Business Intelligence is all about data-based decision-making. Really, good data can benefit anyone who wants to measure progress toward a goal or anyone who wants to identify areas in which efficiency or effectiveness can be improved. The basic idea is that the more precise knowledge you have about what’s going on in your business the better-equipped you’ll be to optimize its performance in whatever areas you’re measuring.
Different industries use BI in different ways. Here are some hypothetical examples:
If a factory manager wanted to use raw materials more efficiently, the BI process would begin by setting up devices for tracking the amount of scrap being produced and establishing procedures to which workers must adhere to ensure quality data based on reliable measures. Once the data starts coming in, the manager will be able to determine if certain machines or certain individual workers are more efficient than others. Or maybe the day shift produces less scrap than the night shift. Comparisons like these would then inform the manager’s decision about whether to retool some of the machines or retrain some of the workers. It may even give that manager some insight into factors never considered before that could be tweaked to improve performance.
Insurance companies determine the cost of premiums by tracking the frequencies of common diagnoses and procedures and extrapolating the trends into the future. They track data from all kinds of sources and use it to calculate the probabilities that their clients will need various forms of medical treatment, and they use these calculations to determine cost structures. Beyond the cost of premiums, though, insurance companies are often called on both by the businesses they serve and by government agencies to forecast how much costs will increase as far as ten years into the future. To arrive at these forecasts, the insurance companies examine trends in the healthcare data they routinely track in much the same way they do to develop risk profiles for individual clients. The end result is a useful estimation of cost increases that helps everyone make informed choices for the future.
From the perspective of a sales team manager, Business Intelligence can provide information on which salespeople are outperforming the others with which products. Managers can also use data to see if a particular product is moving in a particular territory, which could inform their decision whether or not to try to push sales of that product into a territory with similar demographics. Each of the salespeople can benefit from this information too. A salesperson might compare data on sales frequencies at one time vs. another, in one area vs. another, or for one demographic vs. another.
Any given organization will likely benefit from the BI practices that are standard for the industry, and knowledge of how different types of business use data to inform decisions is something you should expect from a good BI expert. But every business has its own unique needs and goals, so every BI project should begin with a planning phase that identifies what the stakeholders’ objectives are. With those objectives in mind, the BI expert can work to build the tracking inputs and set up the procedures that will provide useful measures of progress, as well as useful guides to deciding on what changes need to be made. Data-based decision-making isn’t just about crunching numbers, though. It’s about establishing best practices for arriving at those numbers. And it’s about transforming the numbers into the clearest and most intuitive displays and readouts so you can integrate them with all the insight you already have into your business’s operations and incorporate them into your overall view of where your business is headed in the future.