What is business intelligence?
Business intelligence is an umbrella term that refers to data-driven methods and processes for improving business understanding and decision-making.
Business Intelligence (BI) can be seen as a combination of business analysis, data production, data visualisation and the data infrastructure itself. In 1989, Gartner defined BI as “an umbrella term for concepts and methods with which to improve business decision-making by using fact-based support systems.”
A challenge is that "facts" increasingly consist of data distributed between many different systems and files.
The possibilities of BI increase with greater integration of different business systems, such as CRM, HR and ERP systems. BI tools can then provide many opportunities to analyse data in different ways to meet specific needs.
The data produced is often visualised and role-adapted in the BI tool – making it easier to understand and analyse, and supporting data-driven decision-making.
BUSINESS INTELLIGENCE SUPPORTS DECISION-MAKING
BI insights enable decisions that take a business in the right direction, which is why BI is often referred to as "decision support".
Greater amounts of data bring increased opportunities opportunities – but only if the data is used. A decision support system enables you to make well-informed decisions through streamlined information processing and efficient reporting and analysis.
A good BI tool creates synergies by capturing and unifying data from multiple sources, generating more opportunities than when each respective system works in isolation.
It can also eliminate many of the manual tasks relating to data collection and quality assurance. This results in higher-quality and more relevant decision-support data – available to the right person at the right time, in the right form.
The issue of the availability of the decision support data is closely linked with the opportunities of creating and distributing internal and external reports, which is a time-consuming manual task for many businesses.
When evaluating BI tools, report functionality should therefore be considered as important as visualisation – both make a vital contribution to effectiveness and well-informed decisions.
WHY USE A BI tool?
- Decrease dependency on key personnel.
- Improve data quality
- Make better decisions.
- Measure results and target fulfilment.
- Ensure a common view of reality across the organisation.
- Save time through automation.
- Identify strengths, weaknesses and potential problems.
- Boost operational efficiency.
- Identify bottlenecks.
- Eliminate unnecessary costs
- Reduce risks.
- Streamline processes and enable new forms of collaboration.
- Identify potential new revenue streams and reveal opportunities within existing ones.
- Discover new competitive advantages.
In conclusion, business intelligence systems eliminate significant amounts of manual handling and facilitate faster and better decisions. The results you will achieve depend on how well your system meets your needs, the quality of the analysis, and how well follow-up is handled.
BUSINESS INTELLIGENCE AND KPIS
Concepts such as metrics and KPIs are important within business intelligence, where they are used to monitor and evaluate how well the business is performing towards achieving its goals. KPIs can be set, for example, to measure profitability, business activities and financial performance.
Metrics and KPIs help to ensure that business operations share the same view of reality, work towards common goals and avoid conflicting priorities.
A BI tool can work with metrics and KPIs differently, depending on how the organisation has chosen to implement the tool. It is important to agree on which KPIs to use, how they should be defined, and which data should be used to calculate them. A common pitfall is using too many KPIs, which can make it difficult for an organisation to focus on the most important metrics.
Ideally, a BI tool should be able to combine different data points so as to create KPIs that are as relevant as possible to the business. An example from the real estate sector is that data relating to revenue and the number of leased square metres can be found as a measure in different systems. If the data points are combined, then income per square metre (rental value) can be monitored and analysed by the BI tool.
Real estate company Stena Fastigheter uses BI tools to gain a good overview of its property portfolio, and to analyse data and make it available for reporting and analysis work. The tools ensure quality of data and support a common approach to work, helping the company to achieve its overall objectives.
Additional gains for the company include an increased sense of responsibility and higher levels of engagement and participation in the organisation.Book a demo