We explain what BI is and the latest trends in using business data to gain a competitive advantage.
If you’re not use your data for business intelligence (BI), you’re missing out on opportunities to gain a competitive edge – or you may even be falling behind the leaders in your market.
And while it may sound like a high-end skill for data scientists and the like, the main idea of modern BI is to make it easy for regular business owners and managers to quickly access and spot trends in business data.
But where to start? Let’s begin at the basics.
What is BI?
It’s not easy to put your finger on the true meaning of business intelligence. For a start, it sounds like something that should be already part of a business strategy – after all, it’s hard to contemplate a company thinking about business stupidity.
While stupidity is a strong word, there certainly has been a reluctance to take on board information supplied by customers. There is a rich crop of data to be harvested from the trail left by customers, whether it be customer profile (age, sex, social group), seasonal fluctuations, spending patterns and many more.
Previous business generations have had little to go on, the information gathering was relatively unsophisticated and warning signs were ignored, often to the detriment of a business. Given what could be at stake for all companies, acquiring business intelligence (BI) seems like an obvious thing to do.
But that is only half the story: it may sound like a concept taken from the department of stating the obvious, but in reality there is a lot more to take on board. The principle is a simple one: it’s the art of making decisions based on available data. And in theory, the more accurate the data, the better the decisions.
That’s the theory but, in practice, what makes BI a slippery concept is that there is such a wide variety of different disciplines involved. There is the gathering of the data itself, its storage and availability, the manipulation and the interpretation. It sounds simple but it’s a process that involves different disciplines within the IT department, a range of skills and the participation of finance, sales, and marketing all coming together to produce an accurate picture.
In particular, the problem has been that much of the relevant data was trapped in arcane systems, accessible to the technical staff, while the business managers, the ones who needed the information, did not possess the requisite knowledge to make sense of the data. There was a yawning gap to be bridged.
This gap is nothing new. In the 1980s, Executive Information Systems (EIS) were aimed at providing exactly this sort of information. EIS was all the rage for some time, thinking that finally executives had the magic formula that would allow them to gather all the relevant information. Unfortunately, the rigidity of the mainframe-based systems that were in use then rather limited the use of EIS products.
The rise of cloud and visualisation tools
However, in recent years, BI (and its close relation, data analytics) has once again become part of the business repertoire. Many modern executives are fully aware of the potential of accurate BI and companies are transforming themselves to take advantage of all the latest products.
What has changed? There is a growing emphasis on accessibility of information, and a democratisation of information gathering. The availability of more powerful business software has driven a more tech-savvy generation of business executives. Most line-of-business managers are at home with Excel – and Microsoft’s product, while providing plenty of number-crunching in its own right, has been often used as a front-end for a number of BI products.
There has also been the emergence of cloud computing and the ability of business executives to select their own products, without the intervention of an IT department. This has led to a new generation of BI products, where old methodologies have fallen by the wayside. And cloud is proving to be an attractive option for many executives.
Another key trigger for change has been the rise of visualisation – the presentation of data in graphical format – illustrating complex points through the use of colour, brightness and shapes. In previous decades, the move to visualisation would have included concepts such bar charts and Venn diagrams, but there’s a whole new lexicon of graphs available now: heat and tree maps, for example, or scatter plot diagrams.
Again, Microsoft has been highly influential here, with the release a few years ago of Power BI, a suite of software to offer more visualisation elements to customers of Microsoft products. But it’s certainly not the only option – Tableau, for example, has been around for some time.
Next: the latest BI trends