On its own, raw data doesn’t tell you very much. After all, it’s just quantities and numbers stored on a computer. It needs to be analyzed and put into context before it can be useful. At that point, data is transformed into information. When placed into business intelligence reports, your management team can interpret the information and use it as the basis for sound decision making. To bridge the gap between data and information, your business needs a quality enterprise resource planning system (ERP).
Business Intelligence Definition
Business intelligence comprises the tools and reporting needed to manage and utilize business data.
Companies today gather an extraordinary amount of data. Depending on the type of business and the industry in which it operates, data may be gathered through one or more of the following sources:
- Accounting and financial systems
- Enterprise resource planning systems
- Warehouse and inventory management systems
- Customer relationship management tools, including data from social media platforms, call centers, email inquiries, chats, and more
- Field service management tools
- Fixed asset management tools
- Independent suppliers whose systems may be connected with your company’s systems
- Human resources
- Website data, such as Google analytics, email tracking platforms, and marketing automation systems
Consider the average e-commerce business. It may have hundreds or thousands of SKUs to manage in the warehouse. This is in addition to the general operations and overall financial management of the company, the daily human resources needs, the marketing and communications, and so on. The average company generates an astonishing amount of data in any given workday.
Now, add to that the complexities of modern business. Communications have evolved from mail, phone, and in-person meetings to mail, phone, in-person meetings, email, chat boxes, social media channels (of which there may be many), texting, and so on. As business has grown more complex, the need to capture and analyze an extensive amount and type of data has grown alongside it.
Two Types of Business Intelligence Reports
Businesses take all this raw data and help make sense of it for the average user. It may fall into two general categories for business intelligence reports:
- Managed reporting, in which carefully planned and considered reports are run from the central business intelligence system on a regular basis, such as weekly or monthly. An example of managed reporting may be a weekly sales report generated for company managers and emailed to them automatically.
- Ad hoc reporting, in which users can set their own criteria and run reports as needed. An ad hoc report example may be a marketing manager who wishes to see how well a particular marketing campaign performs. She types in a date range and selects specific products that were promoted in the campaign, generating a report that displays sales figures for the date range and products to tell her whether her campaign helped sell more products during the campaign’s time period.
Within each of these categories, there is a wide variety of reports that can be run. And each report may be generated with specific data visualizations in mind—the displays that help transform raw numbers into pictures that can be easily understood.
For example, the marketing manager’s report may show raw numbers, but when she outputs it to a bar chart comparing the previous period to the sales period, it’s easy to see whether the sales period outperformed the previous period. If the colored bar is higher for the sales period, she may draw the conclusion that her marketing campaign influenced sales. It is much easier and faster to see this on a bar chart than it is in a column of numbers.
Creative Ways to Use BI Tools
So far, we’ve provided a few small examples of how reporting and business intelligence tools can be used to manage vast amounts of data. Leaders in many industries have found other ways in which business intelligence and data visualization can help them do their jobs better. (Get Smarter About Business Intelligence) Here are a few creative ways leaders have used BI tools throughout their companies.
- Performance Reviews: Google asked the question “Do good managers matter?” and decided to use data to find out. In their so-called Google People Analytics experiment, Google examined multiple data factors to determine which managers may be more effective than others. They looked at employee and peer reviews of managers and found the data supported the assertion that better reviews correlated to better job performance. Next, Google used data to examine the question “What makes a good manager?” by diving into data gathered on the best and worst managers. By examining performance data, performance reviews, and critical KPIs, they were able to develop eight criteria of good managers for their organization that could be measured through data and business intelligence.
- Retail and e-commerce: Examples abound of how leaders in both traditional retail and e-commerce use reporting and business intelligence to improve their businesses. Facebook, for example, offers a tool in which advertisers can track how well their ads prompt visits to their stores. Multifaceted data collection is used in business intelligence tools to provide detailed reports and results. Another e-commerce shoe store brand found that shoppers preferred a two-click checkout process over a simple one-click process. Customers wanted to look at their shopping carts before clicking “Pay.” These are just a few examples of how data, collected from various sources and analyzed using business intelligence tools, improved retail leaders’ ability to make decisions impacting sales.
- Helping customers choose products: Stitch Fix, a company offering personal clothing shopping services, uses a combination of a human stylist and a business intelligence-informed algorithm to help pick winning clothing combinations for customers. Business intelligence in this case is used for hyper-specialization, with data collected on customer preferences over time to refine clothing selections and reduce returns.
- Encouraging repeat sales: Starbucks, the ubiquitous coffee chain, used data it collected nationwide to enhance its app, resulting in repeat business. By using data collected from thousands of purchases nationwide, the company can encourage add-on purchases of muffins and baked goods by suggesting specific combinations and by encouraging frequent customers to buy more.
- Data-driven insights: NaviStar captures over 100 data points from each of its trucks as part of its fleet management program. The company tracks this data using business intelligence software to better manage mileage, performance, and maintenance schedules. Overall, the company has found that this use has helped reduce downtime and unexpected breakdowns, thus increasing profitability and on-time delivery.
Let PositiveVision Help You Find the Software for BI Reports
Several ERPs are equipped with BI or reporting capabilities, but the right software can save you and your team a significant amount of time (and money) when preparing business intelligence reports. If your business is gathering data from several sources and needs to perform managed and ad hoc reporting, Positive Vision can assist you with finding the right ERP software for your current needs that will grow with your business.
To learn more about the available software solutions and find out which options would be the best fit for your business, contact us today to speak to a product expert.