What is BI and how can it improve performance?

What is BI?

There are thousands of scenarios where your current systems / databases / spreadsheets may have answers to questions you might want to ask, but you have no easy way to get your answer from the data buried.

Questions like:

• Where are we losing money?
• Why are we not making as much profit as we used to?
• Which are our best customers?
• What activity costs can be associated with each customer and/or product and how does that affect its profitability for us? Are customers that we thought were profitable not really profitable at all?

As a business decision maker, you make decisions every day that affect how well your business succeeds. These decisions are based on your beliefs about your products, your customers, your staff and your competitors. These beliefs give you your answers to questions like those posed above. Currently, you may not be able to access the information that will prove your hypothesised answers. Or you can get information, but it’s in a few different systems and the information conflicts.

If you have an IT department, you could submit a request for a report to be developed that will give you the answer to today’s question. You may not get the report ‘til next week – at which time you spot some anomaly in the data into which you want to dig deeper, so you need another report developed.

If you don’t have an IT department, you probably have to make do with multiple reports that your system already has or the spreadsheets that your company already uses and try to cobble together the required information. This is difficult as you end up with several pages and you have to try to keep the whole picture in your head while you extrapolate the desired “answer”. In their most basic form Business Intelligence Systems do a number of things in order to resolve some of these issues:

• They collate information from one or more sources so that it is easy to search, analyse, display and share. Part of this collation process is automatically ironing out anomalies that may come from having data in multiple sources (e.g. two versions of a customer’s address).
• They maintain historical snapshots of the information so that the situation at any particular time can be retrieved for analysis.
• They display information in a user-friendly way on a user’s desktop or online.
• They inform users of possible problem areas identified in the data (e.g. low sales for a particular period).
• They allow users to immediately and easily drill down through any aspect of the data so that they may see what an underlying issue is and perhaps come up with a solution.

Additionally Business Intelligence Systems can

• Push dynamic reports to users as often as is required or only when some underlying problem with the data is identified.
• Maintain historical views of the data so that trends can be analysed.
• Provide different views of the data to different user-types.
• Provide forecasting abilities – that allow companies to create budgets and what-if scenarios extremely quickly.
• Track company-defined goals and quickly identify for users the areas where these goals are being met, being exceeded or not being met.
• Be used to manage the performance of an entire company, a team within that company or an individual worker.
• Recommend solutions to identified problems.