Business Intelligence (BI) is a set of technology-supported processes to analyze data and present a panorama of business information to support managers and professionals in making better decisions.
The purpose of BI is not to provide answers to any specific question but to generate concrete information and deep analysis that are used as a starting point for positive changes in the company. You can do business intelligence consulting to ensure your business is on the right track.
It is necessary to understand the importance of a data-driven culture, in which the organization is data-driven and maintains practices and tools in its routine to build a solid database. The data can come from external sources, such as economic indicators, statistics, and surveys, and those generated internally according to the company’s activities, gathered, for example, in spreadsheets, CRM (Customer Relationship Management) programs, or ERP systems.
How does BI work?
Business Intelligence encompasses a variety of tools, applications, theories, and methodologies that help companies make smarter, data-driven decisions.
BI works in 4 steps to transform raw data into actionable insights and information. Let’s understand a little more below:
1. Data collection
Data is extracted from different sources, as we mentioned earlier, and processed to be stored in a single place, called the Data Warehouse.
In this way, the manager has a comprehensive set of data that will help in the creation of efficient business indicators for consultation and analysis.
2. Data analysis
This step looks for patterns and exceptions that provide insight into the current state of the business. This is accomplished by the Data Mining process.
BI tools present the patterns found in various types of data modeling, such as exploratory, descriptive, statistical, and predictive, which makes it possible to predict trends and identify inconsistencies.
3. Data visualization
Now, to facilitate the understanding of the information found, it is essential to have a BI tool that delivers good visual communication.
Here, data is presented through analytical reports, summaries, graphical dashboards, maps, and other visual representations so that managers, executives, and other professionals can quickly consult and understand the results of the analysis.
4. Decision making
Finally, with the display of current and historical data related to the company’s operations, processes, sales, and other activities, the manager can assess the business situation in real-time, obtain insights and take action.
What is the importance, and what is the purpose of Business Intelligence?
For a company to remain competitive, it is essential that it handles data strategically. There is no more room for “guessing” in an environment of digital transformation, in which we are increasingly inserted.
A few years ago, managers had to do the entire business analysis process manually, taking time to identify failures and missing the timing for opportunities. Business Intelligence saves time and effort for management since, through data collection and analysis, it is possible to obtain valuable information for the business.
With BI, managers can act preventively, by seeing anomalies or divergences, instead of acting only in the correction of failures. In addition, BI optimizes processes, provides benchmarks, and makes it possible to share analyzes between departments.
Practically, Business Intelligence can be used to:
- Bring greater efficiency to operational processes;
- Know customer behavior and identify purchase patterns;
- Monitor sales and financial performance in a concrete way;
- Discover new business opportunities;
- Identify where there is overspending and reduce costs.
Every organizational institution has goals, objectives, and questions to be answered. To answer these questions, develop their goals, and track their organizational performance, they collect the data they need, analyze it, and determine what they need to do to achieve their goals and objectives. BI can help businesses make better decisions driven by data collection.