Business intelligence is not a reference to computerized overlords taking over and running things as they see fit. Nor is it a reference to clandestine data gathered through a series of dead drops, hidden compartments in shoes, or complicated coded messages shouted back and forth across the selling floor at your local trading company. Business intelligence is merely the modern toolkit a business uses to make intelligent decisions.
The Way Things Used to Be
In the old days, when you asked a weatherman if it was going to rain, he would look up at the clouds and say, “Yup. Probably two inches by nightfall.” These days, you ask a meteorologist, who consults complex Doppler weather radar maps, checks a half dozen meters, and runs a couple 3D data modeling queries against a set of historical weather data going back six hundred years. The answer is still “two inches by nightfall,” but the degree of accuracy is much higher. In business, you used to ask: “Can we sell any of these t-shirts?” The answer was: “Probably. Let’s put some on the racks and find out.” With business intelligence, the answer is now: “We’ll sell 70 percent of our first production run in six to eight weeks.”
Business intelligence helps you make better decisions more quickly, and in this age of global markets, end-to-end production pipelines, and constantly shifting market needs, making smarter decisions sooner is the key to success.
It Starts With Data
Modern consumers are generating data at a nearly exponential rate. Recent studies, for instance, show that American cell phone users are using more than twice the data they were a year ago, and the amount of total data is talked about in terms of “trillions” of megabytes of data. Every person now has the capability to receive the equivalent of more than 170 newspapers every day. It’s no wonder we’re all drowning in data, and modern businesses have to figure out how to sift through this data in a manner that provides insight into consumer habits and interests.
This enormous cloud is called “Big Data,” and an entire industry of data analysts, data miners, statisticians, business modelers, and competitive intelligence analysts are all elbowing each other for access to the seemingly infinite array of information floating in this cloud. In reality, all of these people are needed to gather data, store it, make it accessible, and build tools to analyze it. The synthesis of all these activities falls under the broad umbrella of “Business Intelligence.”
All the Needles in All the Haystacks
Having access to all this data is only part of the solution. You have to be able to extract useful information in a timely manner so that you can make effective business decisions. A variety of data modeling software packages allows analysts to build near real-time reports that can show consumer behavior, production pipeline efficiencies, and quantifiable returns on business investments. What used to take months (and even years) to collate into a useful pie chart can be rendered and dropped onto a presentation slide in minutes. What becomes critical with the readily available data is knowing how to ask very specific questions about very specific points in the business process.
Neither Haste nor Waste
Business managers will be able to more readily see all aspects of the business. With various modeling tools, they will be able to extrapolate changes — both minute and far-reaching — to the company’s business model without actually changing any of the existing model. Wouldn’t you rather find out if your audience will react well to a change in the color or size of your product before you actually make that change in your production pipeline? Business intelligence provides data-driven forecasting and predictive modeling that makes for more informed shifts in your business. Once you understand the underlying cycles of a product’s impact on the market, you’ll be better prepared to anticipate the next cycle.
Smarter Is Better
As more companies look to data storage and management possibilities afforded by cloud services (data retention and storage in a non-localized solution), they are also increasingly investing in tools that allow for ad-hoc querying of their available data, real-time exploration and reporting, and more robust predictive modeling. Business intelligence is how a company moves more quickly than its competition — the right approach to a new market ahead of everyone else. With the right set of tools, business intelligence can even help you find untapped markets. If you have an optimized product pipeline, you can shift your marketing and production models to fully embrace this new market.
Learn more about the Lamar University online MBA in Enterprise Resource Planning.
The Houston Chronicle: The Advantages of Business Intelligence
Advanced Performance Institute: What Is Business Intelligence (BI)?
Matillion: 6 Real-Life Examples of Successful Business Intelligence Systems