A beginner’s guide to everything you need to know about
Not knowing where you are in relation to your goals, how long it will take you to get to the finish line, or how certain decisions might impact downstream events are pervasive business problems. Unfortunately, many teams are flying blind. Without a single source of truth and a complete picture of the company’s performance and inner-workings of every team, it’s easy to rely instead on gut feelings that can lead organizations down the wrong path.
The good news is that organizations no longer have to work in the dark. Modern business intelligence (BI) shines a light on past and current performance, calling attention to bottlenecks and unearthing risks while highlighting opportunities to delight customers, innovate products and services, and boost revenue growth. But what exactly is business intelligence, and how does it work?
In this piece, we’ll define business intelligence, explain how it works in practice, highlight its benefits, and demonstrate why it’s a crucial aspect of any company’s data strategy.
Business intelligence, or BI, is the use of technology to analyze and transform data into actionable insights. An organization’s data comes from various internal and external sources, and increasingly includes both proprietary and third party sources. The sheer volume of this data, which continues to grow exponentially, makes it difficult to interpret, causing businesses to struggle to uncover patterns, trends, or insights within their data. But with the help of BI tools, organizations get a holistic picture of their performance 一 for the company, departments, internal teams, and individual initiatives.
BI software also presents data into more digestible formats, like charts, dashboards, heatmaps, summaries, or reports. These accessible data visualizations bring to the surface inefficiencies and opportunities that companies can address in real time.
Business intelligence can be tough to conceptualize in the
abstract, so let’s take a look at how it’s used day-to-day.
Marketing teams often need to leverage business intelligence to understand how campaigns are performing. Say your marketing team is launching a weekly newsletter. Before the first newsletter goes out, they’ll set goals for open, response, click, bounce, and unsubscribe rates. Business intelligence allows them to track these metrics in real time and experiment with different strategies to improve their KPIs week over week.
Sales teams use business intelligence, too. It gives sales leadership insight into the number of deals in the pipeline, number of booked meetings, time spent in each opportunity stage, conversion rates, and more. BI tools can also help sales managers compare KPIs to other quarters, enabling them to double down on areas where they're over-performing or course-correct if their numbers aren’t looking good midway through a quarter.
However, BI isn’t just for go-to-market teams. Operations teams use business intelligence to oversee how efficiently (or not-so-efficiently) processes run. They might use BI tools to forecast demand and then closely track cycle time, incident response time, and downtime rates to ensure they meet production deadlines. If any of these metrics look off during the project, they can investigate and make adjustments before it’s too late.
People often mistake business intelligence for data analytics and vice versa. However, the two aren’t the same. At a high level, business intelligence is descriptive rather than predictive. BI communicates what is happening now and what happened in the past. Equipped with business intelligence, business users can make data-driven decisions in the moment.
Data analytics is the process of preparing and making data ready for analysis and includes everything from data mining, data cleansing, data transformation, governance and more. Data analytics applies to all domains, and is performed by a data analyst. Business analytics is a subset of data analytics, and refers specifically to applying analytics in a business context to understand how different decisions or actions might impact various elements of the organization. Business analysts typically perform this work. Business analytics teams study company data to forecast trends and prescribe certain activities to achieve desired outcomes. Business analytics often requires deep partnership between analysts and domain experts to deliver data driven solutions built to address specific business challenges.
As you might expect, there are many benefits to using business intelligence. At its core, business intelligence empowers companies to:
Increasing product or service adoption is difficult to do when you’re just guessing how customers will behave and what they’ll think. BI can collate satisfaction and behavior data to show what features customers like the most, where they spend the most time in your product, and what else they feel can be improved about your products and services. With this information at your fingertips, you have the power to make your products and services far more valuable to customers.
Even small optimizations to business processes can have a significant impact on your bottom line by allowing you to use time and resources more efficiently. Business intelligence can uncover duplicative or unnecessarily complicated processes, where processes are breaking down, reasons for those breakdowns, and opportunities to streamline to create more efficiency.
Most companies track a customer NPS score, which measures a customer's willingness to recommend a company to others, but what does NPS tell them about how a customer has engaged already, the motivations behind that customer’s willingness or unwillingness to recommend them, or what the business might need to change to improve the score? The answer: not much.
That’s where BI comes into play. Business intelligence gives customer service reps a deeper understanding of what customers are looking for and how they view the company. BI can reveal what products customers have purchased in the past, whether they’ve talked to customer service before and when, what recent web pages they’ve browsed, and even their sentiment in reviews or social media engagement.
Drawing insights from siloed data can cause a great deal of thrash and disagreement within your organization. . The beauty of modern business intelligence is that it creates a single source of truth for you to explore and analyze all of your data holistically. It paints a complete picture of what is happening in your business and why, and keeps everyone on the same page. In this way, business intelligence brings new initiatives and ideas to light. When new strategies are introduced, BI can also measure their effectiveness.
Knowing what is happening and what has happened in your organization at any given point in time makes you much more prepared to make game-time decisions. Business intelligence is necessary to remain informed while making decisions that impact your business. With KPIs in mind, you know when to push teams harder and when strategies are working or not.
Operational efficiency goes hand in hand with business processes. Slow, inefficient processes take a toll on your operations, which can have waterfall effects on your customer experience and employee satisfaction. BI catches operational inefficiencies before they become big problems for you and everyone who interacts with your business.
Combining internal and external data can give you a better sense of how your industry or market is evolving, helping you formulate plans or responses to address these changes. For example, merging third-party data with real-time production data during the pandemic helped companies navigate demand, supply chain, and delivery issues. Paying close attention to sweeping or even subtle market changes or customer behaviors can give companies insight into gaining a competitive advantage.
When you implement a new strategy, you don’t hope that your original plan was good enough and wait for the results to come in months or quarters later. Business intelligence enables you to respond to feedback, develop your plan accordingly, and act on more informed strategies. BI also allows you to understand how the entirety of your organization, not just one department, is affected by these strategies.
Business intelligence is the underlying foundation of a solid data analytics strategy, no matter what industry your company serves. Overall, BI metrics inform the company roadmap, identifying weak spots or opportunities that could be explored further via data analytics. For example, in financial organizations, BI can supply immediate answers regarding deposits, transactions, and loan data. With further data analysis, these insights can contribute to personalized customer experiences, upsell opportunities, and operations improvements. Using BI as a baseline can optimize inventory planning in retail, patient outcomes in healthcare, logistics in manufacturing, and more.
But establishing a world-class business intelligence strategy doesn’t happen overnight. You need the right mixture of technology, people, and processes to make it stick. Your BI solution needs to fulfill your specific use cases, your employees need to be data literate, and data-driven insights must be built into every decision. Although there’s often a significant amount of change management and upskilling associated with a new business intelligence strategy, the long-term benefits far outweigh any initial obstacles.
When it comes to establishing a business intelligence strategy, most organizations struggle to see the forest for the trees, severely limiting their potential. Business intelligence gives organizations a birds-eye view of their company while allowing them to drill down into metrics that matter most. Ultimately, business intelligence serves as a guiding light for the broader company strategy, surfacing new trends to capitalize on and uncovering areas for improvement.
But as more organizations lean into BI technology, it’s important to choose a solution that’s built for the future. The need for data visualization, collaboration, and data sharing will only increase, meaning you need a BI tool that anyone can use, regardless of technical skills, to turn insights into action一wherever decisions are made. That’s where ThoughtSpot shines.
With an intuitive search-based UI and pre-built SpotApps for your favorite business tools, ThoughtSpot’s Live Analytics services seamlessly fit into every employee’s workflow. And with robust AI capabilities, our users aren’t just creating, consuming, and sharing data一they’re finding otherwise hidden insights that drive the company forward. They are empowered to answer any question with data, discovering business-critical insights and accelerating action along the way. To see for yourself, sign up for a free trial of ThoughtSpot today.
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