What Is Business Intelligence? (A Complete Guide With Examples)

People often wonder what business intelligence (BI) is. It refers to how businesses transform raw data into useful information. 

In this article, we will tell you how BI works and how it can help your brand. You’ll also learn the right way to use BI for your brand.

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What Is Business Intelligence (BI) and Why Is It Important?

Business Intelligence (BI) is the way businesses gather and examine information. They use new technologies and apps to merge data. After getting information from the data, they then make decisions. 

Brands use BI to make smart choices and learn how the business performs. It also helps to identify trends and outperform others. Business leaders no longer have to make guesses. Instead, they use facts and figures to decide.  

The aim of understanding what business intelligence is to get useful ideas from data. This way, leaders can know what happens in the business and improve in the necessary aspects.

BI includes important tasks like data mining and checking how people follow processes. Other key parts of BI are benchmarking and descriptive analytics. They all work together to help businesses plan daily tasks and future activities.

By explaining how the business is doing and patterns that affect the market, BI gives companies a competitive advantage. Brands that use BI can react to changes in demand as they happen. They have better chances to grow and improve their performance metrics.

BI is important as businesses need data to succeed. Experts expect the global market for business data and analytics to grow to almost $665.7 billion by 2033. This static gain shows the value of data-driven insights.

How the Business Intelligence Process Transforms Raw Data

The BI process uses a repeated cycle to turn random details into smart ideas. Most modern BI tools work without human input. Hence, they work faster and enable businesses to spot data from trends in real-time. 

Below is a breakdown of the various steps for business intelligence.

Step 1: Data Collection

BI systems collect information from different sources. Data discovery helps to curate a complete view of business operations. During this step, ensure to check the quality of the data from both internal and external sources.

Some internal sources are:

• Enterprise Resource Planning (ERP) systems that monitor business processes
• Customer Relationship Management (CRM) tools that store customer data
• Finance systems with details about revenue and price
• HR systems that track how employees work 

External Sources include:

• Data from the market shows trends in the industry and how well competitors are doing. 
• Third-party customer lists and demographic information
• Social media data that shows customer sentiment
• Economic indicators and regulatory information

If you want to collect quality information, use multiple data sources. Also, maintain strong data management processes.

Step 2: Data Analysis

After getting data, the next step is to sort, clean, and study it. This step helps brands find patterns and gain insights. There are different ways to study. Each method improves different parts of the business.  

Descriptive analytics explains past and current events with averages and ranges. It helps to understand past business data and present business data performance. For example, it might show that customer happiness dropped by 15% last quarter.

Predictive analytics uses statistical models and machine learning (ML) to predict the future. For example, it can predict whether customers will like a new product. By studying historical data patterns, predictive tools help businesses plan ahead.

Prescriptive Analytics tells brands what to do to get what they want. You can use the ideas you get to respond to future predictions. 

Step 3: Data Visualization

After studying data, it’s important to display it in a manner that’s easy to understand. Elements like graphs and charts turn data that’s hard to read into simple ideas. Hence, data visualization tools are must-haves.

Dashboards & reports are examples of such tools. They use maps and charts to show key performance indicators and other findings. Visualization tools show large datasets in clear formats that highlight changes and patterns.

Data storytelling is a practice that uses images and words to pass a message across. Bulky numbers may confuse decision-makers, but images and simple words are excellent guides. 

Step 4: Decision Making

Businesses use information gathered to make smart decisions. So, the entire business intelligence process enhances business performance. It also creates a strategic advantage.

Actionable Insights enables brands to work better, earn more, and succeed. The goal is for all BI insights to benefit your organization.

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The Tangible Benefits of Business Intelligence

Using BI creates lots of advantages that improve how a business operates and grows. Here are the top benefits of BI.

• Improved Decision-Making: Access to insights helps business users make fast, informed decisions. 
• Increased Operational Efficiency: BI tools streamline workflows,  identify and fix inefficiencies. Hence, there is less waste and more productivity. 
• Higher Sales and Revenue: With customer and market trends, teams can predict demand. This ability helps them stock up and sell more. 
• Competitive Advantage: Brands with robust BI platforms can identify trends. They also respond to demands and act strategically before their competitors.
• Enhanced Data Quality: Cleaning data for BI systems produces more reliable information.

Together, all these benefits spur business growth and success.

Key BI Platforms, Tools & Applications

Several BI tools play different roles in the data analytics lifecycle. Data analysts use these tools to interpret and simplify data. Businesses must understand how each tool works so they can choose the right ones for their needs.

Common Types of BI Tools

Below are the BI tools that most companies use:

• Reporting Software: They arrange and showcase data in an understandable way. They also generate concise reports that track performance metrics.
• Data Visualization Tools: They visualize data to show patterns that are hard to see. These tools turn data into charts and graphs. 
• Dashboards: They show metrics like key performance indicators in one view. You can use them to monitor real-time performance and study specific areas.
• Data Mining Tools: They use AI and ML systems to spot hidden patterns and insights in data.
• Online Analytical Processing (OLAP): It studies structured and unstructured data. The data comes from various sources, and they use it to resolve queries. 

Specialized BI Applications

Here are software programs you can install on your work devices to help with BI.

• Mobile BI: It provides dashboards and reports for smartphones and tablets. So, leaders can access business intelligence data anywhere they are.
• Real-time BI: It studies live data and gives an updated view. With this, businesses can change their actions at the right time.
• Embedded BI: It makes other business tools able to study and visualize data. So, users can see insights while using different tools.
• Location Intelligence: It uses maps to find location/specific patterns. Such trends can be in business performance, customer distribution, or supply chain.

Real-World Business Intelligence Examples

Let’s see how companies in different industries use BI.

Coca-Cola Bottling: Optimizing Operations

How Coca-Cola packages bottles shows how BI systems can change old business processes. Coca-Cola stopped collecting reports from staff every day. Instead, they began to use a BI system that sent automatic reports. 

Without the staff sorting data, this system saved 260 work hours. The system also showed live data on sales and operations. With this, work processes became faster and sales better. 

HelloFresh: Enhancing Marketing

HelloFresh used a BI solution to get automatic data from marketing. It also gave them customer behavior data, saving up to 20 hours daily.

The brand used these insights to make ads that interested people. Hence, they got new customers and kept old ones. By analyzing customer data, HelloFresh could find the right people to target.

Hershey’s Chocolate: Adapting to Market Changes

Hershey’s used business intelligence tools to adapt as the market changes. In the time of COVID-19, their BI systems noted that more people wanted s’mores ingredients.

So they started producing more of it and stocking up to meet customers’ needs. As a result, their annual earnings increased by $70 million. This example shows how BI brings money-making opportunities.

Building Your Business Intelligence Strategy

Before using BI, you need to come up with a business strategy. So, here are the steps to help you.

1. Define Your Objectives

You need a strategy that fits your goals. So, note what you want to learn from your BI system and how that data will help. Find out which key performance indicators you’ll track.

For example, you should know customer satisfaction as it directly affects your business. Use BI tools for use cases that will yield high returns. You can also use it in areas where data insights will make your business perform better.

2. Establish a Strong Online Presence

You must create a website to get data that helps you understand market events and how customers act. To keep customer data safe, you must use one of the best web hosting services. 

Web hosting also ensures easy access to your site on all devices and fast load times. If you lack technical skills, opt for a website builder like Hostinger or IONOS. But for comprehensive data collection, use WordPress. It connects easily with BI systems. 

3. Assemble the Right Team

Create a BI team in your company. It should have BI  data scientists, analysts, and architects. They will implement your business intelligence solutions so that they deliver value.

You can hire experts from platforms like Fiverr or Upwork for technical roles. Their expertise will save you time off work. 

4. Choose the Right BI Tools

Use BI tools with the specific features and capabilities you need. Also, ensure that you can afford it. Always go for tools that are easy to use, can scale easily, and integrate with other systems. 

If it’s your first time using them, choose self-service BI tools, then expand as your needs grow. Many businesses start with data visualization and reporting tools. Later, they began using those with predictive analytics.

For marketing, you can use Kit (formerly ConvertKit). It has built-in analytics tools that track how well campaigns do.

5. Foster a Data-Driven Culture

Train your staff so they know how to use the BI software. Encourage data-driven decisions in every part of the business. Promote data literacy so your staff can study and understand data and share insights.

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The Evolution of BI: From Past to Future

Before, BI was centralized and controlled by IT teams. Now, any trained person can handle it thanks to its self-service nature.

Future Trends in Business Intelligence

The following are rising trends that are shaping the future of BI:

• Augmented Analytics: AI and ML will automatically sort data, draft, and explain insights. With this, more people will be able to use BI.
• Composable Analytics: Users will be able to switch the components of BI apps. Hence, they can tailor their analytical solutions.
• Decision Intelligence: It will combine data science, AI, and traditional BI to improve the decision-making process. 
• Data Literacy: More brands will teach their staff to study data and gain insights.

Common Challenges in BI Implementation

Here are some bottlenecks you might face when applying BI to your business.

• Data Quality: Wrong or incomplete data leads to errors and bad decisions. So you must focus on data management to get the correct  BI data.
• User Adoption: Staff may resist change and stick with old methods. To avoid this, train them well, explain the benefits of BI, and choose easy-to-use tools.
• Data Silos: Silos form when the same information appears on many different systems. They make data integration difficult, so you must clean and sort data.
• High Costs: It’s expensive to get licenses and hire experts. However, the benefit is worth it. 
• Lack of Clear Strategy: Lack of objectives and aligned tools can cause failure.

Key Roles and Responsibilities in Business Intelligence

A successful BI team consists of experts with different roles. The most important are BI analysts, engineers, managers, and directors.

BI analysts study data and inform leaders about useful opportunities, patterns, and trends. Thus, they are the link between data and decisions. 

BI engineers control the setup for collecting and studying data. These setups include data warehouses and BI platforms, and integration systems. Their job is to ensure that data flows smoothly through the system.

BI managers and directors lead the team and create a BI strategy. They also oversee the use of business intelligence systems.

Business Intelligence vs. Business Analytics: What’s the Difference?

People use business intelligence and business analytics in place of each other. But each term has its focus.

Business Intelligence is the use of descriptive analytics to understand how things worked before and now. It tells you about events and their causes by studying past and current happenings. Hence, BI gives a clear view of operational performance.

Business Analytics uses predictive and prescriptive analytics. It used advances techniques to study data. Then it foretells future events and how to handle them. 

Business intelligence and analytics provide data insights, but with different aims. BI explains how businesses operate in the past and present. Business analytics builds on this to help brands shape their future.

As such, they both contribute to keeping brands ahead of competitors. Successful businesses merge both to achieve operational efficiency and strategic planning. Even online businesses use them to understand customers, function better, and scale. 

Implementing Modern Business Intelligence Solutions

Modern BI systems allow self-service and can handle large datasets from several sources. They work with structured data from old databases. You can also feed in unstructured data from documents,  social media, and emails.

Merging both types of data creates an all-around view of business operations. With self-service BI tools, users can form reports and study data themselves. Hence, it supports swift decision-making and reduces the work of  IT staff.

There are also cloud-based BI solutions. With these, small businesses can access comprehensive analytics without overspending. These platforms accommodate growth and are easier to use than on-premise solutions.

New BI systems are also available on mobile devices, allowing for on-the-go usage. Hence, business leaders are less likely to miss random opportunities. 

With marketing KPIs in business intelligence systems, brands can easily check performance. They can also use performance data to improve how they carry out digital marketing.

Conclusion

Understanding “what is Business intelligence” and applying it helps brands make smart business decisions. BI provides actionable insights that spur growth and create a competitive advantage.

 Maximize your ROI as you scale your business with data-driven insights today!

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Next Steps: What Now?

Do the following before using business intelligence systems:

1. Decide what you want to achieve with BI.
2. Consider your budget and needs when selecting BI tools.
3. Create a tech-savvy internal team to oversee BI processes.

Further Reading & Useful Resources

Read these resources to learn more about business intelligence:

1. Learn more about demand forecasting in business.
2. Discover five steps for conducting market research.
3. Find out how to perform competitive analysis.
4. Discover the types of e-commerce reporting and tools you can use.
5. Explore several ways to use databases.