Business intelligence is a general term that refers to the collection, analysis, and use of data in business to make decisions.
Business Intelligence Guides Data-Based Decisions
Business intelligence uses computer software to analyze internal business data and external data to produce reports that are easily understood by and useful to the end users – primarily the employees of the business. The power of today’s analytical software makes the use of business intelligence techniques an ever-stronger tool for businesses.
Historical and current data are often used to determine a business’ position in the market, predict future growth, and make operational business decisions.
TechTarget describes some of the many benefits of using business intelligence techniques as:
- improving decision making
- increasing efficiency
- gaining competitive advantages
- identifying business problems
Business intelligence often combines historical data with more recent and even incoming real-time data, such as from point-of-sale devices, to provide robust and continuous analysis.
Data mining is also used in business intelligence to look for relationships among variables that could aid in managing the enterprise.
Structure of a Business Intelligence Team
Business intelligence teams often consist of a number of members, including a team manager, designers or developers, data managers, and, of course, data or business analysts. End users of the data analytics are also generally included on the team so that the process is worthwhile and user-friendly.
Larger business intelligence teams may be broken into smaller teams that focus on specific aspects of data collection and analysis.
Challenges Facing Business Intelligence Teams
One of the biggest pitfalls in implementing business intelligence is not having proper and accurate data to analyze.
Garbage in, garbage out. A business intelligence team may design a very well-structured business intelligence plan, but if the data that are collected are not good, then the plan is useless. That is, if garbage data are put into the analytic systems, then intelligence coming out will be garbage.
How data are collected must be part of the overall business intelligence design. Technology must be employed properly, and employees, contractors, and others who are involved with the data that the business needs must be trained on proper collection and recording procedures. End users may also need to be trained on how to read the output of the data analysis process, including charts, tables, and graphs.
Planning for Accuracy
If a business does not ensure that the data they collect are accurate, then the decisions that are made based on the data will, most likely, be faulty. Thus, the business intelligence process must include checks for accuracy and should continually monitor data collection and look to improve data collection processes.
When new systems are put into place, this is especially important. Staff must be thoroughly trained on the new systems and data collection monitored to be sure the data are good.
The business intelligence plan must also allow for growth and change.
That is, business intelligence is not a static design process but an ever-changing one that is flexible in the data that are used and the information and reports that are produced. The reports themselves must be flexible to allow for different types for different purposes. Not all data analytics can produce the same types of reports and graphs, such as pie charts and line graphs.
Using the Right Software
Choosing the right data analytics software is an important decision for a business. The business intelligence team must evaluate not only the types of analytics the software can produce but also the types of output it can produce.
The team must also consider whether or not the software is compatible with the data collection methods and if it is not, if it is worthwhile to change data collection methods so that the software can be used.
There are many variables, including cost, level of support, implementation time and cost, and amount of staff training that is needed, that must be thoroughly evaluated as part of the business intelligence process.
This is a very time-consuming process, so a business must determine its level of commitment in terms of time and resources before it embarks on full business intelligence implementation.