Business intelligence usually refers to
computer software and other tools that collect all sorts of complex business
data for a company and condense it into reports. The collected data may focus
on a specific department, or give an overall view of the company's status.
Large corporations with huge amounts of data to process are most likely to
benefit significantly from business intelligence, though smaller concerns use
it, as well. Business intelligence may help a company identify its most profitable
customers, trouble spots within its organization, or its return on investment
for certain products. Although a companywide business intelligence system is
complex, costly and time-consuming to establish, when implemented and used
correctly, its benefits can be significant.
Fact-Based Decisions
Once a company-wide business
intelligence system is in place, management is able to see detailed, current
data on all aspects of the business -- financial data, production data,
customer data. They can read reports that synthesize this information in
pre-determined ways, such as current return on investment reports for
individual products or product lines. This information helps management make
fact-based decisions, such as which products to concentrate on and which ones
to discontinue.
Improves Sales and Negotiations
A business intelligence system can be a
valuable asset to a company's sales force because it provides access to
up-to-the-minute reports that identify sales trends, product improvements or
additions, current customer preferences and unexplored markets. Detailed and
current data is also a valuable backup to negotiations with suppliers or other
vendors.
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Eliminates Waste
A business intelligence system can
point out areas of waste or loss that may have previously gone unnoticed in a
large organization. Since a companywide business intelligence system works as a
single, unified whole, it can analyze transactions between subsidiaries and
departments to identify areas of overlap or inefficiency. According to the CIO
website, in 2000 "with the help of [business intelligence] tools, Toyota
Identifies Opportunities
Business intelligence can help a
company assess its own capabilities; compare its relative strengths and
weaknesses against its competitors; identify trends and market conditions; and
respond quickly to change -- all to gain a competitive advantage, according to
the Journal of Theoretical and Applied Information Technology. It helps
decision makers act swiftly and correctly in response to opportunities; helps
the company identify its most profitable customers, as well as potentially
profitable customers; and assess the reasons for customer dissatisfaction
before it begins to cost them sales.
Credit: by Mary Strain, Demand Media
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