Business intelligence could be the only thing holding you back
At the start of 2010, business intelligence (BI) was only used by companies with big IT staffs and big budgets. However, as we enter a new decade, BI is now available to any company that wants to do things better — no matter how small.
The growth of accessible and affordable BI tools has created a completely different landscape. Real-time business-crucial data isn’t reserved for Fortune 500 companies. It’s now within the reach of nearly any small or medium enterprise (SME) in nearly any industry.
In fact, SMEs now have a higher BI adoption rate than larger companies.
Here is a broad view of what BI is and how your business could benefit from it.
What is business intelligence?
The term BI typically describes the use of software to collect and sort any type of data, then determining how it can help your business. You may hear the terms “business intelligence” and “business analytics” used interchangeably. However, they are different things.
BI examines current and historical data. It looks at what your business is doing today and how you have arrived at this point.
Business analytics, on the other hand, is more future-focused. It examines data to try to predict what will happen to your business, or what you should be doing to ensure the best possible outcomes.
Examples of business intelligence
The most obvious examples of BI would include any number of sales metrics. And these are very valuable, as they tell businesses how well they’re doing. However, those are far from the only numbers that could make or break a business.
A shipping company’s BI could include numbers like:
- What types of products are seeing the biggest delays
- Which geographic areas are having the most problems
A construction company may be looking at completely different numbers. Their success isn’t so much driven by front line sales as front line safety. Their safety record is what helps them get the next job, and the job after that.
Construction companies track the number of near-miss and lost-time incidents to learn where they need to improve.
You can create dashboards and reports to examine any data that your company can collect.
How small enterprises can use BI
Quite simply, BI can be used to spot opportunities or fix problems in any sector.
A pet supply company could boost sales by:
- Looking at their customers’ buying patterns
- Figuring out the best time to send reminder emails
- Looking at when the greatest number of leads fall out of their sales funnel
How do you do this? You use your business intelligence software to generate:
This is one of the most popular features of nearly any software solution. This is where you get a top-level view of your most important numbers.
Your dashboard gives you a central and simple place where all of your users can get the information they need. This ensures that everyone is on the same page and gives you a clear line of sight into your progress towards daily, weekly, monthly or yearly goals.
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2. Key performance indicators KPIs
Your KPIs are the statistics that you have defined as the most predictive of your company’s success. They are likely unique to your company, and may change as your business changes. They could include:
These are often input-oriented numbers that you can easily influence. To use an analogy, if you were trying to lose weight they could be calories burned or consumed.
These are often the output numbers that are harder to influence. This would be the number on the scale while you’re trying to lose weight.
Your KPIs help you look beyond the simple profit and losses to see the numbers that really drive your success.
Who uses business intelligence?
The insights derived from BI can help business leaders make more informed and educated strategic decisions. How this information arrives in their hands will vary from organization to organization.
In big corporations, you might see department heads gathering their own KPIs and reporting them upward to executives. Sales would report their KPIs, marketing would report theirs and so on.
BI doesn’t have to travel through as many layers to reach decision-makers in SMEs. This is a huge advantage.
SMEs are smaller and more nimble, so they can react quickly to the insights gleaned from business intelligence. They can take action to fix a problem or take advantage of a new opportunity without delay.
Fewer levels mean fewer stakeholders who need to sign off on a major change or initiative.
The challenges of adopting a BI solution
The most obvious issue will always be training your staff how to properly use your software solution.
You hired your team because of their sales acumen or their marketing expertise, not because of their ability to gather and report data.
This means introducing a BI solution will likely require a considerable amount of training and onboarding before you start to see a return on your investment.
However, it should be fairly easy to get buy-in from your team if you tell them they will now have the tools to make a business case for anything they may need. They will have the numbers to prove they need to hire more people, or upgrade their IT infrastructure.
Knowledge is power
Think of it this way. If you’re not making decisions based on BI, your competition most likely is. You will most certainly want to adopt BI to avoid being left behind.
Once you do, you will have access to the dashboards and KPIs you need to make more informed decisions.
It may take you a bit of time to figure out how to make BI a part of your standard operations. However, you have an advantage as an SME in that you can quickly react to what you learn to gain ground in your marketplace.
Click here for a comparison of five BI software tools for your SME.