Business Intelligence: Strategy & Benefits

Instructor: Noel Ransom

Noel has taught college Accounting and a host of other related topics and has a dual Master's Degree in Accounting/Finance. She is currently working on her Doctoral Degree.

What is business intelligence? It's something that many organizations use. This lesson examines how business intelligence tools and strategies can benefit business leaders and organizations.

Businesses Need Information

Business organizations need data to make informed decisions. Nearly every single business keeps some kind of raw data. However, it's not usually helpful, because it's not readily available in an easy-to-read format that can be easily interpreted to tell a business story. Raw data is just a pile of information about something - like weekly earning reports, wages, taxes paid, that sort of thing. It hasn't been processed, analyzed, or interpreted for use; it's just mainly a list of numbers or facts. How fun is that?

What is Business Intelligence?

In order to convert all of this raw data into information that is useful in decision-making, business managers use something called business intelligence, or BI. This is a general term for software used to analyze raw data and turn it into something useful. In the simplest form, business intelligence tools can be spreadsheets, dashboards, graphs or tables or internal company databases. However, many organizations need more complex data analysis, so the use of third-party providers or vendors has become increasingly popular.

Jane: A Business Intelligence Wizard

Meet Jane, one of the managers at a bank. During a business meeting, her boss tells her that sales are down in her department by 20%. Additionally, she learns from some employees at the bank's sales center that it takes too long to complete a sale. She needs to make some changes, but first she needs to find out what's happening.

Jane digs up the historical data of sales over the past 12 months, and she also gets her hands on a listing of processing times from the sales center. The processing times list the start and stop times of each sales center representative, and there is a separate call log with complaints and notes for each sale over the past 12 months. However, she doesn't want to spend hours and days wading through all of this raw data, and it could take weeks to make sense of it all. What will she do?

Being a tech-savvy type, Jane decides to do the job herself, using her company's business intelligence software. She enters the raw data from the call logs and the sales center, then selects specific parameters to convert the raw data into the information she needs.

A couple of hours later, the program spits out a report telling her everything she wants to know. Jane discovers the average time it takes to process a sale is two hours, which is way too long. From the customer feedback in the call logs, Jane also discovers that customers have been giving their contact and payment information to the sales representative in over 85% of the sales calls, when they should have just been giving them to the customer service agent who answers the call. Nice work, Jane! And it's not even lunchtime yet!

Jane has gotten results!
Jane has gotten results!

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