What Is Business Intelligence?
The concept of business intelligence is nothing new. In fact, Howard Dresner (at the time, a Gartner research analyst, now Chief Research Officer at Dresner Advisory Services) coined the term way back in 1989. The technological landscape has changed massively since then, but business intelligence, which is a catch-all term for a wide variety of tools, applications and methodologies, still refers to the ways that we can deliver information to end-users without needing them to be experts in operational research.
By harnessing the power of business intelligence, you can turn big data into big opportunities for your company. Business intelligence allows you to collate and contrast vast quantities of data from internal and external sources via automated feeds or supplemental databases uploaded into the system. This data is then thoroughly ‘cleansed’ (because you should never base any decision on dirty data) before it’s analyzed and presented back to you as actionable information, against which you can run queries, create reports and effectively visualize your data.
The main aim of business intelligence is to present big data in a way that is useful to executives and staff in all departments, effectively democratizing data within your organization. Information that you may once have had to ask IT for (followed by a delay of a few days as you waited for a meaningful response) is now available to all at the touch of a button, allowing staff to make smart data-driven decisions, quickly and effectively. This so-called ‘self-service business intelligence’ benefits from multiple dashboards and reports, all of which can be tailored to the unique proficiencies and requirements of each department, and accessed from the cloud, minimizing training and support costs.
In today’s world of advanced data science, where data equals power and competitive advantage, business intelligence data management is crucial for the long-term survival of every business. Business intelligence data analysis can super-charge innovation within your organization, accelerating and improving decision making, driving greater operational efficiencies, identifying trends and opportunities, and flagging potential risks before they become damaging.
Why Business Intelligence Is Essential for E–commerce
E–commerce is at the epicenter of advancements in business intelligence, and an industry in which business owners have seen dramatic increases in revenues and market share as a direct result of business intelligence data analysis. Business intelligence for e–commerce is most effective when external market data, such as competitors’ pricing initiatives and marketing efforts, is combined with internal company data, such as sales reports, marketing reports, and detailed customer profiles.
Vast quantities of data that was once stored in endless columns in countless Excel files (and was utterly overwhelming) can today be used to identify never-before-seen patterns and trends, and make eerily-accurate predictions. You can pick apart your website at the most granular level to discover which products are driving repeat purchases, where the friction points lie in your online purchasing process, and what first purchase behavior looks like on your site.
Inventory management is a particularly sore point for many e–commerce businesses and an area in which the predictive power of business intelligence reaps enormous dividends. Inventory is money: too much stock on the shelves means less cash in the bank, and too little means missing out on sales, which can be even more detrimental to your bottom line. Nevertheless, inventory management is something that few e–commerce businesses get right.
With business intelligence and its machine learning capabilities, you can assimilate inventory reports (stock levels, lead times, etc.) with sales data, marketing spend, trend analysis, competitor activities, and any number of other relevant information types. You can then accurately predict how much inventory you need and when you need it. Conversion rates and customer satisfaction dramatically improve as you get your inventory turnover under control. After all, no customer wants to be told that an order they are relying on is no longer in stock.
Pricing is another area in which business intelligence is a proven game-changer. When making a purchase decision, your customers shop around, comparing your prices with those of your competitors, to see who is currently offering the best deals. Business intelligence allows your business to do the same, only automatically and at scale, by monitoring your competitors’ prices (directly or through price comparison portals), and instantly syncing this information to your pricing system. It can then be combined with various internal and external data sources to maximize your sales without sacrificing your margins.
In a world where customer experience makes or breaks an e–commerce business, business intelligence gives you a total view of every person who interacts with your site. By segmenting your customers tightly across metrics such as behavior, lifecycle stage, geography, and other demographics, you can treat each one as an individual, increasing loyalty and satisfaction, fuelling repeat purchases and boosting customer lifetime value. The bespoke qualities of these customer-centric relationships can percolate into every customer interaction you have, from the ads you show, to the nature and wording of marketing and transactional emails you send, to your call center scripts and beyond.
Cross-sells, up-sells and top performers are great, but we are talking about so much more than that! Business intelligence allows for uniquely tailored shopping experiences that mesh seamlessly with your marketing efforts across all touchpoints. We are living in an increasingly omnichannel world. Your customers are researching their physical purchases online, researching their online purchases in-store, and encountering immersive marketing experiences in social. E–commerce managers need just one business intelligence data management system to serve as their central repository for this rich and complex web of customer information.
Finding the ‘Truth’
Business intelligence’s power lies in its ability to assimilate large and often incongruous data sets from various channels into an all-encompassing ‘truth’ for your e–commerce business. This is a ‘truth’ that is totally up to date, instantly accessible, and presented to each user with the utmost clarity, providing you with a rock-solid foundation from which to build and run your e–commerce business.
Only with such a holistic, bird’s eye view of your e–commerce business can you drill down deep enough into your data to identify inconsistencies and solve the mysteries of critical but perplexing events. For example, you can finally find out why one of your product categories is performing so poorly this month; what caused that massive traffic spike you saw last week; or why your new customers are dropping off at the pre-cart? Things finally start to make sense.
If your data is locked away in silos (from your CRM to vendor databases, CSVs of historic transactions and Google Analytics) then crucial discoveries are off-limits and yet to be acted on in your business. Business intelligence shouldn’t be part of your five-year plan, it should be your here and now. Don’t risk falling behind and getting stuck in a never-ending game of catch up with your competitors.