Business intelligence has changed over the years, today it is something much more powerful and profitable than ever before, writes CHARLIE FLETCHER
Running a successful business is a constant battle. There are thousands of things to keep in line and balance such as keeping up with competing businesses, balancing costs and expenditures with profits, and maintaining a high degree of customer satisfaction with your products and services. Fumbling badly on any one thing can bring the entire business down.
Every organization has some set of policies, goals, and strategies in place to help guide decision-making and gather data.
Doing so is seen as an essential component of leading an effective business. However, if done improperly, you’ll see negative impacts within your company over the long term. Unfortunately, stumbling when making these influential decisions can become a high-stakes game that many startups lose. After all, nearly half of businesses are bound to fail within the first five years of being open.
One strategy that many smart business leaders are beginning to pursue is business intelligence (BI). The strategy first emerged in the 1950s as a form of decision-making for business leaders. However, in recent years, it has evolved into much, much more than that.
What is Business Intelligence?
The definition of business intelligence is something that has evolved over time. The 1950s definition is still intact, to some degree, but ultimately business intelligence is more than that now. Today, business intelligence encompasses the technology-driven process of collecting, analyzing, storing, and utilizing data to provide valuable insights for management on how the business should operate.
It’s also a growing field. Today, business intelligence software revenue is nearly $24 million annually and growing steadily. This growth can be attributed to the fact that more and more business leaders are recognizing the power of technology that allows them to gain insights into potential opportunities and take advantage of them in a timely fashion.
Ultimately, this can be the key to out-competing even some of the stickiest competitors and winning over a greater number of potential (hopefully soon to be fiercely loyal) customers.
Business intelligence technology involves a wide array of tools. Some of the tools can capture data from both internal and external sources, while others can use programming and algorithms to make sense of a bunch of seemingly random information. Still, others can put all of that information into graphs, charts, and reports that can easily be disseminated across the organization in a usable manner.
Building Strategies that Work for Your Business
With these options available, it can be difficult for any entrepreneur to determine the right strategy for their small business.
Furthermore, it can be challenging to identify exactly what information you need to pull out of all of the information collected. Do you need artificial intelligence software or something else? For this reason, it is valuable to start the process with a plan and an understanding of what questions about customers or your business you want answered.
For instance, if you are interested in evaluating whether a new technique or tool is profitable to the business, you might ask questions like:
- How have my business profits responded since XX tool was implemented?
- Are there any other factors that might be influencing profits outside of XX tool during that time period?
From there, you can use data mining techniques to analyze large amounts of data and variables. In the end, BI can help pull out information and put it into an easy-to-read and understandable format. This information may tell you whether to increase or decrease in profit margin since implementing the new tool and allow you to assess whether or not it is actually worth continuing to use it.
Preparing for the Unexpected
Tools in the business intelligence toolbox can also help your company prepare for some of the less awesome aspects of running a business. For example, using BI tools your management team can assess what would happen if your three best employees were to resign tomorrow. From there, they can pull together strategies to help mitigate the situation, improve perks for high-performing employees, or something else altogether.
Business intelligence tools that enable business leaders to have a greater understanding and control over the business finances can also help if something unexpected were to happen.
When business is good it is good. But there is always the potential of an economic downturn. What happens to the business if another global pandemic occurs or if inflation keeps customers from spending as much as they used to?
Incorporating business intelligence tools into the decision-making process for your business can be a powerful means of staying ahead of the competition and making smart financial moves. It can identify opportunities and watch-out situations and help prepare for unexpected events.
Ultimately these decisions can be the difference between a successful small business turning into a thriving network of small businesses. Business intelligence has changed over the years, today it is something much more powerful and profitable than ever before.
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