate revenue, either directly or indirectly, are obsolete and should be shut down. BI tools allow companies to ask better questions to their customers that help them understand their needs, wants, desires, and ambitions. It also assists in getting a 360-degree view of what competitors are doing and tracks government policies and norms. All of this together helps increase business revenue, both in the short and long run.
The ability to collect and analyze data and reveal hidden insights from it has multiple benefits. It allows companies to increase their revenues, reduce operational expenses, boost profits, and create tailored solutions for different customers. BI-enabled ERP software provides these advantages. Moreover, it also has a robust forecasting ability that helps companies align their resources —money, employees, time, and effort — to manufacture and market products with a higher sales potential.
Nishant Joshi likes to read and write on technologies that form the bedrock of modern-day and age like ERP, CRM, Web Apps, machine learning, data science, AI, and robotics. In addition, his expertise in content marketing has helped grow countless business opportunities. Nishant works for Sage Software Solutions Pvt. Ltd., a leading provider of Business Management Software in India to small and mid-sized businesses.
You can learn more about him on Linkedin