The business world is based on strategic decision-making, which makes the difference between a successful company and another that does not achieve it, is the correct and timely decision-making. To be able to carry out this in the best way, it is essential to have adequate and timely information that supports all the management of the company’s operations in an agile and fast way.
At this point, information technologies play a very relevant role by allowing the collection, storage and processing of data generated by the operation of the company. This facilitates access to information and reduces the margin of error that could exist when making the same capture on several occasions.
It is important to be cautious with the information that is generated since it is just as important to have information as to know how to handle and interpret it, for this there are very useful tools such as business intelligence, also called Business Intelligence.
Business intelligence is a series of strategies, tools and methodologies used to generate knowledge in the context of an organization from its data and information, the knowledge generated is used to support decision-making processes in organizations.
According to the previous graph, a sales process has a series of data, which when they become in context are called information, after an analysis of the information is generated knowledge, which is used to make decisions.
The decisions that are made generate actions on the organization’s processes and produce results on them; these results generate a series of values that will start the information life cycle again.
Before 1960 the information of the companies was kept manually on paper and a large space was required to archive all that information.
Later, with the appearance of the computer, the information began to be carried in digital files, however this brought as a risk the difficulty in handling it and possible losses if there were not adequate backup policies.
In 1969 Edgar Codd introduced the concept of databases, and these began to be used in organizations, however highly specialized personnel were required to administer these databases and to load the information.
Businesses require an easier way to enter their information into databases and so-called business applications emerged in the 1970s.
Business applications, together with databases, provided an easy way to collect information from organizations.
Subsequently, a series of problems arose, such as difficulty in accessing information, the data began to be in multiple locations, an attempt was made to solve the problem of access to information through reports; but these were initially very flat.
As a solution to this around 1980, the concept of the data warehouse arose and its main authors are Ralph Kimball and Richard Inmon.
Now, with organized and centralized data, the information consumption needs of companies increased and the first business intelligence tools emerged, which provided reporting and analysis solutions.
The term Business Intelligence or Business Intelligence as it is known today arises in 1989 by Mr. Howard Dresner who proposed business intelligence as a general term to describe the concepts and methods used to improve decision-making processes through the use of systems.
In the 90s the term became popular and several companies and business intelligence tools emerged; However, with the growth of information and the emergence of new technologies such as the internet, new problems arise:
- Slow inquiries and reports.
- BI tools unfriendly to the end user.
- Proliferation of Excel and different versions of the truth.
- High costs and difficult maintenance.
In response to this, new tools and functionalities associated with BI emerged, however there are still problems, since the tools are not very intuitive, the need arises to analyze new sources of unstructured data such as documents, wikis, social networks, videos, audios, among others. (History of Business Intelligence., Nd)
Business intelligence at the operational level allows employees who work with operational information to receive it in a timely, accurate and adequate manner and is basically composed of reporting tools or spreadsheets with a fixed format whose information is frequently updated.
An example of this could be a sales supervisor who uses a spreadsheet to monitor the compliance of the sales quotas of the salespeople under his charge, one of the columns would have a fixed information (the sales quota) and next to it he could be a column that daily extracts the total sales for that particular salesperson. The sales supervisor in turn could apply formulas taking into account the quota column and the actual sales column without having to enter them manually. (Business Intelligence Operational Level, 2011)
Tactical level business intelligence enables data analysts and middle management to use query and analysis tools to gain access to information without third-party intervention.
As an example, a sales manager receives a pre-printed report indicating that the sales of a certain category of products or services increased in an unusual way in relation to the previous period, an analysis and consultation tool allows him to analyze this increase and establish if it is due to new products, new customers or a promotional strategy that has produced the increase in demand.
With this type of tool it is also possible to determine if in a specific period it is usual or unusual for these abnormal behaviors to occur in demand, in order to anticipate them and be able to take advantage of this situation to increase the positive impact or minimize the negative impact. according to the case. (Business Intelligence Tactical Level, 2011)
Business intelligence at a strategic level allows top management of companies to analyze and monitor trends, patterns, goals and strategic objectives of the organization. An example of business intelligence at a strategic level is the Balanced Scorecard concept introduced by Robert Kaplan and David Norton, which they define as:
“A multidimensional work scheme to describe, implement and manage strategy at all levels within a company, through the linking of objectives, initiatives and measurements to the organization’s strategy”
With the implementation of a Balanced Scorecard, the following benefits are obtained:
It promotes the strategic alignment of the entire organization from the transformation of the Vision and Strategy into concrete action plans.
It encourages teamwork and therefore collaboration and coordination by leading the entire organization towards the achievement of the defined strategy.
Facilitates communication of strategic plans to the entire company.
It integrates and synthesizes a large volume of data and indicators that arise from the daily management of operations.
Develops knowledge and human capital, fundamental bases to achieve strategic objectives. (Business Intelligence Strategic Level, 2011)
Helps increase efficiency
Many companies waste much of their time looking for information from department to department trying to understand their business, if they are lucky enough to find data, they will have to convert it, mix it and make their own reports, with business intelligence all information can be centralized and visualized. on the same platform and turn into useful and organized information, saving time and making decision-making more efficient.
Faster responses to questions arising from the business
A manager must make wise decisions many times under the pressure of time, this precious resource cannot be wasted reading large amounts of paper, reports from each area. With business intelligence options, you can get quick answers to big questions in minutes. For example, a single business intelligence report can contain figures for sales, marketing performance, costs, inventories, distribution channels, etc.
Take certain steps in your business with accurate information
Managing a business is serious and cannot be handled with hunches or intuition, since this practice does not always work and can cause great damage to the company. With the appropriate and structured information, decisions can be made based on the knowledge that the company itself generates. Business intelligence can provide more accurate historical information, real-time updates, cross-branch data summarization, forecasting and trends based on information, and situational analysis.
A n to Lizar consumer behavior
Business intelligence makes it possible to analyze consumer buying habits and convert this information into profitability for the company, it also makes loyalty campaigns more efficient. Predictive models can also be built to facilitate cross-selling, promotions, luxury product sales, and other strategies targeting the right customer thanks to the right information.
It allows to have better control over the functional areas of the company
From production, inventory, marketing, purchasing, to after-sales service, they are likely to be included in a business intelligence system, since data is used and needed in all functional areas, whether from customers or costs. of raw materials, research and development, in short, the spectrum of information is large and having it stored in one place with the possibility of crossing it and analyzing it in a matter of minutes is a great benefit in terms of costs and time, it reduces the errors in decision making. (Ortiz, 2013)
Business intelligence system
A business intelligence system is made up of information sources, models, users, and technical means. The main function of the system is to collect information from all relevant sources, validate it, process it and deliver it in the appropriate format to users who need it. The data model defines the way to process them to turn them into information.
The effectiveness of a business intelligence system can be measured based on several parameters:
1 . Speed
It is the capacity of the system to offer the requested information in the shortest possible time. It should not be forgotten that the value of the information often depends on its moment of consumption. The information must be available when it is needed, having it later often takes away all its value.
To achieve this, not only is a powerful system necessary, it is also necessary to create a data model or logical layer with enough flexibility to be able to provide answers to any kind of questions that may arise during the exploitation of the system.
2 . Reliability
It refers to the quality of the information. A system that does not provide reliable information can lead us to make wrong decisions.
Many times the valuable information is obtained from fragments that have to be added and processed, in this process the integrity of the data can be altered. To offer greater reliability to users, the data treatment process must have a certain level of transparency and traceability, allowing from which data information has been obtained and to what treatment that data has been subjected to reach the result offered. .
3 . Level of abstraction
It is the ability to answer complex questions based on the processing of smaller units of information. For example, to find the average number of returned orders per week, all returned orders must be located in the company’s records for one year and divided by the number of weeks. The more tasks of this type can be performed by the system, the more work it will save users.
Again, for a system to offer a high degree of abstraction, it is necessary to design a solid data model. In addition to that, it is necessary to have a high level of understanding of the business logic and the role played by each of the data provided.
An also typical example of a level of abstraction is the ability to know the profits of a company based on the multiple notes of sales and expenses of a whole year. In this case, thousands of data are used, which by themselves have very little significance to be able to obtain relevant information that will facilitate decision-making.
4 . In-depth navigation
It is the ability to move from more global issues or to more specific ones. To cite an example, you may be consulting the global sales of the company by months, if from that report you can access through a link on the sales of that month by customers, then it is decided that it has depth, since it allows you to navigate through the data in a related way as concerns arise.
Continuing with the example of the profit report, a report with in-depth navigation should allow easy access to sales by products, expenses by department, sales by month and so on. This is in-depth navigation. If, for example, from the annual sales, the sales per month of each product could be accessed, a further level of depth would be added.
5 . Information presentation
The less effort the user needs to interpret the information, the better the system will perform in this regard. In this section, the effort made in the visual design of reports, dashboards and other visualization elements is key. It is not only about making the reports look good, what is sought is that the visual structure facilitates the interpretation. If you have two reports on the same issue, the best one will be the one that requires less time for the user to understand. (Business Intelligence, 2012)
Many companies are already reaping the good fruits of business intelligence solutions. General Motors of Brazil (GM), some years ago standardized its data analysis infrastructure, following the guidelines of the world corporation, with a business intelligence platform. The Marketing and Sales areas are served with the solution, focused on the Order to Delivery process, which reflects the information from an order to its delivery to the consumer; in addition to the areas of Manufacturing, Finance and Purchasing, responsible for the purchase of indirect materials, forecasting of vehicle sales (demand sensing) and analysis of online sales and analysis of the performance of internal processes related to the final consumer. The use of the business intelligence platform also allowed GM to
Before this option, GM already had several processes and areas dependent on information derived from different businesses for decision-making. However, most of the time, they were projects created manually, with different systems and templates, which did not interact with each other. There was a need to establish a technology strategy to support the actions of the company in a consistent and integrated manner. A specific area called Executive Information Management was then created, with the mission of optimizing the potential for use of the business intelligence solution.
The implementation of the solutions began in a project for approximately 20 people. Today, it has more than 600 users, including analysts, supervisors, coordinators, managers and directors. It works with MicroStrategy Intelligence Server, OLAP Server, Narrowcast, Web Analyst, and Desktop Analyst solutions. The latest acquisition was the fully integrated, web-based business intelligence platform. The option for a complete business intelligence solution was a strategy for the company to obtain competitive market information.
Thanks to this initiative, GM of Brazil commemorates the fact of being faster and easier to obtain the crossing of the information of its day-to-day business, to obtain information models that greatly help the decision-making process.
Another proven benefit is the ease of creating reports. GM began to have more speed in obtaining any information from the system and greater ease in crossing existing data, such as filters by region, time or models of the vehicles sold. With this solution, company executives can read electronic reports to find out how much has been sold the previous day. To support all this information, GM has several databases, of medium and large size, which constitute specialized Datamarts.
Their profile is the adoption of mature technologies, coming from companies that have adequate infrastructure and that offer all kinds of consulting support in the country.
Another example is Vesper. Embratel’s local operator, Vésper implemented Fuego’s business process management system, which streamlined wireless broadband service to end users. Approximately 70% of users who purchase the Giro service, according to the operator, are served within 24 hours. The rest is attended in a maximum of 48 hours. The tool allows operational synchronism, and makes the operator capable of managing all activities related to the business, including the processes of outsourced companies, with a fairly small team.
In Giro’s first three months of operation, the solution already guaranteed 80% efficiency in the delivery of the terminals. In six months, the percentage reached 95%, providing a great competitive differential. At the beginning of the project, the mapping of 30 macro activities related to operations was carried out.
With the system, those activities were reduced to five, optimizing resources and identifying where improvements could be made. (Business Intelligence, nd)
Information is a strategic resource of crucial importance for organizations due to the demonstrable fact that having the necessary information enables the best decisions to be made in all areas of the business structure.
Business intelligence supports decision makers with the right information, at the right time and place, enabling them to make better business decisions. The right information in the right place and time increases the effectiveness of any company.