What is business intelligence?
Business intelligence or BI can be defined as a process that mostly applies technology and specialized expertise to analyze and present data. This is meant to help corporate executives, managers, administrators and other end users make more informed corporate decisions. It involves a wide variety of tools, applications and procedures that enable organizations to amass data from internal systems and external sources, organize it for analysis, develop and run queries against the data, and create reports, dashboards and data visualizations to make the analytical results available to corporate decision makers in various departments in an organisation whether in finance, operations, human resource or marketing.
BI encompasses data mining, process analysis, performance benchmarking, descriptive analytics, and prescriptive analyses and so on. Business intelligence is meant to take in all the data being generated by an establishment and present easy to digest performance measures and trends that will inform management decisions.
How did Business Intelligence come about?
Well, business intelligence developed out of the stance that business executives and managers with inaccurate or incomplete information will tend, on average, to make worse decisions than if they had better information. Let’s say you are in charge of procurement at a fast food joint in a busy location in Nairobi CBD, the fast food joint orders 89 to 96 bags of potatoes on a daily basis and on the busiest day the highest number of bags consumed is 97 bags. Business intelligence helps eliminate the guess work in the of the number of bags needed each day depending on a number of factors and managers who are the primary creators of financial models will identify this as a “garbage in, garbage out” problem. Business intelligence is meant to solve that problem by bringing in insights using the most current data that is ideally presented in a dashboard of quick metrics intended to support better decisions.
If, for example, you are in charge of production schedules for several water-bottling companies and sales are showing strong month-over-month growth in a particular region, you can approve extra shifts in near real time to ensure your factories can meet demand. Similarly, you can quickly idle down that same production if a cooler than normal period starts impacting sales. This is just a simple example of how efficiency analysis through business intelligence can increase profits and reduce costs when used appropriately.
What of the growing field of business intelligence?
To be worthwhile, BI must pursue to increase the accuracy, timeliness, and amount of data. This means finding more ways to capture information that isn’t already being recorded, checking the information for errors, and organizing the information in a way that makes extensive analysis possible. In practice, however, businesses have data that is coming in unstructured or in dissimilar formats that do not make for easy gathering and analysis. As a result, software companies provide business intelligence solutions. These are enterprise level software applications designed to unify a company’s data and analytics.
Even though the software solutions continue to evolve and are getting easier to use, there is still a need for analytics specialists like HMC Consulting Kenya to make sure the trade-offs being made between speed and reporting depth are reasonable. Some of the insights coming out of big data have companies scrambling to capture everything, but data analysts can usually filter out sources to find a selection of data points that can be representative of the health of a process or business area as a whole. This can reduce the need to capture and reformat everything for analysis, which saves analytical time and increases the reporting speed which is paramount.
In North America and Europe, many companies depend on business intelligence to support functions as diverse as operations, compliance, production and marketing and this is where Kenya is heading too.