Business intelligence (BI) is something you don’t want to miss out on as a business owner. The days when you could build a successful business based on intuition and general knowledge of the field are long gone. And if you’re not using BI to make data-driven decisions, you’re bound to fall behind the competition.
Follow along to learn more about business intelligence, how it works, and how you can use it to improve your business practices.
What is business intelligence?
Business intelligence is the process of collecting, storing, and analyzing data to make informed decisions and drive growth. This includes both internal data on how your company operates and external data on your competitors and the market as a whole.
Using BI helps you pinpoint weak spots in your strategy and find solutions for turning weaknesses into strengths. It also keeps you informed on any changes within the market, allowing you to make the necessary adjustments on time.
In the 1960s, the term Business Intelligence was used to describe a system of information sharing between businesses. Since then, it has become much more than that, with its growth largely driven by improvements in computers and technology.
Nowadays, direct cooperation with other businesses isn’t a must, as incredible amounts of data are publicly available for you to collect, analyze, and turn into data-based business decisions.
How does business intelligence work?
In simple terms, business intelligence works by collecting, storing, analyzing, and reporting data. Each of these steps has its unique structure and essentially functions as a separate process. They’re later combined to achieve the result you’re looking for.
Data collection
To analyze data, you first have to collect it. And we’re not talking about small amounts of data here. There are two common ways to do so — get data from large datasets and pick out pieces that are relevant to you or use web scraping to collect data straight from the web.
You might be surprised at how much data is publicly available. The US government data website alone has more than 290,000 datasets available for your use. Not to mention millions of other publicly available datasets.
The issue with using datasets is that you have to use another process, called data mining, to scan and process enormous databases to filter out data that is actually relevant to you. Otherwise, you’ll just find yourself with tons of data but no way to use it.
If you use a web scraper with an integrated web crawler, you can set it up to search for relevant data on the web, scrape it, and deliver it to you in a structured format. While this sounds like the perfect solution, it also has some issues. Websites tend to limit the number of requests that a single user can make, slowing down the scraping process.
To overcome this, efficient web scraping needs to be set up together with a proxy service. By rotating your IP, the proxy allows the web scraper to overcome request limitations and IP bans set in place by websites.
Regardless of which process you choose to go with, you should be left with solid, structured data that is ready to be analyzed for your business.
Data storage
The data you collected needs to go somewhere. In most cases, there’ll be more data than you can fit in your computer's hard drive. On top of that, it’ll probably need to be accessible by other people in your organization who will deal with BI-related processes. And that’s where data storage comes into play.
You can store data on the cloud, data centers, or even set up your own storage servers in-house. Just keep in mind that you shouldn’t get rid of any data after you analyze it. All good BI operations keep their data in data warehouses for a long time and use it for historical references and comparisons.
Data analysis
Once you’ve collected your data and stored it, it’s time to start looking for insights that can drive your business growth. This is the essential step in BI that turns your data into something that may actually be valuable for your company.
Data analysis includes closely examining data to look for common denominators and trends. Whether it’s analyzing external information on competitor pricing and e-commerce trends to adjust your own pricing or analyzing internal data such as sales and traffic after certain changes are made to your website or app.
Reporting data
Once you’ve got your insights and a list of things to do, it’s time to report this data to your team in a structured manner. Not everyone in an organization is a data analyst who can understand scattered pieces of data, so you’ll need to visualize it to better explain actionable steps to your team.
Visualizing data and putting it into graphs, dashboards, and tables often helps you see the picture better. This is the step that ties all your efforts together and turns it into something that is easier to grasp and act on.
Business intelligence use cases
Theory is one thing, but how do you put it all into use? Well, BI has plenty of use cases, as it’s involved in nearly every business decision. The exact use cases will depend on your field of work and how advanced your business already is. So, while we can’t name them all, let’s take a look at some of the most common examples.
Competitor analysis
The only way to know where you stand in the market is to measure yourself against your competitors. Gathering business intelligence can get you insights into the business practices of your competitors, both good and bad, so you can find something you might want to improve or avoid.
E-commerce trends
Keeping up with the trends is one of the toughest parts of running a successful e-commerce business. Gathering and analyzing information from successful e-commerce platforms can help you adjust your practices to target these trends sooner so you don’t miss out on any revenue waves.
Pricing strategy
Pricing is arguably the most important part of any e-commerce business. Many users are quick to grab the item or service that promises the best value for money. By gathering business intelligence, you can distinguish your competitor’s pricing strategies and adjust your own pricing for better profit margins or driving more revenue.
Productivity improvements
BI can give you insights into practices or strategies that can help you achieve your goals more efficiently. Whether it’s uncovering new processes or even finding tools, there’s always something to improve in how you operate.
Tracking your KPIs
KPI (Key Performance Indicator) tracking is a great example of how you can use internal data to track your progress. Keep data on your effort metrics and how they affect revenue, analyze it, and measure the effectiveness and performance of your team more accurately.
Real-life examples of BI use
To provide you with inspiration or even give you ideas on how you might want to use business intelligence, here are a few examples of how other companies do it.
Merger and acquisition opportunities
saas.group has implemented a BI strategy to find new acquisition opportunities. By working together with ScraperAPI, saas.group has built a database of businesses and companies they might be interested in acquiring.
In this case, they gathered business intelligence on companies that meet their requirements and that may be open for mergers or acquisitions. By using BI instead of more traditional methods, saas.group has been able to uncover more opportunities and make more business deals.
Automated pricing adjustments
PriceEdge has combined continuous web scraping and data organization into a tool that tracks competitor pricing changes for you, suggests an optimal price for your business, and can even adjust the pricing accordingly on different platforms.
This is made possible by constantly collecting the most recent business intelligence on pricing and helps businesses make adjustments on time to prevent potential losses from falling behind on pricing trends.
Conclusion
Business intelligence isn’t going anywhere. It provides a way for businesses to make informed decisions and drive growth. No matter if you’re a one-person crew looking to grow or a multi-billion dollar organization.
It allows you to stay on top of market trends, changes, and how you compare with your direct competitors. Ignoring such information means stalling business growth. And with so much data available publicly, you shouldn’t ignore such opportunities.
