Running and marketing a successful business cannot rely on guesswork. Your instincts can get you far – but generally speaking, data will carry you further. With the right analytics strategy and business intelligence you can dramatically improve your strategic decision-making and forward direction.
It’s not always easy. Gathering the data is difficult enough, and interpreting that data only gets more complex. Still, the benefits of taking this type of data-based approach far outweigh these complexities. Let’s dive into the importance of business intelligence, and how it can help your company thrive in the short and long-term.
What is Business Intelligence?
Let’s start with an official definition. According to Gartner,
Business intelligence (BI) is an umbrella term that includes the applications, infrastructure and tools, and best practices that enable access to and analysis of information to improve and optimize decisions and performance.
Sounds complicated. At its core, though, it simply means building an infrastructure that enables you to make important business decisions on the basis of data. The better decisions that derive from this more structured and analytical process will improve business performance.
It makes intuitive sense. Take a hypothetical situation in which you can’t decide whether your storefront should remain open until 6pm or 8pm on weekdays. Does it cost more to keep the store open, or does the revenue make up for that additional cost?
You could take a guess. Given that you can only choose between two options, you have a 50% chance of making a decision that benefits your business. Or you can use data to your advantage. By collecting the right data, you might be able to determine:
- Typical foot traffic in front of your business between the hours of 6pm and 8pm.
- The amount of requests you get between these hours from customers who might make a purchase if you’re still open.
- Preferences of your customers (collected via survey) on what might be the best choice.
Based on this data, you improve the chances of being right by 30%. Now, you can make a decision that is statistically likely to actually improve your business.
The Benefits of a Data and Analytics Strategy
We’ve already covered the benefit of being more certain when it comes to business decisions. Of course, that is only one of the advantages you get from implementing a thorough data and analytics strategy.
First, it helps not just in the quality but also the speed of your decision-making process. In fact, one survey found the speed of planning, reporting, and analysis to be the single biggest benefit of business intelligence for organizations across industries. No guesswork also means taking out time for contemplation – you can focus on the data, and make a quick but accurate decision accordingly.
Employee satisfaction is another advantage of an analytics strategy that many companies just considering the concept don’t tend to consider. Put simply, minimizing the human element also means increasing the degree of equality within your company. It’s more difficult to argue fairness with a data model that suggests, based on the available information, an objective solution.
In a marketing context, the benefits of BI are just as significant. Better data (and knowing how to analyze that data) can help your business better target its customers, improve message personalization, and increase business opportunities as a whole. That, along with the quality and speed of decision making in marketing and throughout your business, combine to result in a number of outcomes that businesses who embrace business intelligence tend to enjoy:
- Increased customer satisfaction based on needs being more fully fulfilled and responses becoming more relevant to these needs.
- Increased competitive advantage, especially when compared against competitors who don’t embrace the same concept to the same degree.
- Increased revenue on the basis of better strategic business decisions. In fact, CIO has called BI the “major player” in maximizing revenue over time.
All of these benefits are worth striving for in any industry and business environment. Of course, they don’t just happen automatically. The right data and analytics strategy is just that – strategic, designed to build a sustainable advantage instead of unsustainable short-term revenues. That’s what the next section will cover in detail.
Building an Intelligence Strategy to Improve Agility and Profitability
Business intelligence is not a short-term undertaking. It requires months and years of planning, execution, and dedication. Still, you can boil the basic process down to a few steps to make sure you leverage BI for better revenues and agility:
1) Understand Your Data Needs and Capabilities
First, you have to begin with the basics. Do you know what types of data you are collecting right now, and how that data connects to your larger business objectives? Can you draw a line between the two, and how do they relate to the areas in your business where you can use the help? A data inventory, followed by a needs analysis, can help you make that crucial connection.
2) Build Measurable Goals and Milestones
Based on the general needs identified above, you need to ground your strategy in both reality and aspiration. That’s a surprisingly difficult step, especially if you’re just getting started. It means setting goals that are realistic, clearly measurable, and directly connected to your larger business objectives. Setting milestones, regular check-ins to ensure that you’re on track to meet your goals, tends to help.
3) Dedicate Resources to BI
BI has the potential for immense success, but you need to make sure you invest in it. To start, that means some funds dedicated to the process. But perhaps more importantly, it also means commitment and human resources to analyzing data, and making decisions based on that data.
4) Get Organizational Buy-In
Once you have a basic plan in place, it’s time to share it with the larger organization. Analytics are an important component of any business and marketing strategy, but only if your stakeholders are on board. Explain the benefits to them, as you share a plan that’s designed to optimize business (and marketing) decision-making over time.
5) Work with the Right Partner
Finally, it pays to not have to walk this path alone. Finding partners who have experience in the field and can help you break through is important to ease yourself into the process of data-based decision making. In marketing, for example, our strong experience in analytics has helped us drive clients like you forward. Work with us to begin leveraging the above benefits of business intelligence in your own marketing strategy and operations.