Table of Contents
- What exactly is Business Intelligence?
- What is the purpose of Business Intelligence?
- What are the levels of business intelligence?
- 5 Ways to Make Good use of Business Analytics
- The key figures of the business analysis
There are a number of different tools and techniques you can use to analyze and ultimately improve your business. However, before you can analyze anything, you need meaningful data from which you can draw valid conclusions. This is where business intelligence comes in, sometimes referred to as BI. In this article, you’ll learn what the concept of business analytics is and how you can use it to support your business analysis.
What exactly is Business Intelligence?
Business Intelligence (BI) is a collective term that includes applications, infrastructures, tools, and best practicesthat provide access to and analysis of information to optimize business decision and performance.
Business analytics is the use of software and algorithms to analyze data to generate actionable insights that guide a company’s strategic and tactical business decisions. BI tools analyze and present records in the form of reports, visualizations, tables, graphs, and maps so that users can understand the information and draw conclusions.
In this sense, business analytics is not only the process of extracting valuable information from a data set, but also collecting and applying that data and the tools used to it.
What is the purpose of Business Intelligence?
The aim of business analysis is to help you turn the day-to-day data you receive from running your business into conclusions that can then be used to improve your business.
Using this otherwise ignored data to improve business performance is a win-win scenario for all stakeholders.
BI is also known as descriptive analysis because only the past or current status is displayed. It doesn’t tell you what to do – it just tells you what was and what is. Ultimate responsibility for data-based actions remains in the hands of executives.
What are the levels of business intelligence?
Depending on how you define BI, it can be divided into several different phases. To see some of the core phases of business analytics, see the following schema:
- Range selection: The so-called Scope Selection is the decision process, which parts of the data you receive should / could be analyzed in order to obtain meaningful information.
- Data collection: Once you have decided what data you want to collect from your company’s day-to-day operations, you need to start recording. This process is also known as data collection.
- Data analysis: By definition, data is not very useful in itself. For this reason, after collecting, you need to start processing and analyzing the data to get meaningful information from which you can draw valuable conclusions. In this step, you can visualize or transform the previously collected data to make it more relevant and understandable.
- Interpretation: At this point, you can start interpreting the processed data and try to draw some conclusions. What does it tell you about your company or the market in which you operate? How can you improve your work?
Note that you sometimes hear the term Extract, Transform, Load (ETL) in relation to levels 2 and 3.
5 Ways to Make Good use of Business Analytics
Business analysis provides historical, current, and predictive views of business decisions. These impacts can be measured on almost any business function, from sales to production to financing. Here are some ways companies use business analytics:
1. Customer analysis
Today, consumers interact with the business in a variety of ways. There are websites, chatbots, emails, social media, chatbots, calls, direct interaction and many others. This increased number of contact points has led to data from multiple sources. Business analytics aims to integrate this data from multiple sources to get a complete overview of the customer.
Low-level data analysis only provides insight into what’s going on. Which strategies worked and which did not. Business analysis is one step ahead and evaluates possible reasons why a strategy worked or failed. This helps build a cause-and-effect relationship for a more detailed analysis of customer behavior and customer preferences.
2. Improving operational efficiency
The current markets are saturated. The Internet is crowded with content, ideas, experts, products, services – virtually everything. Whatever we want is easily accessible to us. In times of information and product flooding, no one needs a company that offers just another obvious solution. Business analytics leads executives and owners to put their budgets into the right resources and infrastructure. By understanding market trends, business analysis can suggest new business models, techniques, processes, and methods. The lessons learned can be used to improve the operational efficiency of companies.
3. Increasing sales
You can use business analytics to define the exact strategy that you can use to increase your company’s revenue. It can provide important insights into who your end user is, what affects their purchasing decisions, where they find them, and how you make your pitch. Today, the market is flooded with companies that publish information in the hope of a sale.
Business analysis is the knowledge of accurate data about the behavior of your ideal customer. There is information about where they are consuming information, what will lead to conversions, etc. With this information, you can create marketing strategies that maximize revenue and improve the ROI of decisions.
4. Gain a competitive advantage
Basic insights such as bank statements and Google Analytics are accessible to all companies. However, these tools and techniques provide limited information about the market, competition and customers. In addition, most traditional data analytics techniques provide insight into the data already collected by companies. Business analytics involves finding secondary data sources, social signals, or market trends to give companies a competitive advantage.
5. Identifying Business Problems
Business analytics go beyond the income statement and balance sheet and provide insights into the true health of a company. Many BI applications can be integrated into your accounting software to identify trends that would otherwise be hidden from executives. Business analysis is not only limited to key performance indicators (KPIs) but also includes forecasts to avoid bottlenecks and time-critical decisions such as purchase or hiring. By displaying data from multiple angles, BI can reveal problems that are usually overlooked by traditional analysis techniques.
The key figures of the business analysis
A whole range of technical jargon is associated with business analytics. To help you understand some of the key words related to the processes and concepts involved, we’ve created a list of some of these expressions and their definitions:
- Source data: The unchanged raw data that the company can access regardless of business analysis strategies.
- Data Warehouse: A single location (usually digital) where all source data is aggregated.
- Online Analytical Processing (OLAP): Processing raw data through a single system that has access to many different perspectives (multidimensional analysis).
- Dashboards: The front-end interfaces that present the most important processed data to the user (in the form of various visualizations).
In summary, business analytics is a broad term that refers to everything related to collecting, processing, and using the raw data that companies receive on a daily basis. Using this otherwise unconsidered information to improve the way your business works makes BI so powerful. Business analysis spans several phases, ranging from collecting unprocessed data to useful conclusions. Despite the fact that BI seems to have its own language, there are only a few metrics you need to know to start your own business intelligence strategy.