The goal of modern business intelligence (BI) is to furnish a variety of users with data insights they can understand and act upon. One of the key aspects of effective BI is the provision of user-friendly tools accessible throughout the entire business ecosystem rather than to IT teams alone.
Another foundational element of BI is guaranteeing insights come back in an understandable, customizable format. Ensuring users have the data fluency and confidence to use said tools, interpret said insights and communicate about their findings also figures prominently. Combined, these factors have the capability of raising adoption rates throughout an organization.
But what about the measurable business outcomes — that is, the bottom-line effect on revenue, expenses and profitability? While the aforementioned elements are certainly important in facilitating the user experience of analytics tools, it’s also important for enterprises to understand how modern BI can boost profitability through improved decision-making. After all, this is what executives and stakeholders measure when calculating return on investment of analytics strategy.
Here’s more on how BI can increase your company’s profitability.
Boosting Operational Efficiency/Productivity
In the following sections we’ll talk more about how BI can help companies make money. But first, let’s cover the other half of the profitability puzzle: reducing expenditures while maintaining quality. In other words, BI can help decision-makers identify opportunities to save money and/or time.
This can take many forms:
- Manufacturing companies using Internet of Things-connected sensors to optimize maintenance schedules, reducing unplanned downtime and major malfunctions.
- Hospitals adjusting processes for ordering, storing and restocking medical supplies to avoid redundancy and wastage.
- Retailers using analytics to identify delays in the supply chain then choosing the most cost-effective products/vendors and consistent modes of transportation.
- Logistics companies adjusting energy usage in warehouses by automating lighting and heating/cooling systems and switching to eco-friendlier products.
Enterprises within every sector must deal with wastage, delays, inefficiencies and squandered productivity. What BI technologies can do, particularly when powered by artificial intelligence (AI) algorithms, is identify these areas of extraneous expenditure, gain context into when and how they’re occurring and make data-driven decisions to address them.
After all, what company wants to “take one step forward and two steps back” when they could eliminate some of those costly backward steps altogether thanks to accurate data insights?
Maximizing Customer Relationships
Companies stand to benefit from closely understanding the behaviors and preferences of their highest-value customers — as well as how to turn potential customers into loyal patrons.
As Tech Republic writes, modern BI can provide insights for marketing and sales teams about customer loyalty and retention efforts, campaign performance, customer mix and churn metrics. Building effective customer profiles starts with making relevant, up-to-date information available to inform data-driven decisions aimed at making the most of customer relationships.
Discovering & Exploring New Revenue Streams
Even companies currently leading their markets in what they do are always looking for opportunities to expand — as you can be sure your competitors will be.
AI-driven BI can help identify new opportunities for expansion, such as untapped customer segments, new sales/marketing channels, new product lines and previously uncharted markets. BI is also instrumental in making smart choices as to when and how to dip your toes into these new revenue streams, as forging ahead without a plan can be an expensive and ultimately frustrating waste of resources.
Modern BI technologies are poised to help companies bolster profitability from a number of angles — like addressing wastage/inefficiencies, ramping up the value of customer relationships and tapping into new revenue opportunities.