Technological advancements allow companies to have access to more information about business processes and customer behavior than ever before. Knowing how to utilize and manage these multiple sources of data to a company's benefit can be a challenge. Software tools that automate the organization and storage of data make it easier for employees to conduct analysis and track the company's performance.
Business intelligence reporting tools are a solution for those who want to better understand their customers, improve project management, track trends that affect revenue and improve operational processes. To understand how BI tools can be leveraged, it's important to know how they work, why they are needed, tips on picking the right one, and some best practices for utilizing them.
Business intelligence is an umbrella term that encompasses the processes and tools utilized to track, manage, and analyze data. BI reporting is one example of a software solution that works by monitoring key performance metrics and evaluating them.
Companies utilize BI tools along with internal and external data sources to learn about market trends, financial trends, customer demographics, employee information, or anything else that affects their performance. By having up-to-date, relevant data in one, accessible place, it eliminates the need for guesswork and instinct-based decision-making.
ETL tools (Extract, Transform, Load) are utilized to extract raw information (data that records daily activity of an organization) from different sources, such as web platforms (social media), Google Analytics, or Salesforce, and then cleanse and copy it into one warehouse so users can access it. In short, BI applications bring all of the different sources together in a unified view so employees can create reports (summaries of data), and perform analysis (answer the how/why behind the data).
BI systems work by ensuring that the right information is delivered at the right time to the proper person so it can be turned into workable knowledge that solves problems and improves business processes.
Some of the benefits of business intelligence tools include-
1. Relevant & Accurate Reporting
Reporting solutions incorporate the most up-to-date data from internal sources that convey day-to-day business activity and customer transactions. Some of these sources include web platforms, customer relationship management systems or Salesforce. Users can then access this information to generate actionable insights and make accurate, customized reports. To better exemplify the data found, information can be displayed in the form of visualizations such as charts, graphs, and tables.
Because reporting takes the most pertinent, newest data into account, reports reflect how well the company is performing in real-time, which allows managers to target where additional support is needed, see how the company is operating today in relation to long-term goals, and make decisions based on the most relevant information.
2. Informed Employees & Better Collaboration
BI tools consolidate information from across the company in one location and provide tools such alerts so activity can be monitored in real-time. Management can give designated employees access to the information they need in their department for self-service analytics purposes, and alerts can be sent to workplace computers or sometimes mobile phones.
This allows for easier collaboration between employees because everyone has access to the same information and updates are sent to the right people at the right time. Because everyone is on the same page, they can collaborate on projects knowing that their decisions are based on reliable information.
When choosing a business intelligence reporting system, it's important to take the following steps-
1. Identify & Communicate with Stakeholders
By identifying who will be utilizing the BI reporting system and what their key objectives are, the company can make a list of important criteria that will help determine the right tool. Here are some questions to consider-
- How many employees will be using the system?
- What is each group of stakeholders' primary business objectives?
- Which insights would help improve job performance?
- What kind of data sources do each department and stakeholder utilize?
- What is frustrating about the current data analytics system utilized by the company?
- What are the stakeholders' individual technical capabilities?
- How often will employees from each department need to interact with the system?
Next, it's important to consider the complexity of data sources utilized and the company's specific technology requirements. Factors to consider are-
- Data Source Integration - Data integration is the process of combining different sources of information into one, unified view. Its primary objective is to produce clean, consistent, consolidated data sets and put it into one place so different users within an organization can access it.. Ensuring data is cleansed and collected through the utilization of ETL tools (Extract, Load Transfer), allow employees to have access to reliable information.
- User-Friendly Components - The BI component most frequently utilized is dashboards, or user-interfaces that offer at-a-glance views of how a company is performing. Employees should be able to easily navigate the dashboard to find the information they need, without having to constantly seek assistance from IT.
Companies should research different BI system vendors to establish which meet their selection criteria. Here are some questions to consider-
- How user-friendly is the system?
- Can it easily connect to other data sources?
- How strong is its core functionality?
- Which system is best at performing the predictive analysis?
- Can the system be accessed on mobile devices?
1. Business Performance Management
This application reduces the focus on financial numbers as the sole indicator of how the company is performing. Instead, the user can see the driving factors that affect each department's key performance metrics. Some advantages include-
- Providing an overview of how the company is performing at a glance
- Understanding the variables behind the company's financial results
2. Online Analytical Processing Tools
OLAP (Online Analytical Processing) tools drill-down through large quantities of data so employees can understand the market and financial trends that affect business processes. Some capabilities of OLAP tools are-
- Business-Focused Multidimensional Data - Data is organized into dimensions or categories that make for easier analysis. Examples of categories include the type of product, market (state/franchise/region), and time (year and month each product was sold.)
- Speed of Thought Analysis - Analysts can pose questions and receive immediate responses from the OLAP system. The answers are also more specific due to the multidimensional organization of data.
3. Reporting Tools
Reporting tools allow employees to make customized reports that summarize a set of data related to business processes. Some benefits of reporting tools include-
- Connects to different data sources, extracts information, and puts it in one, accessible place.
- Increased understanding of risks and business opportunities
- Filters, sorts, and groups data
- Pixel-perfect formatting
4. Predictive Data Analysis
This tool can be used to make accurate predictions based on new data so owners can make better business decisions. For example, predictive analysis tools can examine internal and external financial/market trends to determine how the business might perform in the next quarter. Some benefits of PA tools are-
- Improve efficiency in production
- Provides competitive analysis to gain advantage
- Reduce risks
- Improves marketing campaigns
- Ability to meet consumer expectations
5. Business Analytics
BI analytics tools explain why a situation or problem occurred. An analysis is used to identify weaknesses, strengths, resolve problems, forecast future results based on historical information, and alert decision-makers about potential concerns. The different types of analytics are-
- Descriptive Analytics - The descriptive analysis may include real-time information on customer demographics, purchasing behavior, or sales and financial data.
- Predictive Analytics - The predictive analysis forecasts events by estimating the value of new data based on learning from historical information.
- Prescription Analytics - Utilizes predictive and descriptive information to make evaluations and offer potential solutions to problems.
To receive the most benefit from BI software, it's essential to recognize the processes and tools required to handle data and analytics. Some best practices for maximizing BI tools are-
1. Receive Feedback
Companies should identify and collaborate with the different departments and stakeholders to discover what their critical business needs and goals are. Knowing the business goals and objectives of each stakeholder and understanding what users need to see in reports can help businesses pick the right tool. Make sure to choose software that best matches with the company, all employees, and the IT infrastructure.
2. Build a Data Warehouse
A data integration layer is when raw data, or data that has been consolidated through the removal of duplicated records and values, is put into one place, or a warehouse. To optimize this process, a company should utilize the proper ETL software (Extract, Transform, Load). Reliable reporting and analytics are dependent on having quality, non-duplicated data.
3. Apply Role-Based BI Reporting
Personalizing reports, analysis, and dashboards based on each employee's preference that are utilizing the BI tool allow them to see the analytics that is relevant to their personal responsibilities. Proper role-based BI reporting tools can adapt to business changes as they come, making it easy to add, delete, and customize data for employees as they come and go. Employees can personally see the results of feedback for their customer interactions and how it relates to overall company objectives so they can then act, when necessary.
4. Start Small
First consider what business questions need to be answered with the available data, and what users actually need from BI tools. Consider the practical applications of delivering business intelligence tools, discuss which information delivery avenues are most effective for the organization (dashboards, OLAP, reporting, etc.). After a software is chosen, test the business intelligence in small groups or among certain departments before implementing it across the organization.