Whenever they hear the term “business intelligence” (BI), owners of small-to medium-sized businesses (SMBs) might be under the wrongful impression that it is a solution meant to be implemented only by major corporations and large enterprises with multi-million rand budgets.
The truth is that BI is crucial to anyone who wants to keep track of all aspects of their business’s performance – be it a major conglomerate or a smaller establishment with less than 100 employees. After all, it doesn’t matter how big or small a business is, in the end they all work towards the same goal: to increase revenue.
Still not exactly sure what BI is? It is basically an umbrella term that describes a variety of software applications that enable an organisation or company to pull important data from the various operational systems in their business (such as sales, supply, management, finance – in short, everything that makes their business tick) and to integrate and analyse it; thereby turning it into the knowledge that can be used to make critical business decisions.
The BI data is often presented in the form of graphs and charts in screen-based dashboards that are easy to understand, enabling users to visualise all the data.
BI can be beneficial to businesses in a variety of ways.
It can be tailored to help small business users determine who their most valuable customers are, what aspect of their service/product has been and still is the most profitable, how their business has performed in the past, how it is currently doing and what steps can be taken to boost performance in the future, as well as how they can reduce cost and get a faster return on investment (ROI).
For example, BI will show the business owner up-to-the-minute sales figures, inventory levels and consumption trends. That way, they can delay reordering stock until it is actually needed. Likewise, by having a more visual implementation of the data, business owners will quickly discover where their business is haemorrhaging money and take the steps necessary to cut back costs and save.
BI can even help business owners to determine which location their business should be based in to be the most profitable and attract the most customers. If they want to expand or branch out, they can use the BI analytics to find out how much it will cost to open shop in a new area.
Businesses that are not taking the trouble to obtain this kind of information could soon fall behind the competition. Not everyone has the budget to hire the services of a market research firm, so implementing a BI system is a cost effective way to acquire that same knowledge.
Speaking of cost: until just a couple of years ago, SMBs with limited budgets would not have afforded BI systems even if they had wanted to implement it. However, with the rapid consumeration of BI tools – due in part to the fact that it has become more user-friendly and is not comprehended only by IT professionals anymore – it has become far more affordable than ever before.
According to global technology research and advisory company Gartner, BI was the second-fastest growing enterprise software market of 2011, with 16,4% year-over-year sales growth (from $10,5-billion to $12-billion). The International Data Corporation (IDC), which is a worldwide provider of market intelligence, advisory services and events for IT, predicts that the analytics market will reach $33,9-billion in 2012.
This upswing in BI adoption and its continued growth projection come as no surprise. After all, BI tools provide users with valuable knowledge about their companies and empower them to take action to run it as effectively as possible.