Why Analytics Are So Important for Decision-Making
The benefits of business intelligence (BI) have pushed analytics to the top of the agenda for many small and midsize businesses. SMBs are more frequently seeing the advantages of utilizing the vast amounts of big data in their business strategies.
BI is first and foremost a way of using applications and data to provide executives and decision makers actionable information from which they can make informed decisions. Organizations are increasingly relying on BI as an essential part of their digital strategies, but it is yet to be a wholly ubiquitous strategy.
About a third of businesses already consider themselves to be a “data-driven organization”, meaning data is at the heart of the decision-making process for many modern companies. SMBs are leading the charge in implementing BI for their strategies, with higher adoption rates compared to large enterprises.
What Exactly Is Business Intelligence?
BI is a general umbrella term that refers to methods of collecting and analyzing data derived from business operations in order to improve the efficiencies and processes of an organization.
BI examples include:
- Data mining
- Statistical analysis
- Reporting
- Data visualization
- Performance indicators
Using best practices for BI, organizations can make better decisions by analyzing past and present data, cultivating it into actionable data, and implementing strategies to make use of that data.
Digital transformation has paved the way for businesses—SMBs in particular—to make use of the abundance of information flowing to and from companies and use it in a way that helps to inform decisions on a day-to-day basis.
Cloud technology has paved the way for BI tools to be opened up for use by small and midsize businesses, where once they were the used solely by large enterprises. As with many modern technologies, BI initiatives are commonly finding their way into the operations of smaller companies.
Using Gut Feel for Decision-Making
Many owners, executives, and decision makers will be familiar with deciding on a course of action based on their gut instinct.
This can be because of several reasons: actionable data isn’t readily available, or it’s simply the way it’s always been done. With successful organizations, only 40% base their decisions on gut feeling.
For less successful enterprises, this number jumps to 70%.
Despite the clear disparities in success between businesses which do and do not use data in their decision-making process, gut feeling is still the most prevalent method for decision. 62% of executives believe that it’s necessary or even preferable to rely on gut feelings for major decisions.
This is not to downplay the usefulness of instinct when making business decisions. Human input has been and always will be a fundamental aspect of decision-making.
It’s about the extent to which modern businesses are willing to go to incorporate analytics into their strategies when necessary to improve their digital transformations.
Decentralizing Your Data
The benefits of business intelligence within organizations is often dictated by the size and agility of the business. Data analytics was difficult for smaller organizations in the past to utilize effectively because of associated costs and data sets only measuring a fraction of their number today.
With a lower barrier to entry and a greater percentage of BI apps being used among SMBs, business intelligence is enjoying huge popularity among small and midsize organizations and helping in their decision-making.
Traditionally, data has typically been a highly centralized aspect of business operations. Namely, IT departments would have complete control over data sets within a company and be the sole point of contact to retrieve them.
Decentralizing this data and allowing it to become accessible across departments increases collaboration and prevents the emergence of silos.
Decentralization can be done in a number of ways. For example, a managed service provider can implement an intelligence platform that allows you to gain reporting and analytic insights with an app accessible anytime, anywhere.
A good intelligence platform can manage, model, visualize, and predict data in one place and provide a user-friendly experience.
Fresh Customer Insights
The principle goal of BI is to have the ability to make actionable use of data sets that were previously dormant and underused by companies. Because of this, making decisions unsupported by metrics has long been a common occurrence.
By next year, 40% of all analytics projects will relate to an aspect of customer experience, frequently cited as one of the most important factors considered by SMBs. By allowing decision makers to make use of these sets through implementing new insights into operations and strategy, brand new opportunities for growth begin to emerge and business decisions can be backed up with applicable insights.
Using intelligence platforms and dashboards to sort through data effectively is key to discovering these opportunities. Real-time analytics and predicative data help businesses have a far greater understanding of what their customers want and how to address those needs.
Maybe you want to provide them with a more personalized experience during the buyer’s journey? Maybe you want to understand consistent strengths and weaknesses in your customer interactions and formulate a plan for improving your relationships?
Utilizing analytics about your existing customers can help you prepare for your future customers and give you a huge advantage in establishing more successful practices for your future interactions.
Cash Flow
Often the most important considerations when it comes to business intelligence.
One of the benefits of business intelligence is the opportunity to identify weak spots in your cash and better your financial efficiency. Predictive analytics takes the uncertainty out of transactions.
For example, guesswork can be removed from the buying behaviors of customers, allowing businesses to know exactly how much supply is needed for current demands. This is especially useful for managing inventory.
Aside from the practical uses like this, analysis of cash flow history, operating expenses, and accounts payable/receivable can be acquired directly from software modules from an ERP and used in your business plan.
With analysis software, decision makers and executives are provided with easy digestible and timely reports as often as desired, be it daily, weekly, monthly, or quarterly. BI initiatives like this help
Efficiency & Productivity
When a department or team has access to information that helps them perform tasks better, there is a clear improvement in productivity. Staff who might otherwise be preoccupied pursuing tasks that don’t align with business strategy can save time and money by focusing on jobs that need their attention.
BI tools give you KPIs and metrics from which employees can make informed decisions backed by applicable data. Analytics software allows decision makers and managers to pinpoint challenges and address them appropriately.
With IoT devices utilized more than ever for the processing of organization data, the need to make use of the benefits of business intelligence applications on cloud platforms is vital for streamlining business operations. 48% of organizations consider cloud BI to be “critical” or “very important” to their future business productivity plans.
Takeaways
- Business intelligence allows data to be consumed across departments, instantly and with ease
- Adopting BI tools stops siloing and decentralizes data that has, in the past, required decision makers to jump through hoops to retrieve
- Advanced insights on customer behaviors allow organizations to strategize to better meet their demands
- Financial insights help SMBs make decisions on cash flow, significantly improving their bottom line
- Managers have constant access to data with regards to employee activity, saving time and money spent on time-consuming tasks and improving staff productivity and efficiency
If you want to take full control over your business intelligence initiatives and drive your business to success using actionable data from a wide range of analytics, speak to one of our experts about your IT needs.