The amount of data generated by your business presents a wealth of opportunity. The only question is, what do you do with it?
Sales data, marketing results, and other business intelligence KPIs can help your enterprise make smarter decisions and set growth strategies that beat your competition. There are many business intelligence tools on the market that can help you outperform your historic results – but, most experts warn that self-service business intelligence has a few pitfalls.
There’s a time and a place to bring in an agency partner to do the heavy lifting of managing your business intelligence – as well as to bring in business analytics expertise that takes you from present to future planning, and from reactive decision-making to proactive strategic thinking. Here’s how business intelligence software stacks up against human business intelligence expertise.
What is business intelligence?
Business intelligence is a practice that uses data to derive actionable insights to inform strategic and tactical business decisions, helping companies of all sizes beat their competition. Business intelligence, commonly abbreviated as BI, involves the use of services and tools to analyze big data sets into easily-digestible reports with detailed intelligence about the state of the business and the market at large.
“Although business intelligence does not tell business users what to do or what will happen if they take a certain course, neither is BI solely about generating reports,” reports CIO. “Rather, BI offers a way for people to examine data to understand trends and derive insights by streamlining the effort needed to search for, merge and query the data necessary to make sound business decisions.”
No matter whether a business works with a business intelligence firm or a software tool, data is an absolutely critical input for accurate, usable business intelligence. Experts at The Economist, recently reported that the world’s most valuable resource is no longer oil – it’s data. “Smartphones and the internet have made data abundant, ubiquitous and far more valuable. Whether you are going for a run, watching TV or even just sitting in traffic, virtually every activity creates a digital trace—more raw material for the data distilleries,” said their report.
Business intelligence is a huge category, and there are many different ways to go about analyzing data. Choosing a business intelligence solution – whether it’s working with a human agency or software tool – depends largely on the data you have, who will be handling the data, and what you wish to accomplish with your business intelligence.
What does business intelligence software do?
BI solutions can offer a wide range of benefits and are essential for better decision-making and strategic development. Virtually every part of your organization can take advantage of business intelligence – there are a wide range of tools available that can tell you information about everything from your supply chain to your marketing and sales. Here are a few examples of what business intelligence software can do for your business:
- Measure the results of a marketing campaign
- Tell you about your cash flow, gross margins, and operating expenses
- Track HR business intelligence KPIs like employee turnover, absenteeism, and key recruiting metrics
- Keep track of supplier performance, inventory management, and material pricing
- Optimize your customer service call center staffing, as well as other hourly employee scheduling
- Forecast revenues and uncover new revenue-generating opportunities
It’s important to note that business intelligence tools simply provide reports and deeper insight into your business data. While there are some indicators you can use to make quick decisions, most businesses need a dedicated team or expert to make sure the reports are digested and used most effectively.
“Typical business intelligence software comes with access to various modes of advanced data analytics, including predictive analytics, data mining, statistical analysis, text mining, and more,” explains RingCentral. “In many circumstances, advanced analytics projects are managed and conducted by teams of data scientists and statisticians, while the BI teams oversee things like the analysis and querying of business data.”
When does it make sense to partner with an agency? Most business intelligence agencies use the same business intelligence tools that you would use in-house, but bring to the table expertise and resources that your enterprise can take advantage of.
The drawbacks of business intelligence software
So-called “self-service BI” has been on the rise for many years, with more enterprises incorporating BI technology into their internal departments rather than outsourcing BI to experts in the traditional model. If you don’t have a dedicated business intelligence team, there are a few drawbacks to self-service BI that businesses should consider when deciding whether or not to partner with an agency.
First, when different business teams perform their own intelligence reports, they may use different metrics and definitions by which they measure success. One former executive at Yahoo describes how the company’s internal teams had myriad ways to define and measure ad impressions and visits: “Everyone calculated them on their own…It’s a problem because now the business is not aligned. They’re all telling different stories. That causes a lot of consternation. They don’t trust the numbers anymore because people have come up with their own definitions to satisfy their own goals.”
In-house business intelligence also forces users to quickly become experts at data analytics – a practice that isn’t always easy to pick up. There are two learning curves your employees need to overcome: first, learning enough data science to make sure the correct inputs are being calculated to give actionable insights. Second, users need to become experts in a business intelligence tool – which isn’t intuitive. It’s more effective to outsource this work to an agency that’s well-versed in these tools and practices.
And, practically, the costs of in-house business intelligence software start to add up: it costs time to analyze data and licensing fees for using software tools. Most BI tools charge per user, and as your organization scales, costs also increase accordingly. In addition, the cost of human labor starts to add up.
Business intelligence is a limited field of work: partnering with an agency also allows you to see the benefit of business analytics, and ancillary practice that takes your data and gives you predictive insights.
When to work with an agency: business analytics
There’s a difference between business intelligence and business analytics – and this difference is where human expertise can significantly help your business.
“Business intelligence is descriptive, telling you what’s happening now and what happened in the past to get us to that state. Business analytics, on the other hand, is an umbrella term for data analysis techniques that are predictive — that is, they can tell you what’s going to happen in the future — and prescriptive — that is, they can tell you what you should be doing to create better outcomes,” says CIO.
Good business intelligence tells a story. Sometimes we get so wrapped up in the statistics we forget that, at the end of the day, humans are the ones creating the data. Analytics capabilities give us a level of empathy for our customers that’s unachievable using software alone.
As your enterprise considers how to improve your business intelligence, consider how an agency partner can lead to stronger ROI. The cost-savings of outsourcing this work alone could significantly improve your bottom line, while the benefit of growing your business intelligence is priceless.