The more you know about your business sector and the competition at hand, the better you can be prepared for what the future holds. Just because you are doing well right now, doesn’t mean that you will still be here 6 months from now.
Ethan Taub, the founder of finance service website Goalry, points out specific well-known companies that have faltered in recent years. Once-huge names such as Nokia, GM, or even Blockbuster have all—more or less—fell into oblivion for not being future proof. All of these were leading the market share in their respective fields at one point in time, some were offered a lifeline which they did not take such as Blockbuster being offered to purchase Netflix.
Essentially, failing to adapt to the changes in society will mean that you can fall behind running a business. Understand your customers, but also be aware of what your competitors are doing. After all, as the saying goes: “keep your friends close, but your enemies closer.”
Here’s where the idea of business intelligence comes into play.
What is Business Intelligence?
Hew Blair of Justerini & Brooks perfectly describes the concept in simple terms. For her, business intelligence (BI) helps companies make more informed decisions. It also sets up a company to exceed sales and marketing goals, develop an understanding of their customers, improve their customer experience, increase productivity, and meet their compliance requirements.
The ability to understand data and turn it into actionable insights gives your company a competitive edge, assisting you to grow your customer base and create better products that exceed customers’ expectations. Accounting software—powered by artificial intelligence and other cutting-edge technologies—empowers businesses to track the performance of their internal processes in real-time and act on developments for maximum benefits. Unlike traditional ways of maintaining data in a spreadsheet, BI tools help you to use data to its full potential and eliminate the constant need for human intervention.
Understanding Historical Data = Better Profit
Any company which takes the historical data into consideration while making any strategy tends to be doing better in terms of profit, according to business consultancy firm EPCGroup’s Sanjeev Pandey. Apart from the predictive analytics features in any business intelligence solution, businesses really take the advantage of analytics provided by BI tools.
More and more big organization leaders all over the globe have also made it a point to stop making uninformed decision. Decisions are now backed by historical data of companies either from sales, operations, or marketing activities. In short, BI tools have hugely affected how organizations are doing business.
BI Outlines Growth Capabilities
Michael Sena, the founder of spreadsheet consultancy company, Senacea, backs this claim by saying that one of the ways to approach company growth is to see it as a constant process of testing which activities are useful and profitable and which not. Based on such observations, you, the company owner, or executive team might choose the areas of expansion and contraction of the activities. Business intelligence informs such decisions, effectively contributing to the setup of feedback loops. For companies scaling their operations, the BI domain backs up the decisions with data.
Over time, BI data also defines the growth capabilities of the company, expressing the crucial inputs into financial projections and stress testing analysis. An organization fully aware of its historical marginal cost of employment, production cost curves, and investment payback periods can make informed decisions and mitigate the risks.
That’s especially important when benchmarking against the industry peers is inaccurate or unavailable. Furthermore, comprehensive business intelligence systems can inform decisions that are non-intuitive yet financially viable. For instance, a marginal analysis of the lead generation cost might indicate that deep discounts or generous referral bonuses might actually be more economical ways of client acquisition than perceived.
Effective Data Management
With the majority of interactions with customers and transactions currently happening online, the amount of data will only increase as we move into 2021, as said by tech entrepreneur Christian Bolz of Coara. With people spending more time online every day, the organizations who implement BI will benefit greatly from it.
BI not only gives the business a hand on the pulse for the real-time state of things via dashboards but also gives great insights that are derived from data that otherwise couldn’t have been noticed as easily. As an example, understanding which products are the most sold out and at what times, so that a business can have an increase their inventory timely to get the best out of the demand. Or in order to learn which logistics solutions are most prone to delays.
All of this leading up to having a better optimized customer experience, greater sales KPIs and decreased costs. All the capabilities of BI as we’re going into a more digitized chapter of life and businesses can dramatically help to increase the company’s growth via the insights provided by business intelligence.
All in all, these are just some of the reasons why business intelligence is a vital ingredient in a company’s growth. If this pandemic has thought business leaders anything, it’s that now is the perfect time to reassess goals, adapt to the ever-changing norm, and future proof the organization.