Because of that you can find many different definitions that define business intelligence as an application that will perform some analytics activities for your business. Another issue that I found at existing theories is that all tools focusing only on the analytics of internal factors available inside company. Because of that there are some missing elements:
- First of all, business intelligence is the process, not only an IT tool.
- Second, business intelligence must incorporate analytics of external factors in addition to internal factors.
Before you decide to implement business intelligence solutions into your small business you must see business intelligence as a process. In such a way, you will find that business intelligence as a process will increase the overall business potential energy of your business.
All changes or requirements for change will be predicted from the process of business intelligence and in such a way entrepreneurs can make better decisions. Maybe you think that you don’t need to have investments into the business intelligence because your small business is too small and there is not real need about it. However, this is wrong thinking because:
- Business intelligence as a process can be implemented without big investments.
- Second, there will be always needs for a decision making process and because of that also will be need for business intelligence as a process.
Business intelligence as a process can be free, but the tools that will allow you to automate the process are something that will require investments. Some areas where business intelligence can be used in small businesses are:
- External areas:
- Market research
- Analyzing of competitors
- Analyzing of suppliers
- Analyzing of different products
- Analyzing of new technology
- Internal areas:
- Inventory control
- Best selling products
- Sales comparing
- Customers analyzing
- Costs analyzing
- Financial analyzing
- Operational analyzing
Steps to Design Business Intelligence as a Process
As a process business intelligence must perform several different actions:
- Identify the need for business intelligence. What you want to track and analyze that will improve your decision making process?
- Collect the information. When you know what are your business needs you can define the sources of information and start collecting these data. Sources can be inside and outside your business. For example, if you want to track your inventories you will find information about that inside your company. If you want to track competitors you will find that informations outside your business as internet, newspapers, magazines, blogs…
- Analyze collected information. When you have required information you can start with analyzing. Here you must come to conclusions and extraction of knowledge from raw informations.
- Implementation of knowledge into decision making. If you have knowledge you can implement the new knowledge into a decision making process.
This is never ending processes of business intelligence. As you can see this process don’t require additional tools.
However, the process of collection and analyzing of informations can be simplified if we use IT tools in the process. If you collect a big amount of data it will be time consuming for you to analyze them and extract knowledge. Many of the datas will be in the text format that you must read first. I’ve used Text Mining to analyze the informations from news that I collect from web based newspaper according to the keywords. In that process daily I receive hundreds of textual materials with desired keyword that is mentioned keyword that I want to track. I cannot read all of that informations. However, with text mining I receive graphical presentations that present interpretations about important things in that news. If the informations is in the structured format you can use MS Excel or MS Access to make simple analysis as pivot tables that will give you some important hidden trends.
You can see that most important is to start with the process that will increase your business potential energy. After some period of time, you can see possibilities to invest in some BI solutions.