In today’s data-driven world, just about everyone is well-acquainted with the phrase business intelligence, but few understand its real meaning, or how to leverage its true potential. However, the failure to understand the value BI promises has largely arisen from the fact that business intelligence encompasses not one, but the integration of numerous applications across both software and database platforms. So then, what does business intelligence mean and how should corporate executives leverage it as a business driver?
Defining Business Intelligence
According to Gartner, business intelligence, or BI, is an umbrella term that includes the applications, infrastructure and tools, and best practices that enable access to and analysis of information to improve and optimize decisions and performance.1 In other words, business intelligence refers to those tools and capabilities which allow an organization to standardize their work-flow processes for better business decisions. Vangie Beal of Webopedia adds to the above definition when he states that BI solutions typically comprise a complete software application, including spreadsheets, dashboards, templates, data mining, reporting, query, analyses processing (OLAP), and content viewer capability.2
Leveraging BI as a Business Driver
Most companies cull information for actionable insights and implement some type of solution for the analysis, reporting and presentation of their data, but thats just the starting point. In order to truly leverage BI tools, organizations should first make sure that their BI strategy is properly aligned with their business goals and that the end-user is a priority throughout any buying, or implementation processes. In my experience, BI strategies that fail to consider the needs of the end-user often times find themselves on the losing end of the draw. For optimal results, the following guidelines should be followed:
- Identify specific examples where BI can have the greatest impact in enhancing operational efficiencies, creating a better business model or reducing costs
- Develop a methodology for measuring business impact
- Organize BI opportunities according to their technical and business acceptance risks and competitive implications
- Evaluate existing capabilities, determine what, if any, critical gaps must be filled, and identify obstacles that may challenge a successful implementation
- Devise practical guidelines consisting of platform management tasks, applications, supports, change management plans, and performance metrics
- Develop training programs to ensure that employees are knowledgeable about how to interpret key business findings, their uses and limitations, and how BI aligns with organizational goals.
In Practice, Leveraging BI capabilities to Deliver Insights
One company effectively leveraging BI, According to Mark Nichta, is Nestl USA, which utilizes tools like Interactive Edges XP3 Suite to automate and standardize its category management process, enabling them to more effectively integrate category and shopper data, and quickly [deliver] insights from that data.3 Nestl USA, leverages data analytics, reporting, and presentations tools to turn their raw data into relevant and dynamic data-driven presentations and reports. They solved the challenge of leveraging multiple data sources to create actionable data-driven insights. Furthermore, they quickly disseminate reports and presentations internally to management and decision-makers within their organizations fostering greater efficiencies within and across departments that need to access and use data, and externally to their retail partners in order to analyze business trends for new opportunities.
Bringing It All Together for Better Business Performance
A well designed Business Intelligence strategy can enable a company to measure, manage, and improve business performance. Through the use of comprehensive performance scorecards and dashboards, to sophisticated analytics that help identify key trends and predict their business impact, BI is an essential tool for today’s manager. BI can also assist in cost reductions in that it is an effective mechanism for aggregating information for easier analysis, allowing managers to examine costs from many perspectives and identify key contributors for targeted reduction.Ultimately BI can give a company the wherewithal to create a more effective business model which can accelerate long-term sustainable growth, obtain a clear competitive advantage, and increase profits.
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3Quote by Mark Nichta, Director of Sales Information Strategy, Nestlé USA