4 Ways to Use Business Intelligence in Your Business
Business Intelligence can mine existing data to understand consumer trends and optimize your company’s inventory system.
Smart companies are adopting new technologies, such as business intelligence to get ahead. This helps them take advantage of opportunities, quickly respond to challenges and overcome threats.
According to inc.com, analyzing data can help transform performance, boost revenue, increase profits and improve customer satisfaction and retention.
Many companies are using business intelligence (BI) software to do this. BI is one of the quickest and easiest ways to analyze company data leading to better business decisions.
Companies generate lots of data on a daily basis. This data includes information about sales, marketing, inventory and finance.
Business leaders often rely on experience and ‘gut-instinct’ to make decisions. However, it’s important to know how to use company data to make ‘fact-based’ decisions and reduce human error.
Fact-based decision making enables companies to adjust to changes in their industry. A good BI solution makes this easy and available to anyone, not just IT experts.
While some BI vendors specialize in improving sales, a great BI vendor will offer a comprehensive business solution.
1. Use BI to Increase Sales
BI has improved profit margins for thousands of retail, manufacturing and distribution companies. It lets you identify where sales are performing well and where improvement is needed.
Tracking sales data at an individual customer level can reveal trends and opportunities to better position your company for growth and stability.
By understanding what your customers are buying, and what they are not, you will be able to spoon feed opportunities to your sales team. This will help them identify potential areas to increase profit within an existing customer base.
One study suggests that the “probability of selling to an existing customer is far greater than selling to a new customer.” Use BI to find ways to reengage and inspire existing customers.
2. Use BI for More Efficient Inventory Management
Carrying too much stock can be as damaging to your bottom line as having too little. A good BI solution will enable you to use data to analyze your supply chain and ensure you have optimal inventory levels. It will also help you navigate seasonal changes and identify changes in consumer demand. Here’s how BI helps with inventory management:
- Stock on hand – BI lets you quickly and easily see how much stock you have on hand for a particular product.
- Measure Overstock – Use historical sales data in your BI solution and compare it to stock on hand. If your historical data shows you sell very little of a product but you have a lot of it in stock, you can identify this as overstock.
- Understock – If historical data shows particular sales are increasing or a product has a long lead time from your supplier, you run the risk of understocking these items. This can lead to problems with fulfilling customer orders.
- Deadstock – Inventory that is sitting on the shelves, not being sold can be costly. Using BI to analyze stock on hand versus units sold over the course of a year can alert you of dead stock. You may see you have overstock in a product that has very little market demand. BI helps you quickly make data-driven decisions about minimizing inventory bloat.
Effective stock management is crucial to a company’s success. A promise to deliver products within a certain timeframe plays a key role in securing sales. Failure to deliver on time and in full will cause customers to turn to your competitors.
3. Use BI for Better Financial Management
Simplify analysis of your financial data with BI. Financial statements are just the tip of the iceberg. The right BI solution can blend financial statements with real-time data analytics to improve revenue and manage expenditures.
Profit and loss (P&L), balance sheets and cash flow can be analyzed using dashboards, graphs and charts to better manage your company’s financial health.
BI is also useful in helping you solve the challenge of managing rebates. What was once a chaotic process is now made easy. Eliminate painful spreadsheets and enjoy a simple, 360-degree view of your rebates.
4. Use BI to Free up Your IT Department
A good BI solution is one that is easy to use. Anyone can create their own reports and drill down on exactly what they need. It is simple to understand, even for non-technical people.
This is a big advantage for your IT department who are traditionally the only ones capable of running complex reports. As more data is available to companies, IT departments are under more pressure to run faster reports, leading to errors.
With self-service BI, employees are in control of their data. A good BI solution will also have plenty of training opportunities available to help you learn new skills and strategies.
IT departments can focus on efficiency and performance, and more effectively contribute to the business.
Using BI to analyze your data can reveal actionable insights, allow you to create relevant KPIs, identify strategic priorities, and use facts, not just gut-instinct when it comes to decision-making.