In today’s fast-paced market, those companies that can create competitive advantages and superior strategies will leave their slower competitors behind.
Even though today’s technologies allow organizations to create and access massive volumes of data, management normally struggles with what the data means, leading us to the conclusion that technology alone does not resolve business problems.
Business intelligence (BI) is the key to bringing together information, people and technology to successfully manage a company or organization.
The term business intelligence is relatively new and it is a multfaceted concept that according to some authors, can be described from three different perspectives:
- Information to make better decisions faster
- Tools that will convert data into information
- A management philosophy to make more rational decisions
Making Better Decisions Faster
The primary goal of business intelligence is to help people (hence the organizations they work in) make better decisions faster.
By making better decisions we mean improving any or all parts of the business process. BI helps by analyzing whether actions are in fact aligned with company objectives. Since BI is a two-way street, it also has a major role in creating the company’s strategies and plans.
Making good decisions and taking action in a timely matter is key in today’s short-life opportunities. The key is to make not only good decisions but faster than the competition.
Another key thing to consider when needing speed in the decision making process is the feedback within the organization. If rapid access and quick turnaround of information is not possible, then decisions are made with old or no information. The consequences of making decisions with outdated or no information could be devastating, like loosing key customers or continuing to invest sales efforts in selling products that customers no longer prefer.
Converting Data into Information
Over the years, companies collect and accumulate large amounts of data. When business executives and managers need to access useful and relevant facts, they are faced with having to deal with mountains of data which makes it difficult (if not impossible) to make better decisions and fast.
BI systems are used to convert raw data into useful information by accessing huge volumes of data and showing only the relevant subsets in a form that is easily understood by the decision maker. A crucial aspect here is that BI systems allow you to answer your questions almost as quickly as the question is formulated.
Often, the challenge for decision makers is not the technology aspect of BI but to define what information is useful and relevant to a decision. A company’s most important metrics are usually called key performance indictors (KPIs). BI systems update these KPIs as real world facts happen.
A Management Philosophy to Make More Rational Decisions
Business Intelligence can be described as an approach to management or a management philosophy. Some authors call it a BI attitude.
This approach to management could be characterized as:
- Seeking measurable quantitative facts (data) about the business
- Analyzing these facts using methods and technologies
- Creating models that reveal the cause and effect of operational actions and the effect these have on the company’s goals that were set
- Trying different approaches and checking the results through continuous feedback
- Understanding that people are not always rational
- Making decisions and taking actions based on all of these characteristics
Business intelligence delivers tools that allow experience, “gut feelings” and intuition based decisions to be founded on real facts.
We will be publishing a series of articles in future newsletters. Our objective is to show examples of how business intelligence will help you make decisions based on real facts and leave to a minimum those un-informed or pure guess decisions. For more information, please contact us at email@example.com.