What is Business Intelligence and how to use it for good decision making?

Introduction

In recent times there has been a lot of talk about the concepts of Big Data, Machine Learning and Artificial Intelligence as the trends that will lead your company to success. However, there is a trend that is simpler to learn and use and that can have a great impact on your company or business. We are talking about Business Intelligence (BI), a field that we define in Brain Food as the ability to view data in an integrated way and use the information we have to improve and accelerate decision making, enhancing business knowledge.

The leading tools used today to work in Business Intelligence are Power BI and Tableau. Both tools have their advantages and weaknesses and, in general, are similarly powerful for loading a large amount of data and assembling an infinite number of tables and charts. However, these BI tools can feel like just reporting and displaying data without adding much value. At Brain Food we encourage our clients to use BI reports not only to view data but to analyze and exploit them, making the most of them in business decision making.

Among the great benefits of using BI in the business are:

1. Saving costs and time in the preparation of reports, having these reports in real time (or near real-time), anywhere and on any device.
2. To raise new opportunities for the business in order to search and work on that opportunity to generate additional value.
3. Get immediate answers to changes in the business such as finding the causes of a decrease in sales or increase in costs without the need to ask a third party.
4. Increase the amount of information stored in a single report by generating interactions between different data with simple and quick access.
5. Improve the level of knowledge about the state of the company, allowing access to the main indicators of interest in real time.

At Brain Food we have realized with our clients that there has been a tendency to add and add reports to observe how the business is progressing. However, this trend is starting to be counterproductive for users because they are satisfied with seeing and reading data and do not stop to use it as a new source of information that can be transformed into knowledge. Next, we will talk about two examples in which some of our clients have been able to change that reportage look and use it to generate knowledge and use it for correct decision making

Example 1 – Investment opportunities

A client of the real estate industry in our country generated a quarterly report with prices and supply of apartments for certain districts of the country. This information was separated into different files for each quarter and commune, so the general analysis of the communes and the evolution of prices and availability was cumbersome and very difficult to obtain.

To solve this problem, the data loading was automated and a report was generated in Power BI that allows to have in one place the information required to generate these reports by commune and quarter. In addition, the client began to use this report to rank sectors that had high sales speeds and high prices that allowed to discover good business opportunities to develop projects.

In summary, with the use of tables and maps the report could be used for what it was designed for and also to discover new investment opportunities. Given the latter, the client was able to save time in the preparation of reports, visualize opportunities faster and store past and future information in the same report.

Example 2 – Customer actionable based on purchasing behavior

Another client, in this case in the FMCG industry, was investing resources and time in customers who were not returning the minimum value to be profitable. To solve this, we did a one-by-one analysis of the value currently generated by the customers and the potential value they could generate for the business given their purchasing behavior.

We started the above process with a profitability analysis to see which customers buy the most, what they buy and when they buy. Then we followed with a CLV (Customer Lifetime Value) calculation for each of them in order to identify those customers who had high purchasing potential and could generate greater value to the business.

Up to that point, the project consisted of calculating and displaying, however, we then worked on segmenting customers by purchase, CLV and purchase frequency and assigned actionable items to each group to increase their purchase volume and at the same time make it cheaper for our client to serve them (we redesigned the way to serve customers optimally according to their profitability). Thus, the report became a tool to manage customers and know how to serve each one of them by measuring the impact generated by the different actionables. Thanks to the project, our client was able to discover a relevant opportunity to better serve customers with great buying potential and get answers quickly for those customers who were not profitable.

Conclusion

Business Intelligence is a concept in which there is still much to know and study, where its tools continue to incorporate new functionalities and uses that add value to tactical and operational management. However, it is very easy to get involved in this world and start learning by yourself with your business data and explore the multiple benefits of BI. The future holds a time when reports will no longer be tedious and repetitive, exhausting valuable HH’s that could be used for more value-added tasks, but will offer an instant and holistic analysis of the current state of the business or company