If you’re a business owner who’s aware of the intrinsic value of business data, it’s likely you know about the hoo-ha surrounding business intelligence.
You can most probably recite the promises of greater business visibility and the reassurances that a better view into your company’s data will help it thrive.
But by the time you’ve finished reading this, you’ll be able to go beyond the generic business visibility line.
You’ll understand why business intelligence is such a buzz term, where it can truly make an impact in your company, and how you can overcome the challenges many encounter in adopting it.
Ready to get to the nitty gritty of business intelligence? Let’s get to the point.
What’s the big deal with business intelligence?
Over the past decade or so, ‘business intelligence’ has become synonymous with data-driven business management.
It’s a term that most software providers and retailers use to draw people in, with promises of valuable insight and visibility into your business.
But why are these insights so necessary nowadays, and why is it so important to have that business visibility you’re constantly told you need?
An increased need for faster, better business decisions
In addition to (and perhaps largely because of) global competition in today’s marketplace, your customers have become increasingly more demanding. They want access to the highest quality products and services, at the lowest prices and in the shortest amount of time.
Your company’s survival depends on it being agile enough to respond to these forces.
This includes rapidly identifying and addressing problems, as well as taking advantage of any opportunities that come up.
Therefore, the need for better, faster and more fact-based decisions is more relevant now than ever before.
In the midst of these increasingly competitive market conditions, business intelligence promises to provide you with the depth of insight you need to carry out these decisions.
This ultimately helps to improve your company’s competitive posture and position in the marketplace.
In fact, according to a survey by professional services firm Accenture, 89% of business leaders believe business intelligence and the big data associated with it will revolutionise business operations much like the internet did a few decades ago.
What’s more, just over 70% of those leaders also believe businesses that are slow to adopt the technology may struggle to compete in the years ahead.
Business intelligence is being perceived as a saviour for business owners and managers against the growing complexities of global business practices. It helps them better compete in today’s marketplace by empowering them with insights that enable them to act swiftly to challenges and opportunities.
The availability of data and the affordability of new technology
Thanks to a flood of ever more affordable technological advances over the past decade, organisations of all sizes are constantly collecting and processing enormous amount of data in small amounts of time.
The huge strides made by these new technologies (from both a hardware and software perspective) are also reflected in their pricing models, leading to a continuously reduced cost in the ownership and use of such systems.
In addition to all-out ownership models that often involve large, upfront costs and fees, there are also software as a service (SaaS) vendors that offer the opportunity to rent business intelligence solutions through the cloud for a more affordable, regular fee.
Three reasons why your business hasn’t jumped on board
Despite the advantages of adopting business intelligence, you still might be hesitant to jump on the bandwagon. Here, we address a few concerns you may have:
1. A resistance to the management culture shift
Evolving from a traditional management style that had to rely more on intuition to a more contemporary one backed up by newly available data-based evidence can be a disruptive process.
It may also be difficult for you to relinquish your personal control over making decisions without potentially being challenged by data or information that contradicts what you feel.
However, as you begin to adopt data-driven decision-making and realise the benefits, the cultural shift will naturally begin to take shape.
Global competition and a demanding marketplace will be the key drivers that will nudge you towards this approach.
2. The integrity of big data
The data that businesses collect today is not just big, it’s also unstructured and messy. And as the amount of it increases, the traditional means of collecting and processing it become more difficult (think about a spreadsheet, for example).
It quickly gets to a point where you may be overwhelmed by the amount of data in the business.
For your company to make a success of this data, you need a way of handling it so it can be converted into actionable insights while maintaining its accuracy and integrity.
By delaying the adoption of business intelligence solutions, your company will be at risk of having an overflow of incorrect data that is mostly inputted manually and just for the sake of it, without being able to effectively act on it.
3. Security and privacy concerns
You might be hesitant to trust cloud-based business intelligence solutions with your company’s data. Perhaps you still prefer private networks or offline solutions because you think they are less vulnerable and will help you avoid the nightmares of data breaches you hear about in the news.
Most of the security and privacy concerns surrounding online solutions are born out of misinformation or a lack of knowledge. There are also incredibly strict protocols in place to ensure software companies encrypt and secure their customers’ data. They carry hefty fines if they’re not followed.
And with secure backups in place and the ability to access the system from any place, at any time (and no set physical location for the data), the major risks of information theft, loss and damage are also negated.
In fact, according to a report by Grand View Research, more than 46% of small businesses who have adopted business intelligence use cloud-based tools as a core element of their business strategy.
Read more about business intelligence
- 5 signs your company is ready for business intelligence
- Why business intelligence is a powerful asset for SMEs
Give your business a competitive advantage
The purpose of business intelligence isn’t to simply give you more visibility into your company. It isn’t just to give you different views of your data so you can figure out how to make it more successful. It goes much deeper than this and way beyond visibility.
Business intelligence will give your company a competitive advantage by equipping you with insights into market trends that enable you to make swift, data-driven decisions.
These decisions will then initiate the actions you take to outperform your competitors and better serve your customers. The more data you collect, the better decisions you can make, leading to more satisfied customers and a more profitable business.
Ultimately, if your business is collecting data about your customers, your products or services – or even your processes and the way you do things – and you’re not using it to improve performance or profitability, it’s time to adopt business intelligence.
Tips to start using business intelligence
A great analogy to consider here is that of a sports team and their coach. How can coaches make decisions, and how can they make reasonable decisions, without actually watching the game?
When we talk about watching the game in a business context, one of the most tangible areas to get a clear picture of what’s happening in your business, is the practical use of business intelligence.
Think about how business intelligence can help your business
Improving your business relies on the use of readily available data and information. Having this fast and accurate information at your fingertips allows for more informed business decisions.
Giving yourself and your employees the ability to easily and quickly gather information required results in a knock-on effect that ultimately strengthens the company.
Decide what to track
Consider the key performance indicators (KPIs) that you need to track in your business. Profitability, cash flow, break-even point and your top selling products are just a few that spring to mind.
Keeping your finger on the pulse of these major KPIs will go a long way in helping you make better informed decisions for the business.
How to choose a solution that needs your needs
Every business has different needs. This holds true for what a business will require from their business intelligence solution.
At the very least, a good solution should be able to easily answer questions such as:
- How far can we stretch our creditors’ days and what might that mean for cash flow?
- What difference would it make if we offered debtors 28 days to pay instead of 60?
- What resources will we need in terms of inventory and headcount if our business grows by 10%? How profitable would that growth be?
- How much have sales grown or shrunk against the same period last year? And more importantly, why?
Business intelligence helps business owners keep their fingers on the pulse of their business all the time so they know when to cut costs and when to invest, when they should be worried about cash flow, on which products and customers they should focus resources, and more.
In fact, business intelligence is rapidly becoming as indispensable as the company’s accounting system.
A basic guide to interactive dashboards for small business
Want to know how to use data to make the right decisions so you can grow your business? Download this free guide and learn how business intelligence tools can reveal insights that will keep your business moving.