Competition in the marketplace for organizations, small and large, has become faster, smarter and global. The new normal is the challenge in maintaining a competitive advantage in an environment, where budgets are regularly squeezed. Business Intelligence was supposed to help solve this problem but has yet to deliver on this promise fully.
Gartner’s definition of business intelligence is that it “includes the applications, infrastructure and tools, and best practices that enable access to and analysis of information to improve and optimize decisions and performance”. In simple words, BI helps make better decisions that produce real, measurable results for a business.
“Any fool can make things bigger, more complex, and more violent.
It takes a touch of genius-and a lot of courage-to move in the opposite direction.”
– Albert Einstein
CIO Magazine reported in 2013, “IT leaders agreed that business intelligence could solve the challenge of maintaining business-as-usual operations and creating new initiatives when money is tight. Enterprises must be able to make smarter decisions faster to remain competitive”.
Dan Sommer, principal research analyst at Gartner says, “We are heading towards a world of analytics everywhere”. Gartner predicts analytics will reach 50 percent of potential users by 2014 and 75 percent by 2020.
Organizations can leverage BI for various purposes including:
- Risk management
- Fraud protection
- Customer retention and acquisition
- Sales forecasting
- Demand planning
Data, data everywhere
People and organizations experience information overload every day. Most people believe we are living in an information glut. Our data tends to be scattered across various sources and storage mediums making it difficult to access and analyze. Most organizations are not doing a good job of leveraging these diverse sources to find the value that resides within their data.
The responsibility of structuring data for consumption lies with the technical professionals who will consolidate information from different sources into one place. This will allow business professionals to use reporting and analysis tools to make better decisions from that data.
Business analysts, a third group, talk to business users to learn about their needs from a business analysis and reporting perspective. They identify which type of data and the structure of the data to be collected. They communicate this to technical professionals, who use technology to collect the information. The resulting BI system is one that can adapt in changing customer needs and businesses environments to remain responsive and competitive.
A major challenge for companies to benefit from business intelligence about customers is to consolidate information. Too often, organizations believe that consolidating all enterprise data is the goal. This is both impractical and not feasible. The important point is for relevant interest groups in an organization to work together to identify the what, where, how and why in terms of collecting the right information sources.
The term, enrichment of data is a more recent development that improves the value of integrated data. Enrichment data refers to “processes used to enhance, refine or otherwise improve raw data.” In other words, when enterprises don’t have all the data they need about customers, they enrich it through various techniques.
- Some ways an organization can enrich data include:
- Overlaying of geo demographic and census data
- Extrapolating new data through fuzzy logic algorithms
- Introducing predefined segmentation of data.
For example, data segmentation could be matched to your existing data through postal code, customer age, gender, and income level.
By purchasing pre-defined segmentation groups, like data from the Canadian company Getclarity.ca, you can effectively make inferences to marketing categories. Meaningful inferences includes customer groups like “soccer mom”, “hockey dad”, or “executive on the move”. Segmentation databases are simple and cost effective and give existing data additional meaning and usefulness.
Simple and Automated
Successful BI projects are about easy and simple access to data by users. They require easy-to-use dashboards for clear navigation. They require automation to create the datasets that support effective reporting. Tools to achieve this are no longer complicated or expensive. Large vendors like Microsoft, Oracle and IBM as well as smaller ones offer excellent tools.
Microsoft recently released Power BI, which is a cloud analytics service included with its Office 365 subscriptions. Power BI is simple to use and can consolidates data from multiple sources. Its results can be easily shared and viewed on the web, desktop, or mobile devices without having programming skills. A simple and clear example of a dashboard using Microsoft’s Power BI is below.
To compete today and in the future, organizations must become faster and smarter by fostering a business intelligence (BI) culture. This long-term outlook requires committing resources to collection, storage and competency to make data-driven decisions.
A successful BI culture requires users, analysts and technical people to talk to each other on a regular basis to understand what fundamentally drives the organization forward. Effective brainstorming and record keeping agreed upon by various parties is necessary to achieve well- defined goals. If this goal can be achieved, the sky is the limit for an organization’s ability to compete.