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The world these days is highly data-driven, and hence, business intelligence (BI) is no longer a luxury; it's necessary to stay ahead of the curve. Maybe this is why 438,909 businesses use a range of BI software, making it one of the major components of business intelligence.
Here’s a quick snapshot of the top Business Intelligence (BI) technologies in 2024.
BI plays a strategic role in organizations, enabling them to harness the vast amounts of data they generate. It transforms raw information into actionable insights, putting you in control of your strategic decision-making process.
To stay competitive and make a cut in a global market, businesses are required to leverage BI for business analytics, leveraging various tools, technologies, and practices to gather, present, and analyze data. The ultimate goal is to empower business owners to make informed decisions.
Let’s explore the major components of BI and how they can revolutionize your business.
» Online Analytical Processing (OLAP): Your Multi-Dimensional Data Explorer
This technology stands behind the majority of business intelligence applications. It deals with data discovery and capabilities for report viewing, complex calculations for analytics, and assistance with “what if” scenario planning.
OLAP is a major component of business intelligence. It analyzes business information multidimensionally to assist with complex calculations, trend analysis, and data modeling.
With OLAP, the end-user can analyze specific data in multiple dimensions to obtain the necessary insight for making a decision. Businesses are constantly bringing information together to perform different analyses. They need all the data in one place to achieve an accurate and reliable understanding of different aspects of the data. OLAP can help them achieve just that: get quick access to multi-dimensional analysis results.
What makes OLAP software different from other analytics tools is the ability to store information in a multidimensional database structure. Dimensions are locations, periods, employees, products, accounts, etc.
» Corporate Performance Management
Corporate Performance Management (CPM) encompasses methods, metrics, activities, and systems used to monitor and manage a company's business performance. CPM software processes the focused information to turn it into operational plans. This process and methodology offer business owners an integrated approach to planning and forecasting for finance, sales, marketing, HR, and operations.
When this methodology is implemented, it connects company strategies with plans and executions, thus helping a business succeed and improve. CPM is an important component of business intelligence for companies looking for changes such as budget remodeling, cost cutting, upgrading organization strategy, better KPI alignment, and improving the financial planning process.
According to software experts at Tricension, cloud-based CPM software makes it easier to deploy the process, reduces costs, and provides information speed and flexibility. It allows the company to automate numerous manual tasks and improve the alignment between finance and operations.
» Real-time Business Intelligence
Real-time business intelligence (RTBI) is used to sort and analyze business data and operations, which must be done at the collection stage. RTBI allows the company to get insights into the business process as quickly as possible to take strategic action. This BI component is demanded when live business insight is required, which is not a rarity in the fast-paced environment of some industries.
For instance, the eCommerce industry can use RTBI to offer a more responsive and transparent customer relationship across all channels. It can lead to an increase in retention rates and drive up revenue. Customers want to feel recognized, get relevant recommendations, and be remembered by brands. And 75% of customers always want to buy from businesses that provide these three personalized services. This is where you'd use RTBI to get real-time customer insight and leverage it for customer support.
RTBI is becoming especially popular in a fast-paced modern society. Using software designed for RTBI, a company can quickly respond to real-time trends via email, apps, messengers, etc. For example, RTBI can help create special offers at the most suitable time possible to get the highest conversion rate.
Another example is limited-time specials for restaurants or supermarkets that involve perishable products and high demand at certain times of the day. All of the above can be done while the client is on the website near one of the company’s physical locations.
» Data Warehousing
Data warehousing allows the business owner to go through different data subsets and examine components that could help make the right business decisions. For example, warehousing gives a user an opportunity to monitor certain sales information collected on Mondays for the past 50 weeks. It helps create important statistics about the business and the industry. Warehousing implies storing formidable amounts of data in numerous special ways, which could be useful for analysis.
Different technologies exist to help the user take advantage of data warehousing quickly and effectively. Technically, the data warehouse regularly receives data from apps and systems used by the company. The data is formatted and imported to match the data already stored in the warehouse. The processed data becomes readily available to the end-users to help them make business decisions.
The organization chooses how often the data should be obtained from apps and systems depending on its particular needs and requirements. It’s worth noting that a data warehouse is different from a simple database. Data warehouses are created to help analyze a large volume of data. Their goal is to receive and process information in the shortest period of time possible.
» Data Sources
For the business intelligence process and methodology to be integrated, it is important to understand the data sources correctly. Pulling raw data from different internal and external sources is vital to the diverse analysis options.
Companies often turn to this key component of business intelligence to store huge amounts of operational data. BI needs to navigate between the data sources. In most companies, mainframe legacy systems create a foundation for the data centers because they can deal with large volumes of data.
However, such data is usually difficult to procure since many legacy apps are often obsolete or proprietary.
Operational data sources to take advantage of are:
- Enterprise Resource Planning – stores a large amount of transaction data, which can be used in BI environments.
- Customer Relationship Management – an excellent source of data for BI since these systems store and analyze customer behavior and important data, such as purchase activity.
- E-Commerce Apps – these apps can be a great source of data for BI since they offer real-time sales activity. Other sources are numerous company databases, flat files, web services (apps), RSS feeds, and more.
» Common Benefits of Business Intelligence
BI offers a variety of benefits to companies that choose to utilize it. It can put a stop to a large amount of guesswork that often accompanies decision-making, improves communication within departments, and coordinates activities. BI helps companies quickly respond to changes in the financial sector, industry, customer preferences, and supply chain functions.
As you integrate a few of the major components of business intelligence, you can experience improvement in the overall performance of the company.
This happens when you are able to take advantage of the second most important resource – data (the first one is people). The company wins when a business owner gets an opportunity to make decisions based on timely and precise information.
- BI allows employees to process their knowledge using analytical intelligence to deal with different business issues, such as slow and inefficient marketing campaigns.
- BI helps with finding the most profitable customers and figuring out why they keep loyalty to the company. This information is vital for further conversions.
- It helps with click-stream data analysis to improve e-commerce approaches.
- It allows discovering money-laundering and other fraudulent activities within the company.
- BI analyzes the potential customer profitability growth and reduces risks by acquiring accurate financial credit scoring of the existing clients.
- It figures out what type of products customers are likely to purchase and when.
- BI reduces equipment downtime by implementing predictive maintenance.
» Business Intelligence Offering Solutions
› Speed
BI tools can provide the requested data in the shortest time, often in real-time. The value of business-related information often depends entirely on speed.
› Reliability
The quality of information collected with BI tools is reliable, but only when the right components are used. Important information can be obtained in small fragments, analyzed, and evaluated to provide value.
› Combination
The ability to find answers to complex questions based on processing smaller information. The system can offer a high degree of abstraction, if necessary, to build solid model data.
› Navigation
BI allows finding the right information at the right time and place. It allows navigating through data to identify the necessary pieces for analysis.
› Presentation
The better the BI system performs, the less effort the user must put into interpreting the information to assist with decision-making. The speed of the BI results depends on the accuracy of the presentation.
» Final Thoughts
Knowing how to work with BI tools can improve the growth and development efforts of any organization. To start, it’s important to realize how to build the BI intelligence process, using the above components. Next, the company has to choose the right BI software to implement the strategy and achieve the desired results. Finally, it’s important to analyze the BI strategy's overall effect on the organization’s ability to grow and develop.
