What is a Business Intelligence system?
Business Intelligence software is used to consolidate, analyze, evaluate and visualize company data. To make this possible, the BI system accesses data of a variety of sources, for example ERP or CRM software. The generated reports and visualizations support the management of business operations as decision-making tools.
Employing a suitable Business Intelligence solution affords the following advantages:
- Using company data efficiently in form of integrated analyses, evaluations and visualizations
- Using the full potential of available data for a sustainable development strategy
- Drawing relevant data from multiple sources, combining and presenting them in a visually appealing form
- Making precise, more substantiated decisions by recognizing trends and opportunities in turnover and profit
- Reducing reporting and migration costs
- Increasing data quality through continuous monitoring of the company data stock
The data obtained from the various sources are the keystones of good reporting & analytics. Even more important are the key figures and KPIs generated from this data. Measures are directly measurable values, such as quantities (e.g. stock levels), calculated values (e.g. turnover) and deviations (e.g. sales figures compared to last month). By contrast, KPIs (key performance indicators) represent values, that are not directly measurable. They rather serve as indicators of corporate effort or the success or failure of an operation relating to previously defined targets (e.g. achieved vs. targeted turnover).
Keeping track of measures and KPIs is worthwhile for every enterprise. Among other things, it helps controlling business processes and projects better, and verifying their effectiveness and economic efficiency. Analyzing and comparing measures and KPIs can also make it faster and easier to detect and eliminate potential weak points or wrong decisions. In turn, this can secure competitive advantages and increase the company’s success in the long term. The best measurements of target achievement, are achieved through long-term tracking of this data.
A growing number of modern visualization tools for analyzed data are finding their way into Business Intelligence applications. Analyses can now be presented in appealing and interactive charts, for example, that allow an intuitive and profitable study of the data. Advantages over conventional reports are:
- Intuitive exploration of the data with graphical user interfaces that show changes in real time
- Better understanding of the data and new insights from clear and appealing visualizations
- Easier answering of questions that arise during data analysis
- Greater speed and flexibility in data exploration
Despite all the modern visualization tools, companies are still using classical reporting practices. This makes sense – after all, there are pros and cons to each of the two solutions:
- Reporting is the rather static, yet highly detailed preparation of data in the form of facts & figures.
- Dashboards, by contrast, are the presentation of usually more specific information in highly aggregate and understandable form (e.g. in charts).
- Reports are typically a result of processing large amounts of data and information, but are substantially more complex and generally less graphically appealing.
- Dashboards, on the other hand, present less information, but keep a flexibly modifiable overview of all relevant indicators.