Technically Business Intelligence (BI) is defined as the use of computing technologies for the identification, discovery and analysis of business data such as sales revenue, products, costs and incomes. In simple terms BI can be described as the set of techniques and tools for the transformation of raw data into meaningful information for improvement of different aspects of the business.
Although BI is a very straight forward practice but most of the entrepreneurs still think that BI requires complex tools and only large enterprises can benefit from it, however this is not true, in fact BI is for everyone. Few years ago BI tools had some degree of complexity and there was dependency on IT professionals, however now most the business intelligence applications are cloud-based and are ready to use without any specific hardware or implementation requirements. Their interfaces, dashboards and reporting capabilities have improved radically, making them very user-friendly and easy to manage.
A recent survey conducted in August 2015 showed that entrepreneurs are more comfortable with BIas compared to large enterprises because Entrepreneurs have the ability to be agile and react faster to freshly uncovered insights and make true data driven decisions, which simply creates competitive advantage over slow-moving and larger enterprises. Entrepreneurs must understand that goal of BI is easy interpretation of large volumes of data for identifying new opportunities and implementing an effective strategy with a competitive market advantage and long-term stability.
Here are some important roles of BI for entrepreneurial ventures:
1) Understanding dynamic trends:As Entrepreneurs believe in continuous innovation, they must be aware of dynamic trends in marketplace; BI helps entrepreneurs to eliminate the guess work and understand the latest trends pertaining to consumer behaviour by tracking customer buying habits, preferences and rejections.BI allows Entrepreneurs to leverage customer data to build, refine and modify predictive models that helps in up-sell and cross-sell products to appropriate customers. In addition to this, BI also enables entrepreneurs to assess their own capabilities; compare relative strengths and weaknesses against their competitors
2) Cost Efficiency: Many Entrepreneurs spend a lot of time in collecting and interpreting data from various sources so that they can reduce waste and increase efficiency, however the whole process is time consuming and requires multiple softwares to get desired results, on the other hand, in BI systems all the information is centralized and can be viewed in a dashboard or turned into a report, saving enormous amounts of time and eliminating inefficiencies. Since BI platform works as a single, unified and integrated system, Entrepreneurs are able to point out areas of waste or loss in real time which ultimately helps in reduction of manual and repetitive work in day to day operations thereby boosting cost efficiency in timely manner.
3) Empowered Staff with better performance: BI systems enhance communication among departments, coordinate activities, and enable employees to respond quickly to changes. In other words BI users can quickly get data driven key answers to business questions, rather than spending hours reading through volumes of printed reports. When a BI system is well-designed and properly integrated into a company’s operations and decision-making processes, it directly improves employees performance. Today, many business intelligence software vendors are making it possible for users to access key business metrics, reports and dashboards on mobile devices too, giving sales and marketing people access to critical business information anytime, anywhere.
4) Make Better Decisions even faster: Entrepreneurs have to take hundreds of decisions everyday and they cannot always rely on their gut feeling, one must understand that decisions have varying quality, good decisions can provide tremendous benefits but at that same time bad decisions can incur losses. BI helps Entrepreneurs to see detailed, current data on all aspects of their ventures such as financial data, production data, and customer data. They can read reports or view graphical representations that synthesize this information in pre-determined ways, such as current return on investment (ROI) reports for individual products or product lines. This information helps Entrepreneurs to make fact-based decisions, such as which products to concentrate on and which ones to discontinue. At the same time the faster information is another key to respond threats and opportunities effectively. BI shortens the time between thought and action by combining multiple data sources in common reports using pre-aggregated data or other techniques for faster data aggregation.
Limitations of Business Intelligence:
Although some BI platforms are open source and arefree to use but they only provide basic features and user has to pay for more advanced facilities. For small ventures a paid BI system sometimes proves costly and eventually affects their ROI. Many organizations that have large number of blue collared employees need to train their staff which results in huge monetary expenses and still the output remains questionable.
Secondly all the information or data is stored in computers with internet connectivity; hence there is a huge risk of data theft. Everyday thousands of malwares, spywares, viruses and worms gain access to unsecured computers and steal valuable information without knowledge of the user, therefore BI systems and related data should be properly stored and secured, users must install necessary security features to avert illegal and unauthorized access to their computers, devices and networks.
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