3 strategic processes that drive Business Intelligence

Business Intelligence refers to the use of data to holistically understand an organization's operations - past, present and future - and build a knowledge base on which to make intelligent decisions and take action for improvement.

According to a Gartner Group report, the global industry spends about $14 billion a year on BI software, an exorbitant figure that is due to the number of strategic processes that can be driven by business intelligence. These include the following:

1. Stock optimization

Business Intelligence allows you to perform exhaustive analysis of historical sales data and inventories of products in stock and on display. In this way, it converts them into useful knowledge to design supply, storage and distribution processes capable of supplying consumer demand without incurring in failures, such as overstocking or out-of-stocks.

However, BI helps organizations with marked seasonality to avoid problems when it comes to optimizing stock. For example, if sales of X product skyrocket during the Christmas season, it would be difficult to store the right amount and implement distribution processes that guarantee availability in the displays of each point of sale. But if the manager analyzes the data reflected by the software, he will know the dynamics of the demand and, thus, will be able to plan correctly the provisioning both in the warehouse and in the stores.

2. Detect changes in revenues and expenses

Maintaining proper control over cash flow is essential to keep the finances of any business healthy. Business Intelligence makes it easier to do so. The tool allows you to quickly process tens or even thousands of transaction records to detect changes in the organization's income and expenses. All so that you can take action to correct them - if they are detrimental - or enhance them - if they are beneficial.

For example, a data analyst of a retail chain detects, through BI, that sales revenues have fallen by 20% during the last month. For this, the system provides him with a deeper analysis of the information to lead him to identify the origins of the problem: in which store did sales decrease? which products are not selling? what are customers saying about it?

Regardless of the result, the analyst will have the necessary tools to solve the problem and try to reactivate sales.

3. Identify customer behaviors to make them more profitable.

A Walker study found that during 2020 the customer experience will eclipse both price and product, being a key differentiator for companies. In that sense, the competitive differential is centered on the quality of the buying journey. And what better way to optimize it than with customer demographic data on their buying behavior and preferences. Information that Business Intelligence provides.

Knowing what type of customers come to the company, what brands they prefer, what prices they are willing to pay, what products they are most looking for in a given season, and where they prefer to find them, are only the basis of knowledge to design a shopping experience focused on their requirements. In addition, a detailed analysis allows you to optimize all points of contact and make your relationship with the buyer more profitable. For example, by making them offers based on their purchase history.