Advantages and Disadvantages of Business Intelligence

 Business intelligence is an advantage that business owners have welcomed with open arms. It is, possibly, the best they could have asked for in terms of gaining end-to-end visibility into their operations. Not to forget, the real-time insights that are an added edge.

In the earlier days, businesses were mostly run on vague forecasting processes or gut instincts. In recent times, business owners realized that there was a need to have an element that could actually turn their data into insights and pave the way for growth. Business intelligence mechanisms have suitably provided the much-needed respite from the inefficiencies the companies faced earlier.

This post will help us learn the fundamental benefits of Business Intelligence and how it can be leveraged through the best practices for implementing it.

What is Business Intelligence: An Overview

In simple words, Business Intelligence is a technological process that collects data and hands over to businesses a clear view of their data to arrive at an informed decision. This data can be sourced from the various organizational activities.

BI is a tool to parse this data through various processes that it encompasses. These processes include data mining, data analysis, and descriptive analysis. All the data that is generated by the business is presented by BI in a way that is easily readable and understood by the business owners, managers, stakeholders, and other crucial entities. It could be in the form of easy-to-read reports, simplified KPIs, and also future demands and trends that can be immensely helpful for businesses to take appropriate goal-oriented actions.

Types of BI Systems and Tools

There are diverse types and forms of BI tools and software. Let’s look at some of the common BI tools and software:

• Spreadsheets: These include Google Sheets and Microsoft Excel. These are the fundamental and the most common types of BI tools that we utilize in our daily lives.
• Reporting Software: These kinds of software are used by business managers when they need to present data in a well-structured and readable format. The users can set the criteria to depict the data in a particular format, making it simpler for them to understand and interpret it.
• Dashboards: These are types of tools that enable the users to get a consolidated view of all the important parameters pertaining to their business.
• Data Mining Tools: These are the sets of tools that are utilized by businesses when they have immensely large data sets to work on. The data mining tools are used to understand the particular pattern in the large data chunk.

All these tools are involved in helping the users but the choice of the tool lies with the requirements of the company.

Advantages of Business Intelligence

We have discussed the various kinds of BI available for businesses to leverage. This section of the article is dedicated to the advantages of BI.

1. Accuracy in reporting: Reporting is an essential aspect of the growth of a business. BI tools facilitate accurate reports that are not only reliable but also empower managers to get real-time updates.
2. Improved data quality: BI tools are the apt choice when it comes to recognizing inconsistencies and errors.
3. Competitive edge: BI tools are extremely adept in reporting customer preferences as well as competitive performance. By leveraging the BI tools, business managers can learn more about their competitors and develop strategies for better growth.
4. Heightened efficiency: BI tools enable automation of many processes such as collection of data and offering insights. Such actions help streamline the processes of the companies and increase efficiency.
5. Enhanced decision-making: When the BI tools assist the users in the collection of essential data, analyzing, and interpreting it, it also guides them toward better decision-making. The data is spread out in a way that the users can determine the pros and cons of certain operations.
6. Cost savings: With the help of the BI tools, a major part of the business is automated and streamlined. This makes it possible for them to identify the areas of opportunities and errors. Thus, the process helps organizations save valuable dollars.
7. Enhanced revenue: The use of BI can assist businesses in enhancing their revenue by generating relevant reports, presenting precise data, and thus, improving sales strategies. With better customer service, they can witness improved business growth and revenue.

Disadvantages of Business Intelligence

While there are just a handful of hiccups in using BI, it is important to know about them. LEt’s learn about the handful of disadvantages that business intelligence tools may have:

• Implementing costs: The costs of implementing business intelligence tools can be a huge challenge for most companies. Different costs can include the costs of acquiring the licenses, infrastructure, integration, and educating the staff or arranging for training programs.
• Staff reluctance: Your existing staff is used to a certain way of working and the introduction of a new system can meet their reluctance.
• Complications in analyzing data: With all kinds of structured and unstructured data pouring in, it could get tedious and complicated to analyze it.

Best Practices for Business Intelligence Implementation

While BI tool implementation can be a great turning point for a company, the use of certain best practices in BI implementation can be crucial.

• Setting objectives: Managers need to ensure that they have clear objectives at hand to help in easy implementation.
• Ensure data quality: Ascertain that the data sent for analysis is consistent and accurate. This lets the BI perform at its optimal level.
• Involve stakeholders: Involving stakeholders from across the organization ensures that all the business needs are taken care of and all concerns are addressed.
• Choose the right BI tools: We have taken a look at the different types of BI tools. Therefore, it is essential to choose the one that suits your business requirements the most.