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The Value of Business Intelligence


When we talk about intelligence in the context of our businesses and industries, it’s best we first establish what is meant when we say “intelligence.” We’re not referring to the individual intelligence each of us gains in school. This is not a discussion of class curriculum or degrees received. Business intelligence is the intelligence gained through the process of developing various data sets into an actionable deliverable. Intelligence is the information used to support a decision process.

Business Intelligence and Analytics Process

Information is the output of analysis performed on a report or a collection of reports. The analysis can be purely statistical in nature, process-based, or a combination of these and other approaches. Analysis results in information that, when placed in context, provides the intelligence needed to make decisions and take action.

So what do we mean by “reports”? Reports are the consolidation, and often, visualization of data. We graph, trend, summarize and table our data to condense raw inputs into formats that can be quickly and easily consumed. This process often highlights areas of interest like rising trends or declining percentages. It can also hide or mask some outliers or events that might be of value, which is why analysis of the reports is a key step in getting to actionable business intelligence.

If we say today’s temperature is above average by eight degrees, we may not notice that the normal span of temperatures is 15 degrees above or below average. The weather report may lead us to be concerned about rising mercury when in fact the temperature is well within normal historical trends.

The final component is data, the raw material collected during the processes and activities of business operations. Each data point entered and saved is a factor in our reporting, a tool in our analysis, and an indicator of the context needed to understand the intelligence. We do not use a weather report to track the performance of our car’s engine, but it could be said that high or low temperatures have an impact on its operation. Thus, intelligence is a summarized and analyzed reflection of our processes in the context of our daily business operations.

Investing in Technology

This gives us the first indication of where we find the value of our intelligence. The capture and collection of raw data takes time and money. Automated systems require purchase, implementation, and maintenance. The backend data stores also require installation and oversight. These investments in a business intelligence platform impact the bottom lines of every business of any size in today’s world. There are few, if any, transactions by businesses in the world today that do not involve this type of technology. Yet there is little to no value in the collected data in its raw state, nor in the reports derived by our calculations. In most cases, collecting data generates no real revenue.

So how do we realize the value of our technology investment? The answer lies in the action we take on the intelligence created by collecting, reporting, and analyzing our raw data. Data and reporting have no intrinsic value; they must be analyzed and placed in context to deliver a return on our technology investment. A weather report indicating rain is of little value if we do not take the umbrella.

There are many benefits to this process, the primary being the realization of return on the investment we’ve made in our technology infrastructure. The laptops and servers we use in our businesses today all require an outlay of capital to purchase, implement, and maintain. If we use these tools to simply collect data and let it sit, we receive no real return on the investment. Acting on developed intelligence can help drive business improvements that reduce cost, prevent unnecessary expenditures, and even generate new revenue opportunities. Actionable intelligence can help us identify new market opportunities, new markets for our existing products, or new products we’ve never considered.

Recognizing Returns

How do we realize these returns? The process can be as simple as a manager making decisions based on a report trend, or as complex as an enterprise-wide continuous improvement project. Analysis happens at every level of business, and we all perform some level of analysis while doing our daily jobs. More experienced managers and leaders require less analytical support for tactical efforts but lean more heavily toward in-depth analysis for strategic decisions and major projects. The less experienced require great analytical support, which is often gained through the experience of others.

The reality is, simply viewing a report and acknowledging its existence ensures a zero-dollar return on the technology investment. Analysis helps us squeeze the intelligence needed for us to act and drive value from our data and reports. The value of intelligence is driven not by what is produced in the development of actionable intelligence, but the actions taken based on the intelligence revealed. Cost reductions, cost avoidance, and revenue increases driven by decisions based on intelligence developed from our raw data established the dollar amount that is the value of intelligence.