Why Big Companies Use Business Intelligence
And Why You Should, Too
Kickstarting a business is hard work, and seeing a good launch uplifts your morale. But the challenge is not in the beginning—you have to keep improving and innovating to stay afloat, otherwise, you will sink slowly while your competitors rise on top.
This is where business intelligence comes useful.
Business intelligence or BI is the process of transforming raw data into useful information to derive intelligence that aids in decision-making. It comprises methods, strategies, and technologies for data analysis. This is not just a software or application to extract big data; it is a broad concept that encompasses tools, technology, software, and business practices to promote sound decision-making.
Compared to competitive intelligence which focuses on the external competitive environment, business intelligence is all about the internal dealings of the organization.
The goal of business intelligence is to interpret big data within the organization into readable, understandable information that will help key people in business to make decisions for the betterment of the whole organization.
Let’s get to know how big companies benefit from business intelligence, and why you should follow suit.
1. Business intelligence enhances productivity and efficiency.
Hospital administration is more complex than office administration due to the higher degree of medical and legal risks embedded in its practice. One common challenge in hospital administrators is improving the efficiency of patient referral systems. Have you observed how time-consuming it is for some hospitals to retrieve patient data? Many hospital managers scratch their head, not knowing where the problem is.
It is even more challenging for Mayo Clinic, both a medical facility and an academic organization. Business intelligence gives valuable insight to the company through the application of data and analytics. This supports the complex 24/7 operations and identifies the problems that hinder productivity and efficiency.
Once you pinpoint where the problem is, business intelligence can help you formulate a solution specific to it. Everything else will follow—high client satisfaction, excellent sales, and a positive reputation.
2. Business intelligence cuts costs.
With the constant fluctuation of gas prices, how does the oil industry continue to be a booming business? Take petroleum giant Saudi Aramco, for example, which generated a revenue of almost $500 billion in 2017.
Because petrol companies like Saudi Aramco do not have a hold on the price of crude oil, they focus on the distribution and marketing of oil instead. For instance, once they gather information on the price increase of crude oil, they can compensate by finding solutions to generate sales. But what about the price decrease of crude oil? They can take advantage of it through price rollbacks, attracting customers and still increasing sales. In both scenarios, the industry is able to meet their goals.
Who doesn’t want to cut back on costs and raise profits at the same time? You don’t have to own a large company to perform business intelligence. Even as an aspiring businessman, you can use BI to make cost-saving decisions with confidence.
3. Business intelligence aids in decision-making.
Jeff Bezos founded Amazon 24 years ago. Until now, it remains one of the most sought-after online selling platforms by entrepreneurs. It revolutionized e-commerce to one of the most lucrative industries of the century. More than two decades after, how is it still so successful?
Amazon invests on business intelligence in its vast operations. If you want to build a successful business, you have to brush up on your decision-making skills. And to make sound decisions, you need the right intelligence as a basis. You don’t just make a decision at the last minute; oftentimes it involves days of analysis and round-table discussions.
You can take a page from Jeff Bezos’ book by using business intelligence and taking advantage of the dynamics of the Internet, which powers e-commerce. Remember that BI has a heavy reliance on technology and computer software—proper use of automation armed with your critical thinking skills will help you arrive at the best decisions.
4. Business intelligence improves sales.
Since brewing its first cup of coffee in 1971, Starbucks is now operating 28, 218 locations all around the world. The popular coffee chain utilizes business intelligence to gather purchase data from the millions of individuals who buy coffee. They used the intelligence gathered from their data pool to launch their Loyalty Card program, which can predict what variants sell the most to different consumers. In turn, they post their offers and promotions through email marketing, social media, and other web-based platforms.
This is how Starbucks attracts loyal customers, consequently boosting sales to record-breaking heights.
If this is something you would like to do, business intelligence is key to improve your sales. The right information will drive you to build the right strategy to magnify your profit.
5. Business intelligence reduces theft.
Many retail stores face inventory shrinkage. Shrinkage happens when a certain product somehow gets lost anytime between order-taking and point of sale. Can you imagine how much profit is lost because of this?
Lowe’s, one of America’s biggest home improvement stores, uses business intelligence to enhance supply chain and decrease, if not eradicate, fraudulent returns. In fact, it has a separate data center focusing on business intelligence for its operations.
Even for small and medium enterprises, business intelligence does a good job of tracking the number of lost products, identifying the specific department with the most shrinkage and determining the types of products that usually get lost. Knowing all these information helps you to come up with policies that hinder shrinkage.
It’s astonishing how so many companies from different industries use business intelligence. What do all these successful companies have in common? Consistency. They don’t just use business intelligence at one time, then do it some other time when they see a threat. As a business owner, you can benefit by using business intelligence in all aspects of your operations—at the right time and using the right information.
Business intelligence is a process done through a collective effort. CEOs, managers, team leaders—all employees within the organization play a crucial role in gathering data, collecting information and presenting intelligence to key people who make strategies and decisions.
Does your business hold massive amounts of data, but unable to take advantage of it to increase profitability? It’s never too late to invest in the right business intelligence tools. You don’t have to do it yourself—business intelligence analysts can do all the work for you to help you achieve your business goals, ultimately moving your entire organization forward.
