Are You Deriving Real Business Intelligence from Your Data?
Sanjay Mehta, Joint CEO of Mirum India, dicusses Data, analytics, data science, business intelligence, beyond the jargon, what do these really mean for business and when do data start translating into actual business impact.
What is Business Intelligence?
In today’s day, all companies generate a ton of data across their various consumer touchpoints. Converting such data into meaningful information that finally drives bottom-line impact, is called Business Intelligence. To transform data into actionable intelligence requires software and services, and the end goal is always to impact the organization’s strategic and tactical business decisions. BI tools access and analyze data sets and present analytical findings in reports, summaries, dashboards, graphs, charts and maps to provide users with detailed intelligence about the state of the business.
Business Intelligence then, is about analyzing the past and current state, to be able to impact decisions that will impact the future.
How Different is Business Intelligence from mere Analytics or Reporting?
Like I mentioned at the outset, the terms data and analytics and reporting and business intelligence, are often loosely used. But there is a fundamental difference between analytics and reporting, and Business Intelligence. While reporting shows you what happened so far and what the status is, Business Intelligence shows you why things happened and also provides guidance to improve business performance for the future.
Reports often use standard or well-known formats to help people do their jobs better or more easily on a daily (or weekly, monthly, etc.) basis. They may also focus on one specific set of data or records. For example, a daily report of all the customer orders that must be shipped by the end of the day will show the shipping department what it must do to meet current business goals of prompt delivery.
On the other hand, often using multiple sources of data, BI lets you discover data relationships you never knew existed and explore new business possibilities. For example, by analyzing shipping performance over time, customer satisfaction surveys, and seasonal variations in demand, you might gain insights into when and how shipping teams should be increased to maximize profitability, competitiveness, and customer loyalty.
Importance of BI
Raw data is turned into usable information using Business Intelligence. By itself, raw data does not tell us what to do next. It is BI that enables a comprehensive analysis of that data, to identify trends which can lead to making changes or implementing strategy shifts, and to understand the interconnections across different functions across the business.
All too often, data would come in too late, and by the time the analysis on the data happened, the spends had already taken place and it was too late to do course correction. With BI, however, you can improve productivity significantly. The process of analyzing and interpreting data faster and more efficiently ensures that business data is understood faster, and the team is focused on running the business rather than simply pouring over reams of data dumps.
BI has huge impact on sales and marketing as well. It enables you to understand clients and customers at a deeper level, and basis which, you can create solutions to connect to the customers more meaningfully with relevant messaging.
BI enables seeing the individual components of the business, some that may have remained less visible otherwise, and to identify those that need improvement, and to make changes accordingly.
As BI enables you to understand the impact of investments against results, you are in a position to better allocate resources, and thereby generate better ROI. Resources can then be deployed strategically to ensure early discovery of creeping increase of spends against less impactful areas.
BI also enables to better understand consumer behaviour as you are able to track consumption patterns basis global, regional, local and many other slices, to understand preference trends. Basis this, the business can develop more relevant products and services catering to different market slices.
To summarise then, how will Business Intelligence provide benefit?
- Benchmarking data against competitor and historical data for continuous improvements.
- Quick answers to critical business questions.
- Align activities with strategy.
- Reduce time spent on data entry and manipulation.
- Gain in-depth real-time insights into customers.
- Identify and analyze areas to cut costs and for budget allocation.
- Boost internal productivity by spending time on what’s important
And yet, we keep reading horror stories of investments into data analytics tools, and not being able to derive benefit, and then a kind of blame-game about the impact of such data. Why do people actually fail on BI setups?
- Failing to set business goals
- Failing to secure their data properly
- Getting distracted with new and advanced features
- Insufficient training is given to working professionals
- Thinking of this as a one-time investment only
- Build it and leave; this is a continuous process, not a one-time build
- Not fully leveraging
How to do REAL Business Intelligence?
Every Business Intelligence process must start somewhere – and this process should begin by asking the important questions about your brand, offering and customers. What outcome do you expect from consumers? What are your effective success factors (KPIs) to track these outcomes? What are the driving factors that influence your business?
For example, here we have created Conversion Paths framework by using different data silos such as AdWords, Facebook Ads, Google Analytics, MailChimp etc. We called it – SEE, THINK, DO, ENGAGE – in our organization which gives an answer to every important business question at every stage that influences the outcome. This framework can be implemented into a central dashboard such as Microsoft Power BI, Data Studio etc. So, everyone in the team can see the essentials in a single view which can lead to faster and more insightful decision-making.
Trust this gives a good guide to the power of Business Intelligence and the huge impact that it can have, for any organization.