By Nikhilesh Tiwari
Did you know that a manager in any organization spends an average two hours per working time hunting for data? Half of that information later turns out to be useless, says Cindi Howson in her book on business intelligence, released in 2007.
The sheer volume, variety and velocity of data coming in at any terminal is reaching unprecedented levels now. Data becomes information after it has been processed to add context, relevance and purpose. As companies segregate data into information cells and store them in different formats, one may find that there is vortex of data combinations formed by the billions of rows of data the company has collected and keeps adding.
Data generation is rapidly growing with collation of personal data, financial data, sales data, business data, accounting data, so on and so forth. Companies use various softwares like ERP, HRM, CRM, Tally, Salesforce, Web services, etc. for this purpose. Databases are also many such as MySQL, Oracle, DB2, Ingres, Postgres and MongoDB. It is from this data mix that a manager has to extract the right information to aid in making timely decisions to keep the company at the forefront of competition. However, even though there are different software and databases for data gathering, what is missing is an insight on the information. At this point, business intelligence plays a pivotal role in providing accuracy in information and views to profitable paths.
Business Intelligence (BI) refers to technologies, applications, and practices for collection, integration, analysis and presentation of business information. The purpose of BI is to support and improve business decision-making. A proper BI system helps with right information, at the right time, in the right format.
A single BI could help all the departments:
1. Marketing Department - Help in growing its topline with features like analyzing campaign returns, promotional yields, and provide solutions to expenditure for profitable ROI, and tracking social media marketing 2. Sales - Finding the best path and practices, customer acquisition cost, and improvement in yearly turnover and sales 3. Inventory - Monitoring and adjusting inventory levels 4. Human Resource - Tracking and managing employee turnover, attrition rate, recruitment process, etc.
Smart and efficient use of BI has delivered excellent results across sectors, be it healthcare, e-commerce, NGO, government, media, etc. - On an average, ROI is $10.66 for every US$1 spent on business analytics - The movie "Moneyball" that had 6 nominations at the Academy Awards, elucidated the efficiency of BI - FEBREZE marketing campaign is aided by BI; sales now hit over US$1 bn annually - Correct usage of BI can help in reducing opex by up to 50% - FT used high-end BI functionality to see growth of 20% - The US government uses BI to assign tasks to its police personnel
There are many parameters a manager uses to test a BI tool before selection
- Interactivity: - The various reports and dashboards generated should have a high level of interactivity. Let us say, if a person is viewing the total sales report, the report should be interactive and navigable enough for the manager to drill down to view specifications like product sales, time period, etc.
- Data Visualization: - It is important to have an accurate format for data visualization. For example, month on month sales would be represented in the form of line graph, component wise contribution would be displayed in the form of pie diagrams, etc. In case, the data is not represented in an appealing format... imagine a wheel of all shades of colours representing many small datapoints, drawing conclusions from such a DASHBOARD will become difficult and may lead to faulty decisions. Any BI tool should have really good data charting engines integrated within it.
- Connection to databases: - BI tool has the ability to fetch information by connecting to different databases and web services so that the right information is provided to the stakeholders. This can be implemented by the right ETL tools which should be an additional part of BI tool.
- Mobile BI: - With increase mobility among the workforce, there is rising demand to create a space for information on mobile phones, tablets, and other such devices. Hence, the reports, dashboards, mash-ups, etc are being rendered to be compatible with on-the-go devices.
- Ad-hoc Reporting: - The requirements of a business user and an IT person differ largely. This elongates the development cycle which creates a requirement for ad-hoc reporting. This helps the end business users to drag, drop, and configure their own set of reports, visualization, and analysis as per their requirements from the dashboard.
- Application Integration: - BI tool should be an easily integrable device, and should be compatible with the existing application/portal/software, irrespective of its developed software of PHP, Java, Ruby, C or any other platform.
- Predictive Analytics :- By using high-end algorithms and using historical data, predictions can be made like propensity of a customer purchase and his return, machine failure, sales expected, revenue expected, region wise sales, etc. With this system adaptation, a company is set to take on competition and maybe even create competition by being proactive. Apart from these features, there are other factors like speed, in-memory analytics, cloud BI, and security, to name a few more.
BI is an essential tool for companies to aid in taking concrete measures for growth. Elucidating with a simple household example: If one has an idea of how long one gasket of LPG lasts in a regular household, he will be able to order a new one in advance before inconveniencing the family. Now, the shopping list builds similarly with water, rice, sugar, spices etc. Expand this thought to a company where the requirements are much more and costs involved are very high! You don't want to make decisions to purchase the wrong ingredients or sell a right product to a wrong audience!
According to a survey, if a decision is made relying on data rather than pure intuition, the chances of succeeding are 79% higher. BI gives companies a more structured way to look at data while providing deep interpretations. It aids decision-making via real-time, interactive access to and analysis of important corporate information.
BI tools bridge gaps between information silos of an organization. A company which is not driven by metrics might not be able to understand the problem areas, whereas a company with BI has the capacity to access industry information and gain insight to the problem, and based on the data, a plan can be worked towards improving its business processes to rectify or avoid a problem, putting the company on a growth trajectory.
- Nikhilesh Tiwari is Co-founder, Helical IT Solutions