Business intelligence is a part of applications to retrieve, storing, analyze, and provide access to data to help company to make better decisions. Example of activities using business intelligence is decision support system and online analytical processing, data mining, reporting and forecasting. According to Ryan Mulcahy (2011), Business intelligence, or BI, is an umbrella term that refers to a variety of software applications used to analyze an organization’s raw data. Furthermore, Companies use BI to improve decision making, cut costs and identify new business opportunities.
BI is more than just corporate reporting and more than a set of tools to coax data out of enterprise systems. For example, CIOs use BI to identify inefficient business processes that are ripe for re-engineering. From the author’s point of view, BI allows organizations to get a more accurate and detailed picture of what is going on in terms of business and customers. It can do this in different ways - accurate view of costs, liabilities, risks, customer buying patterns, supplier cost-effectiveness, etc and This is particularly important in a recession when organizations need to minimize outgoings and risks. It also enables them to plan savings in an informed and effective way. (Loraine Lawson, 2009).
Usually, Business intelligence is about turn data into information, turn information into knowledge, turn knowledge into decision and turn decision into profit. Business intelligence will ensure that each of activity that uses BI, can gain profit without any problem or loss. “Information Democracy will emerge in forward-thinking enterprises, with Business Intelligence information and applications available broadly to employees, consultants, customers, suppliers, and the public. The key to thriving in a competitive marketplace is staying ahead of the competition. Making sound business decisions based on accurate and current information takes more than intuition. Data analysis, reporting, and query tools can help business users wade through a sea of data to synthesize valuable information from it - today these tools collectively fall into a category called "Business Intelligence.” (Luca Rosseti, 2006).
The importance of business intelligence is we can do the right decision to prevent failure in doing business because of we know everything about our product, market, and competitor. According to Chukwuemeka(2010), Big or small companies can benefit a lot from good and strong business intelligence and from the proper use of this information. After all, no matter how good your information is, if you do not know how to use it properly to make you business grow, then it is pretty useless. Other important thing about business intelligence is we can stable our marketing without any loss because Larry Marion (2009) , has pointed out that BI tools can analyze direct mail and other marketing campaigns and determine which list sources yield the most results. These tools also can cull incorrect/obsolete addresses and otherwise clean lists. In addition, using BI to improve the offers not only reduces marketing costs, it also increases revenues due to the higher hit rates.
Furthermore, as companies increasingly rely on the web for their marketing and sales efforts, BI tools can automate more of the sales process – they can analyze and then respond to web, fax and phone inquiries and Using BI to better understand inventory needs is a classic example of low-hanging fruit for the cost cutters. In addition, Importance of business intelligence is a company can have better negotiate contract with supplier and customers. It means business intelligence will analyze supplier background and performance to determine volume discounts. For customer, business intelligence will identify customer needs and pattern to make package deal or membership discount. According to Astrid Carver (2011), we can increase our revenue by sell information to customers, partners, and suppliers because Leading organizations are using BI to differentiate their product and service offerings from competitors through value added, web-based services. In the past, many departments generated zero revenue, but now with BI extranets, they create a recurring revenue stream by selling information to customers, partners, and suppliers.
In business intelligence, we have some potential problem such as having irrelevant data and poor data quality. According to Ryan Mulcahy (2011), the key to getting accurate insights from BI systems is standard data. Data is the most fundamental component of any BI endeavor. It's the building blocks for insight. Companies have to get their data stores and data warehouses in good working order before they can begin extracting and acting on insights. If not, they'll be operating based on flawed information. Another potential pitfall is BI tools themselves. Though the tools are more scalable and user friendly than they used to be, the core of BI is still reporting rather than process management, although that's slowly beginning to change. Be careful not to confuse business intelligence with business analytics. The benefits of business intelligence are management process of BI do collection of software application and underlying technology. So, organizations enable to build good decision by exposing key metrics that drive the organization.
In Addition ( Jason Mclntyre , 2008), has pointed out that BI systems assist management in developing a data-based decision making model that provides more consistent results when compared to non-BI methods. Organizations that have successfully implemented BI systems have better and timelier access to customer activities, marketplace trends, supply chain issues and a host of other key performance indicators (KPIs) that are not able to be easily measured in a non-BI environment. Other than that, According to (Jennifer Schiff, 2010), with business intelligence we can Identify cross-selling and up-selling opportunities. It means, Business intelligence software allows firms to leverage customer data to build, refine and modify predictive models that help sales representatives to up-sell and cross-sell products at appropriate customer touch points.
So with these opportunities, a company can save cost of production and can gain more profit. Conclusion for the importance of Business intelligence is, BI is the key to leveraging this wealth of data that accumulates in an enterprise because They can help reduce costs, increase revenues, and improve customer satisfaction.
References:
Ryan Mulcahy (2011). what is business intelligence?
retrieve Feb 2, 2012 from http://www.cio.com/article/40296/Business_Intelligence_Definition_and_Solutions
Loraine Lawsonv(2009).IT business edge
retrieve Feb 2, 2012 from http://www.itbusinessedge.com/cm/community/features/interviews/blog/why-business-intelligence-matters-now-more-than-ever/?cs=32790
Luca Rosseti, (2006). Data search management
retrieve feb 2, 2012 from http://searchdatamanagement.techtarget.com/definition/business-intelligence
Chukwuemeka, (2010) The Importance of Business Intelligence to Your Business
retrieve feb 2, 2012 from http://www.cfagbata.com/business-intelligence/
Larry Marion, (2009) Cut Costs (And Save Your Job) Using Business Intelligence
retrieve feb 2, 2012 from http://itmanagement.earthweb.com/entdev/article.php/3824286/Cut-Costs-And-Save-Your-Job-Using-Business-Intelligence.htm
Mark Ritacco, (2011) The business value of business intelligence
retrieve feb 2, 2012 from http://www.ciber.co.uk/pdf/The_Value_of_Business_Intelligence.pdf?CFID=38302416&CFTOKEN=70573213&jsessionid=8430c91d2198aef5e9fd773d347051157269
Astrid Carver (2011) The business value of business intelligence
retrieve feb 2, 2012 from http://www.ciber.co.uk/pdf/The_Value_of_Business_Intelligence.pdf?CFID=38302416&CFTOKEN=70573213&jsessionid=8430c91d2198aef5e9fd773d347051157269
Jason Mclntyre (2008) The benefits of businesss intelligence
retrieve feb 2, 2012 from http://jasonmcintyre.blogspot.com/2008/01/benefits-of-business-intelligence.html
Jennifer Schiff (2010), Ten Benefits of Business Intelligence Software
retrieve feb2, 2012, from http://www.enterpriseappstoday.com/business-intelligence/ten-benefits-of-business-intelligence-software-1.html
