Business Intelligence (BI) is a collective term that includes the machinery and tools that are in place to handle large amounts of corporate data about customers, markets and staff, extrapolating and analyzing it to devise efficient strategies and facilitate sound decision making, which can greatly influence and positively affect the future of the business. Every corporation, large or small, is constantly generating data. This involves the market, present customers, potential customers, staff, the product or service provided by the company and other relevant information. The management of the data that a corporation regularly generates, by means of technology is BI.
BI based forecasts can be very beneficial for any corporation; how this happens is discussed briefly below.
Look back and see what has happened
It is said that hindsight is 20-20, meaning that everyone has a perfect idea of how the past should have turned out, what strategies should have been used and how much better the outcome would have been had they been implemented. This is not always a negative. In fact, using historical data, business leaders can come up with models on how the market behaves to stimuli and how future models can be created based on this. If the business can accurately find out what happened, they can be effectively avoided in the future.
Impacting the here, right now
This approach involves the current position of the business and how close to the intended plan it is moving. Using current, real time data, analysts can see whether or not there are any tweaks that can be made to get closer to the plan or modify the strategy itself to suit current situations. This is an approach that helps make on-the-spot decisions to improve revenue by controlling costs.
Modeling the future
This is the main motive of Business Intelligence, that is not only predicting the future, but modeling it to suit your strategies. It is possible to forecast the outcome of a market strategy using quantitative methods of analysis. Using information linked to macroeconomic, merchandising, advertising, customer education and other related indicators, businesses can be prepared for multiple, alternate futures and adjust according to the ones that play out.
Business Intelligence normally involves the use of applications and software packages that are created specifically for this purpose. IBM, Microsoft, Sun, Oracle, SAP and SAS are among the well known, experienced players in this market. Not every firm will, or have enough data or the resources to employ BI in their working. Start up organizations and small firms look to employ some basic BI by making dashboards, charts detailing happenings to facilitate analysis and enable planning, thereby slowly moving into a BI culture. In summation, BI aims to use historical data in aiding accurate decision making and typically bears a significant impact on organizational growth.