For years, companies have used business intelligence (BI) to make informed decisions and improve their company’s bottom line. In fact, businesses who use BI will find they reap many of the benefits that come with it.
However, one problem with business intelligence is that companies’ understanding of it remains clouded with misconceptions. For many modern businesses, BI plays a key role in their data-driven organization.
Nevertheless, decision-makers must know these misconceptions to avoid letting them get in the way of their success.
1. Business Intelligence Is Only for Companies With Higher Budgets
One of the biggest misconceptions about BI is that it’s only for companies with bigger revenue, larger profitability and higher budgets.
The truth is that any company can use BI to improve its operations and make informed decisions. In fact, many small businesses are often more successful with BI because they have fewer preconceived notions about what it can do for them.
They’re open to exploring new ideas and getting the most out of the available software.
Instead of thinking of business intelligence as a luxury, consider it a necessity. BI allows businesses to learn about their performance and where they can improve — and that requires tools.
Even when companies are on a tight budget, they still have plenty of ways to get started:
- Learn about the most popular business intelligence tools and determine which might work best.
- Use free trials or versions of software to get a feel for what it can do for the business before committing to purchase anything.
- Work with an analyst who can help determine the right tools and implement them as needed.
2. Data Measurement Leads to Successful BI
Many companies that measure data believe they are using BI intelligently and successfully. Business leaders will often sit down and look at numbers, and they assume they’re making the most of BI.
Yet, unless the data they have enforces action, they are measuring in a way that leaves them standing in the same place.
Companies that use BI must make sense of the data and measure it correctly to turn it into actionable information. This would include tracking the right key performance indicators and ensuring they stay on target with their business goals. It also helps to identify trends and opportunities, so they can respond more quickly and appropriately when a change arises.
The more accurate data measurements are, the more effective they’ll be at providing insights into how the business is performing. For example, suppose there is an issue with one of the key performance indicators (KPIs). Data measurement can let business leaders know this so they can solve the problem before it becomes too much to handle.
3. BI Requires a Team of Data Scientists or Analysts
The idea that you need a team of data scientists or analysts to work with business intelligence is a huge misconception. While it’s true that data scientists are increasing because of a higher demand for collecting vast amounts of data — company leaders believe they have to hire professional interpreters to dissect it.
Business Intelligence is the process of gathering and analyzing data. Therefore, companies assume they need a team of data scientists to provide valuable insights and help them make better-informed decisions.
Though they do add value to any organization, there comes the point where businesses start diminishing their returns.
The truth is anyone can use BI tools to analyze their own data and make smarter decisions. Business Intelligence empowers employees with the information they need to do their jobs better and use it as a tool for growth.
Therefore, data scientists are not always necessary — and there are many ways businesses can get started with BI without needing an army of consultants or experts.
4. More Reports Means Better BI
Another big misconception is that the more data reports there are, the more benefits a company will sustain from business intelligence. This idea can be dangerous, leading to over-reporting and wasted time.
When companies have a lot of data, it can be tempting to create numerous reports. This is especially true when they have access to artificial intelligence solutions that can automate the process of analyzing large data sets and making reports continuously. They think it’s best to have all the information right before them.
However, this is not always a great approach.
Instead, it’s better to identify the most relevant data pieces and create one or two reports that are high-quality than creating five to 10 mediocre ones.
By creating fewer reports, there will only be a need for less time and effort, meaning there will be more room for making decisions and improvements.
5. It Is Another Way of Saying “Data Analytics”
BI and data analytics are two terms that organizations often use interchangeably. However, BI is the technology that makes data analytics possible. BI systems include data warehouses, data marts and operational reporting tools, which help companies make sense of the massive amounts of data they collect daily.
Business intelligence can also refer to a range of things, and businesses can use it in various ways, including:
- Monitoring and improving operational efficiency.
- Planning future growth strategies.
- Identifying new markets and customers.
- Predicting future trends and opportunities.
By contrast, data analytics focuses on analyzing and visualizing information in databases. Therefore, BI is not another way of saying “data analytics.” It’s a field with a rich history and its own set of skills, and people can apply it to various industries.
6. Business Intelligence Is Only About Gathering Data
Thinking that business intelligence is only about gathering data is a top misconception.
In fact, business intelligence is an umbrella term for several strategies and techniques. It includes everything from data integration and data analytics to predictive modeling and prescriptive analytics.
While BI projects may start with data collection — but only because without access to the right information, it is impossible to know where to focus the team’s efforts.
Once businesses have all the relevant facts, they can start thinking about how to use and apply them to everyday decisions.
Implement Business Intelligence the Right Way
The key to success is understanding business intelligence and knowing what to do with it. Businesses are constantly dealing with data — both their own and that of their competitors. Yet, to be innovative, companies must understand these misconceptions and recognize the true value that data can bring to their business.
Eleanor Hecks is the editor-in-chief of Designerly Magazine. She’s also a web design consultant with a focus on customer experience and user interface. She lives in Philadelphia with her husband and dogs, Bear and Lucy. Connect with her about marketing, design and/or tea on LinkedIn.