Blog / Business Intelligence for SMBs
No doubt you’ve heard of the concept of business intelligence by now. It’s an old idea that has gained new recognition in recent history thanks to our modern interconnectedness and computing power. Once used solely by big brands and large multinationals, business intelligence has evolved dramatically over its surprisingly long history and is now a common tool used by businesses of all sizes to harness the power of their data.
But what is it?
At its core, business intelligence (BI) is about using all of the best information available to a company to make the best decisions about its future endeavors. This concept is hardly new or revolutionary, and the term “business intelligence” can be traced all the way back to 1865 when it was used in an encyclopedia about historical business anecdotes. The term was later used by IBM researcher Hans Peter Luhn when he published A Business Intelligence System, and he was later named the father of business intelligence. However, it wasn’t until 1989 when Howard Dresner created the now commonly-accepted definition as “…concepts and methods to improve business decision making by using fact-based support systems”. Even so, that definition didn’t become popular until nearly a decade later.
Then came the early ’00s and the rapid growth of the internet and social media. The amount of available data that users were creating grew quickly, and business intelligence, an already important—if relatively unknown component of big business strategy—took its place as an essential strategy for businesses of all sizes and markets. Businesses began harvesting huge amounts of data, and subsequently needed tools to manage it.
Which brings us to today! History lessons aside, the modern concept of business intelligence now refers to the process of gathering, preparing, managing, and visualizing your data to better understand trends and make data-driven, fact-based decisions.
That sounds a lot like Business Analysis. How is Business Intelligence different?
The simplest way to describe the difference between business intelligence and business analysis is the difference between describing and predicting. Business intelligence uses past and current data to show the current situation. Business analysis, on the other hand, uses data to predict trends and help plan strategy.
As a simple example, let’s assume your business is in industrial parts and supply, and you’re suddenly selling many more pipes and valves than usual. Business intelligence tells you that sales have spiked in the last few weeks and most sales have been delivered to northern Alberta, and so you should focus on producing and meeting demand for that sector and in that area. Business analysis, on the other hand, may tell you that the spike occurred because of planned shutdowns and seasonal maintenance, so you can better predict how much stock you’ll likely need to keep/produce in the future.
It sounds expensive and complicated.
Strong business intelligence practices used to be the exclusive domain of large firms who could afford expensive consultations and teams of employees to gather, aggregate and analyze data. Even the task of procuring relevant data was expensive and time consuming.
Times have changed! Today, even the smallest business can reap an incredible amount of useful data quickly and easily. Most of your current customer software applications (ie: QuickBooks, Sage Accounting and others) keep detailed records of information that is often overlooked as sources of valuable data. But you can also track website visitors and social media channels to further enhance your data gathering efforts. There’s also the ancient art of face-to-face conversation to consider; talking directly to stakeholders in every department will give you a better understanding of what data you have access to, and how to better capitalize on opportunities to improve efficiency, advance your market position, and grow your brand.
So how do we get started?
Online self-service business intelligence tools have quickly evolved so that that business intelligence is now cost-effective for everyone. Even small businesses can collect enough user data to make it worthwhile. Like many current software applications, most business intelligence tools are available as both a free service and as a paid subscription. Microsoft BI is just one of several options with a user-friendly interface and powerful core features that most businesses can utilize. Even the free version has a powerful suite of tools that include commonly used reports and report suggestions baked directly into the software. You could find it valuable to check statistics such as which clients bring the most business, which days of the month (or months of the year) are most profitable, and which of your website landing pages generate the most interest and visitor retention. This valuable information helps you analyze your business operations from several different vantage points.
Despite what many say, harnessing data is not the future of the business world, because that “future” has already been here for a while. Making the most out of the enormous data stores is how small business can make smarter, more profitable decisions while keeping BI costs in line. To learn more about the business intelligence tools available to you, and how to deploy them to help your business grow smarter, contact your TRINUS account manager.
The TRINUS team.