In an increasingly dynamic, volatile, uncertain, and complex job market, Business Intelligence can be fundamental to business stability. In reality, stability may not be the right word.
The way forward is to accept instability and work to build an adaptable company. It needs to respond with agility and intelligence to the challenges that arise and without Business Intelligence, this is not possible.
Unless you prefer intuition and trial and error – they have validity, of course, but an approach that relies solely on this is irresponsible. Because with so much globalization, competition, and rapid advancement in technology, it is not recommended to work with a high margin of error.
In this article, we will explain what Business Intelligence is and how it can contribute to increasing a company’s chances of success.
See the topics we will cover:
- What is Business Intelligence (BI) or business intelligence?
- The origin of Business Intelligence
- How does Business Intelligence (BI) work?
- BI traditional x BI modern
- How important is Business Intelligence for companies?
- What does a Business Intelligence professional do?
- Why should you work with Business Intelligence in your company?
- Business Intelligence (BI) can be implemented in which sectors of an organization?
- Tips for successfully implementing Business Intelligence
- BI concepts in decision making in business management
- BI and risk management
- Business Intelligence Principles
- Business Intelligence Tools
- The relationship between Business Intelligence and Big Data
- BI and customized dashboards
- The main trends in Business Intelligence (BI)
- Success stories using BI
- Market intelligence course: what are my possibilities?
What Is Business Intelligence?
Business Intelligence (BI) is a process that helps a manager make decisions. It is based on the collection of raw data that will be transformed into useful information to guide companies’ actions.
An administrator from older generations may be wondering what’s new. It’s a good question, because, although the use of this term is recent in different countries, this does not mean that, in previous times, entrepreneurs were groping in the dark to make decisions.
They had their means of collecting useful information for the area of activity. Nothing, however, compares to what exists today Technology advances by leaps and bounds every week, and the consequence of this is that the options for consultation tools and information sources are much wider. And the amount of data available is also absurdly greater today. To give you an idea, in 2018, around 90% of internet content had been created since 2016, according to the IBM Marketing Cloud study.
This is Big Data, a concept you will need to read about.
First, you need to better understand the importance of Business Intelligence.
The Origin Of Business Intelligence
The concept of Business Intelligence (BI) predates the Internet era: the first reference to the term dates back to 1865. At the time, author Richard Millar Devens described, in the book “ Cyclopaedia of Commercial and Business Anecdotes ”, how a banker compiled market information to profit and get ahead of his competitors.
Since then, the use of market information, consumer behavior, and competitor analysis has evolved as new technologies emerge. An important milestone in the use of intelligence in business was the emergence of ERP (Enterprise Resource Planning), which began to integrate information from different sectors of companies.
Before these interconnected systems, there was little communication between departments, and reports were made manually, which took time and left room for errors and non-conformities.
In 1989, analyst Howard Dresner defined BI as a set of technological tools capable of collecting, storing, and processing diverse data, transforming them into useful information. With the popularization of the internet and social networks, the concept of Big Data emerged, a gigantic pile of structured and unstructured global data, coming from the “footprints” we leave on the web.
We can compare big data to a “gold mine” that only increases in size as more and more data is produced uninterruptedly.
In this context, BI is the set of tools that a company can use to dig through big data for the right information.
The objective is the same as that of the banker mentioned by Richard Millar Devens in 1865. The difference is that, currently, there is much more data available for those who know how to use it intelligently.
How Does Business Intelligence Work?
Through various technological tools, BI can extract, compile, process, and transform disconnected information into user-friendly reports.
This work, carried out with the indispensable help of artificial intelligence, takes place automatically and in real-time. After all, to be useful to managers in making good decisions, information needs to be reliable and reach the right person at the right time.
Traditional Business Intelligence X Modern Business Intelligence
We saw that Business Intelligence, although it has become popular and even more relevant in the digital age, existed even before the internet.
Over time, BI incorporated new functionalities and gained scale and popularity.
In this context, we can characterize traditional BI as:
- Predefined search and analysis parameters
- Only structured data is considered
- Print-oriented reports
- Information shared after the fact
- Expensive and complex systems.
The characteristics of modern BI, on the other hand, are:
- Research that allows free and dynamic exploration of data
- Structured, semi-structured, and unstructured data are taken into account
- Interactive and dynamic reports
- Information shared in real-time
- Simplified and accessible systems, including for small and medium-sized companies.
Another detail worth highlighting is the integration of modern BI, also called BI 2.0, with social networks.
In addition to the organization’s internal information history coming, for example, from the Data Warehouse, external data are true treasures.
Through social networks, companies that use good BI tools are able to map the profile of customers and potential customers, their habits, preferences, and create business strategies.
How Important Is Business Intelligence For Companies?
As stated above, Business Intelligence processes are used to assist in decision-making.
In this way, the company reduces the risks to which it is exposed and those who use Business Intelligence to support the decisions they make are always one step ahead of those who don’t. The result of data collection and analysis is the possibility of acting more strategically, as each movement will have a reason for existing.
The insights obtained from BI processes act as a beacon to guide the company’s actions. This approach is important both in a macro scenario – when positioning the company in the market or designing a new product, for example – and in a micro scenario – such as in the content of a publication on a social network.
In the end, in addition to the lower risk, the manager will see a higher return on investment (ROI) , as he will bet less – instead, he will take accurate shots.
The reduction in costs will also happen because it will have more agility, optimized processes and will waste less time on fruitless analyses.
And, if there is a mistake, measuring performance and results, another premise of Business Intelligence, will make it easier to correct the direction of the project in question.
What Does A Business Intelligence Professional Do?
Firstly, it is worth highlighting that knowledge of Business Intelligence practices is useful for professionals in various areas.
You can be a Human Resources analyst, engineer, or financial manager. Whichever direction you look, there will be data to inform your decision-making. In certain contexts, however, having a professional focused on Business Intelligence allows for several possibilities.
Among its functions are the following:
Assess The Company’s Needs
The professional needs to have a full understanding of the company’s purpose, values, and mission.
These are the starting points for your strategic action.
The Business Intelligence professional needs to know the data sources to extract the information necessary for a specific job.
This goes far beyond Google searches.
There are a series of technologies and methods to be used to carry out this collection.
The whirlwind of information collected needs to be filtered and organized so that it can be used in decision-making.
The next step is to analyze all the data collected to achieve the proposed objective.
One of the possible uses of the information collected is market trend research.
It can be done based on consumer behavior analysis, for example.
The BI professional can also outline possible scenarios to support resource investments.
Analyzing competitor numbers and actions is called benchmarking.
It has nothing to do with plagiarism, but rather with knowledge of the strengths and weaknesses of other companies in the area, which is essential for finding the best positioning in the market.
Saying that “prevention is better than cure” is a cliché, but it is still true.
The BI professional can help recognize patterns that will influence future results.
Monitoring internal data is just as important as collecting external data.
Measuring results through Key Performance Indicators ( KPIs ) is essential to know whether the work is being carried out well and whether changes or adaptations need to be made.
Why Should You Work With Business Intelligence In Your Company?
As the name itself informs, Business Intelligence practices add intelligence to the business: knowing how to translate available information into answers.
The professional who masters BI is able to see facts that others cannot. Firstly, because you master certain technologies and have knowledge in the area of data science.
Some people with a more creative profile may turn their noses up at this, but that is where the basis for market intelligence lies. It is necessary to know how to recognize patterns and build graphs that transform raw numbers into relevant information.
And that’s only half the work.
It is necessary to give this collected information a function: how does it fit into the company’s reality? How can the data obtained help solve a problem or indicate a path? To do this, the professional needs to have a systemic view and understand at least a little about each process that occurs in the company.
And use this ability to see bottlenecks and opportunities.
In short, you must work with Business Intelligence to have the ability to see beyond the obvious.
Business Intelligence Can Be Implemented In Which Sectors Of An Organization?
The information provided by BI can support the formatting of both strategic, tactical, or operational planning.
Among the sectors that can benefit from Business Intelligence, the following stand out:
In the sales sector, BI can help the company discover which products are selling the most, how the customer makes purchases, what is the average negotiation time, among other information.
From the reports, the manager has enough information to think about strategies to improve the commercial process, whether by correcting bottlenecks or proposing more efficient routines.
Through BI in customer service, your company has access to relevant information, such as average service time (AMR), abandonment rate and average waiting time (TME), and first contact resolution rate (FCR ) .
You can also find out the best time to call the customer (BTC – Best Time to Call) or find out what rating your customers give your company ( NPS – Net Promoter Score ).
Marketing, especially digital, uses a lot of BI in its strategies, from analyzing behavioral patterns to personalized campaigns.
The traces that customers leave on the web are valuable data.
The idea is to discover, by analyzing your habits, what your needs are and offer the right product at the right time.
Cash flow, average ticket, revenue, profit margin, sale, estimate, among other economic and financial indicators, can be produced in real-time by BI.
It is possible to compare results from different periods, discover the average payment and receipt time, as well as internal rate of return, and ROI, among others.
With financial BI, manual spreadsheets give way to interactive graphs, formatted in real-time and automatically, with much less margin for error.
Some companies cannot work without a minimum stock, It’s part of the nature of the business. But poorly managed inventory results in losses.
Through BI, the manager has real-time information about product turnover, sales performance, loss control, purchasing planning, and much more.
Granting credit, whether in a loan or installment sale, is a negotiation that involves risks.
No matter how careful the analysis is, there is always the possibility that the contractor will not honor its commitments.
BI helps the credit analyst to be more assertive and efficient in the assessment.
By crossing different types of customer historical data, it is possible to discover whether they are likely to be a good payer or not.
Depending on the score, it is possible to personalize, with the help of predictive analysis, the size of the credit and interest rates.
Tips For Successfully Implementing Business Intelligence
Establishing a BI strategy within an organization goes beyond implementing advanced technological processes.
Business Intelligence instruments must be part of results-oriented planning.
After all, there is little point in having an excellent data collection and processing tool that is poorly managed or underused.
Below, check out some tips on how to successfully implement BI in your company:
Keep Your Team Engaged
Don’t limit Business Intelligence to the IT department: democratize the tool and give access to managers from other areas.
If we are talking about real-time information, it is not smart to expect IT to generate reports on what is happening in different sectors of the company and distribute it to those responsible.
Furthermore, employees can interpret information in different ways, producing a confluence of ideas capable of generating new insights and boosting business.
Choose A Complete Tool
Choosing the best tool requires market research and a cost-benefit analysis.
When analyzing a BI proposal, you must consider aspects such as: data integration, security, input of insights, interface and compatibility with mobile devices.
Set Ideal KPIs
A BI tool can generate hundreds of reports on a multitude of processes.
But to provide the right information, you must keep in mind that quality is more important than quantity.
Therefore, when implementing Business Intelligence in your company, define the main KPIs ( Key Performance Indicators ) and focus on them.
Establish Your Company’s Objectives
This is the first step.
The objective may be to increase sales, reduce costs and expenses or improve service.
We saw in previous topics that BI can be applied to different sectors of an organization.
BI Concepts In Decision-Making In Business Management
And how are Business Intelligence concepts applied in practice in decision-making in a company? There is no cake recipe, as each company has a set of processes defined and shaped according to the leaders’ thinking, always taking into account the organization’s tradition, experiences, and purpose.
Research based on the concept of business intelligence can lead to the creation of new products, HR hiring policies, and communication plans for social networks, among others.
The possibilities are countless.
But we can divide BI’s activities into two spheres.
One of them is predictive, which we mentioned previously, in the section where we talked about the functions of a Business Intelligence professional.
A predictive analysis can, for example, indicate future trends, preparing the company to face a change in scenario, whether in the short, medium or long term.
The other sphere is prescriptive .
It highlights solutions to correct and optimize processes that already occur today.
For example, discovering that a certain sales channel has a low conversion rate and analyzing measures that would increase this rate.
BI And Risk Management
Risk management consists of the set of measures adopted by an organization to identify, evaluate, mitigate and monitor internal or external threats. The main risk factors must be classified according to their offensive potential, therefore, the manager needs a mapping with reliable information.
With BI reports, it is possible to assess with much more assertiveness how risks can affect a business and what protective measures should be taken. Increased costs and expenses, reduced profit and excess inventory are occurrences that can be tracked by BI and dealt with before they become a bigger problem.
Business Intelligence Principles
In order for you to be able to make increasingly informed decisions, it is important to familiarize yourself with the principles of Business Intelligence.
Check out, below, some important points that must be practiced to act with intelligence and strategy.
Never Leave Market Intelligence Aside
It is very important to understand the difference between starting a project with a prior research and planning phase and establishing Business Intelligence as a permanent process in the company.
Real business intelligence does not only manifest itself in specific situations, such as creating content planning for inbound marketing, for example.
Intelligence Must Be Systematic
In this example we just gave, the ideal would be to adopt information collection as a step that is always carried out to support the production of any content.
Of course, the right conditions must be provided for this to happen.
Instead of letting the responsible employee “get by”, provide the knowledge and structure necessary for agile research and data analysis.
Anticipate What Your Competitors Will Do
Being more agile than the competition doesn’t mean you need to spy on companies in your area and steal their ideas.
You can keep an eye on them ethically, learning from the mistakes they make or seeking to understand the reasons behind their growth.
But just being able to identify trends more quickly is also a way of anticipating what the competition will do and, thus, gaining a competitive advantage.
Understand Your Audience: Market Research
When experiencing Business Intelligence in practice, many managers admit that, before, they only thought they knew their target audience.
With heavily data-driven market research, analyzing consumer behavior becomes much less intuitive. It is worth remembering that most companies have different customer and potential customer profiles. In this sense, it is also an intelligent action to know how to categorize the data relating to each profile to enable more targeted and assertive actions.
Using Metrics To Bring Efficiency
As we previously mentioned, Business Intelligence also involves monitoring information. Metrics are raw measures of interest to the company, stored in the digital data warehouse.
For example, the number of sales of a certain product, values, dates, and other conditions relating to these sales.
But as business intelligence is not just about collecting information, the next step is creating indicators.
Indicators are not raw numbers like metrics, but values calculated from the intersection of two or more metrics, which allows a different view.
For example, calculating the average ticket for a given customer profile, or the conversion rate of leads captured through a given channel. With this, it is possible to accurately identify the bottlenecks of a product, service, process, or project and realize the need for specific adjustments.
As there is more than one variable, it is possible to produce graphs that facilitate the visualization of the real meaning of the information and the generation of insights.
Business Intelligence Tools
Now it’s time for you to understand what Business Intelligence tools we referred to earlier.
Discover the main ones:
It is an environment for storing digital data.
It stores and organizes the information that will support decision-making.
A larger company can rely on data marts, which are divisions of data repositories.
It is possible, for example, to have a specific data mart for inventory and another for sales.
The deposits we are talking about are used to store an immense amount of data.
The data mining process, or data mining, is designed to identify patterns in this data and organize it according to what has been pre-determined.
While data mining finds correlations and subdivides a large volume of data, OLAP (Online Analytical Processing) allows you to perform a specific action on that data, so that a situation can be simulated or a specific response obtained.
Which Solution To Use?
It is possible to purchase software that offers these tools.
But be careful: they need to be integrated to form an agile Business Intelligence system.
Depending on the need, there is the possibility of building specific technological solutions or adapting open-source tools .
The Relationship Between Business Intelligence And Big Data
The term big data refers to a large amount of stored data.
It also serves to define a new reality in which we live.
Millions of data are produced and stored every second.
To see this better, take out your cell phone: in just a few taps you can check the traffic and weather situation in your city.
This information will soon change, but the data will continue to exist.
When we talk about big data, however, we assume the use of this information for a specific purpose .
To achieve this, the concept is based on five Vs: speed, volume, variety, veracity and value.
Business Intelligence takes advantage of this reality to, as we have already explained here, generate insights and influence decision-making in the business environment to reduce the margin of error.
BI And Customized Dashboards
Customized dashboards are visual panels with graphical information that are easy to interpret, unlike data spreadsheets.
Advanced BI tools allow the user to customize dashboards according to their needs, defining, for example, which indicators will be most prominent.
When using customized dashboards, you format Business Intelligence according to your company’s needs, and can even adapt infographics according to sectors.
The objective is to make the information clearer and more understandable.
The Main Trends In Business Intelligence (BI)
Business Intelligence seems to be a path of no return for companies that value more strategic action.
But in addition to recognizing the importance of business intelligence processes, it is necessary to pay attention to news related to these practices.
Check out, below, trends that should gain strength in the Business Intelligence universe.
Automation in data processing is no longer a trend, but a reality and a necessity in Business Intelligence.
Artificial intelligence is a step forward, it has to do with the ability of machines to analyze this information.
This will soon become a reality too.
Internet Of Things (IoT)
The internet of things refers to intelligent equipment, connected to systems.
The trend here is more and more actions involving physical objects generating data for the company’s data warehouse.
Self-service in physical stores and chatbots in virtual channels should increase.
And in order to meet customer needs more efficiently, there must be integration with the data collected and an advance in artificial intelligence.
Storytelling In Data
Storytelling is a narrative, a story.
In the case of Business Intelligence, a story told with data .
Its purpose is to create, based on data extracted from different sources and properly processed, a script that has a beginning, middle and end.
In other words, what happened to the organization (how it performed in the past), pros and cons, and what the prospects are .
We’re not talking about espionage or anything like that.
It is possible to monitor the competition through intelligent and automated technological solutions based on their “footprints”.
Depending on the tool, you can choose to monitor companies that operate in the same segment as you or follow specific projects.
It is also possible to know the market average performance and compare it with the performance of your business.
Natural Language Processing
The advancement of artificial intelligence will also enable new uses of natural language processing (NLP).
In other words, the computer will recognize information from human speech and process it so that it can be used in business intelligence processes.
It has long been said that information is power, and the data collected has great value.
Therefore, they must be stored responsibly.
To prevent breaches that could cause millions in losses, data insurance options must increasingly increase.
The position of Chief Information Officer (CIO) may not be enough to handle the importance of data analysis in certain companies.
Thus, positions such as Chief Data Officer (CDO), Chief Analytics Officer (CAO) or Data Protection Officer (DPO) emerge , which demonstrate how strategic action in these processes is fundamental.
These needs will demand new professional profiles.
Specific qualifications in the area are still a differentiator, however, it will soon be a requirement.
While BI provides information to the right people in a timely manner, cloud computing provides the company with cloud data storage infrastructure accessible from anywhere.
Then comes cloud BI: a robust and scalable cloud computing system combined with tools that use this infrastructure to generate insights that can be accessed from any device.
Predictive And Prescriptive Analytics
When built well, predictive and prescriptive analytics can put a company far ahead of its competitors.
Predictive analysis, based on statistical models , can predict what will happen in the future based on past events.
For example: the chance of such a customer being late on their credit card bill in a given month is 10%.
Prescriptive analysis (which prescribes or recommends ) uses the information collected by BI, including predictive analysis, to suggest or recommend actions aimed at some objective.
You enter a department store and, when you make a purchase, the system issues a coupon with discounts on various products that you may need.
The coupon was generated based on prescriptive analysis, considering your purchase history and other data captured by BI.
From employee selection to talent retention policies, BI can be used as a strategic tool (also called People Analytics) within the Human Resources sector.
It is possible to use the data intelligently, for example, to recruit and select employees who have the profile desired by the company.
Social networks are a storehouse of data in this sense.
Likewise, the HR sector can establish valuation and bonus policies based on productivity and measure a team’s performance against established goals.
Thus, the company promotes selection processes more efficiently, reduces staff turnover and improves control of internal processes related to work routines.
Success Stories Using BI
Still in doubt about whether Business Intelligence practices are a necessity in your company?
So, find out below three stories that show that investing in intelligence pays off .
Not just in the business world, but also in politics and football.
In 2008, Barack Obama was elected president of the United States.
His campaign became well known for its innovative use of social media .
But few know that the Democratic candidate’s team used a data warehouse to gain a range of insights into voter behavior , campaign finances and more.
7 X 1
Football is a sport in which anything can happen, but it is possible to use different data to reduce risks and increase the chances of victory.
This is what Germany did in the 2014 World Cup , with SAP software that scans individual and collective behaviors of athletes (Germans and opponents), generating insights for the coaching staff to create training and game strategies.
To design a vehicle with the Brazilian consumer in mind , the automobile giant Fiat used Business Intelligence.
The processes made it possible to collect and analyze a huge amount of data on consumer preferences.
The result was a huge increase in sales, positive reviews and the receipt of several important awards.
The transport company TNT carried out a general restructuring of its BI platform and replaced its own systems with more efficient ones provided by the company Sas.
The implementation of the system began in the finance area and expanded to the rest of the company, including branches and other business units.
According to the carrier’s executives, BI solutions made it possible to use statistics in a simple and designed way, without the need to depend on IT.
Through predictive analysis, TNT began to anticipate problems and manage risk factors that could harm business results.
Market Intelligence Course: What Are My Possibilities?
To develop the necessary skills to implement Business Intelligence processes in a company, it is necessary to invest in professional qualifications .
If this is what you are looking for, the MBA in Business Management: Market Intelligence, from Fundação Instituto de Administração (FIA) , is the perfect option.
The course aims to enable students to act in decision-making in highly competitive environments , using modern market intelligence tools.
They are encouraged to develop a critical view of Business Intelligence, expanding the possibilities of understanding solutions to problems related to information and management.
Coordinated by professor Dr. José Roberto Ferreira Savoia , the MBA is aimed at professionals with degrees in any area who want to specialize in business management and deepen their knowledge of market intelligence.
Classes also cover subjects such as economics, finance, human capital management and marketing, among others.
Business Intelligence (BI), or business intelligence, is a set of processes based on data collection and analysis.
The objective is to make decision-making more agile and effective in companies. Instead of using intuition, take advantage of relevant and true information. For this to be done in practice, it is necessary to have a data warehouse, data mart, data mining, and OLAP tools.
And, of course, with professionals who understand data science and know how to interpret and relate it to the company’s challenges.
After all, for now, artificial intelligence is still far from replacing a human’s strategic thinking.This vision is increasingly important, as the market scenario has never been as uncertain and volatile as it is today.