Business owners are constantly faced with a common dilemma – they are relied on to make difficult decisions, but they don’t always have the information they need to make the most educated decisions for their business.
The information they need to make educated decisions is referred to as business intelligence (BI). BI comes from an infrastructure that collects, stores, and analyzes the data that your company produces, and when implemented correctly, it will create data-driven strategies and empower you to make better business decisions with the data available to you.
Looking at all the data your company produces, without the lens of BI, typically produces a headache, with 74% of employees reporting that they feel overwhelmed or unhappy when working with large data sets. Let’s face it, the numbers don’t just “speak” to everyone. This is why business intelligence is critical to scaling your business. It enables actionable data (versus just interesting data) and delegates some of the decision making throughout the organization.
In this blog, we will discuss the key aspects of BI and how it is evolving so that you can see how your company could benefit from a refreshed approach to BI.
The 3 key aspects of BI
To implement business intelligence tools into your business, it is important to understand the key aspects of BI, which are Technology, Strategy, and Discipline. These three aspects are used to help you obtain the data you need, formulate a strategy from the data, and ensure you are constantly monitoring and logging what decisions you are making.
The first step to gathering business intelligence is implementing the technology you need to collect, analyze, and report this data. These technologies will collect large amounts of unstructured data from any number of internal and external sources and process them into reports and dashboards.
Examples of top business intelligence tools include:
Once your tools are in-place and collecting your company’s data, they will analyze this data using artificial intelligence (AI). AI will enable your BI tools by taking all of the collected business data and automatically analyzing it into clear and helpful insights. Not only will your AI analyze this data quickly, but it will tell you the importance of each piece of data it analyzes, saving you the time and headache of having to figure out what all of it means to you.
Note: when it comes to AI, garbage in results in garbage out. Your analysis is only as good as the source and accuracy of the data inputs.
The most important output of your BI technology will be the reports and dashboards from your analyzed business data. You will now see the vast amount of business data in easy-to-read reports and graphs that give you the information you need to know. When you are equipped with a set of reports (dashboard), you will be able to make decisions based on real data that was collected, analyzed, and reported for you. This will empower you to be a more informed leader for your business and employees by having the ability to make quick and informed plans of action.
The difference between a report and a dashboard
While we’ve been using the terms interchangeably, reports and dashboards are different. Reports speak to one aspect of your business and while they may cross two key datasets, they give you a more siloed view of a specific metric. Dashboards on the other hand, reflect a collection of reports that help an executive or manager see a broader picture. Usually a dashboard can be customized by an end user to contain the reports they need. Dashboards are typically more direct and consumable by a broader audience as they tell a broader story.
Having the technological tools to implement BI into your business is an important first step, but you won’t see the advantages without having a proper strategy behind it.
Having BI help analyze your data will help your business, but who is using these reports, and what reports do you need to help with your KPIs? These questions will need to be answered with your BI strategy, because at the end of the day, your BI investment needs to help you gain a competitive advantage and improve your customer experience, which are 2 of the top benefits of having BI according to business owners.
So how do you create an effective strategy to get the most out of BI? It starts with figuring out who will be championing your BI. You will need a person who is responsible for making bottom-line decisions, so that they can use the reports and dashboards to their fullest potential, and align them with the company’s goals, mission, and KPIs. The BI champion at your company will need to get everyone onboard with this new data-driven and educate each department, as well as the organization as a whole, on the benefits.
One approach to consider is mapping out cascading key performance indicators across the organization. If the top goals are to increase revenue and improve overall customer satisfaction for example, you would then create the next level of goals for your leadership team that would be leading indicators for revenue and satisfaction. From each leader’s goal, you would ask them to create leading indicators from their managers. This cascade can continue down to any level of an organization and is effective as long as they eventually roll up to the top goals.
Whether it’s your IT, sales, marketing, or C-suite workers, having each member onboard with your BI strategy will allow you to track and report on the most important data for their role and give you the fullest picture of your business. Having your whole team involved with your BI, you can discuss how important discipline will be in getting the best results from your BI strategy.
Now that you have your technology in place and your employees involved, it is important that your organization uses discipline to track, score, and improve upon your results.
Like most business initiatives, you will need to track all of the decisions you make based on your BI. Keeping a running log of your decisions will help you understand why you made a decision based on the data and if you interpreted the data correctly. Having these decisions tracked will help you know if your reports are giving you the right information, or if any edits need to be made.
The idea of editing these reports over time to improve upon your results is called the Kaizen Method. The Kaizen Method is a strategy that revolves around making continuous improvements where all different types of employees work together to make incremental changes to improve your results. Using the Kaizen Method with your BI will be instrumental to making sure that the reports you are receiving are helping you make better business decisions.
Implementing a standard operating procedure for tracking and scoring your BI will be crucial to getting the results you want, but using Kaizen to continually make improvements will yield effective and accurate BI dashboards that will get the most out of your data.
The Evolution of BI
The importance of BI is clear, but BI in itself is not a new concept.
The first generation of BI is something most businesses will be familiar with. This revolves around employees, typically IT professionals, manually taking your data from various sources, storing it, and making this data accessible using queries. After these reports are complete, it can often start a very ineffective and time-consuming process where the reports are presented and interpreted. But what happens when there are follow-up questions? The IT employee will have to run another query and start the process over again. The time and money spent with traditional BI made the need for automation and AI necessary for business owners to make timely decisions.
Modern BI has taken many of these drawbacks and focused on making your data more accessible to non-IT experts with self-service capabilities using AI. By using data discovery and visualization tools, your data is automatically turned into charts that can be analyzed by anyone in your organization, as opposed to just your IT experts.
So what can you expect from BI in the future? With the emergence of AI in business tools, data automation will continue to be an important part of BI. While this is something you see in modern BI, data automation can grow to proactively report on emerging problems and trends, and continue improving the AI reporting process. Another evolution you can expect from BI will relate to the growing number of remote workers. There has never been more of a need for on-the-go reports than there is today, and mobile BI apps and reports can be expected as BI grows.
Businesses are collecting immense amounts of data and will continue collecting it. Using BI to help you collect, sort, and analyze this data is not only critical to your everyday business, but also for setting you up to scale your business in the future. If you would like to discuss how BI can work for you, do not hesitate to contact us here.