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What Is Business Intelligence?

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In a recent tutorial we looked at the benefits of big data for small businesses. But even if your firm doesn’t handle that volume of data, you can still benefit from an analytical approach. 

Like big data, business intelligence systems were once the preserve of large companies with lavish IT budgets. But thanks to extra competition and the advance of technologies like cloud computing and software as a service, more and more small firms are taking advantage of the affordable options on offer today.

An Oxford Economics study in 2013 found that more than half of firms with sales under $100,000 were planning to use business intelligence within three years—a jump of 43%.

But be careful before taking the plunge. Between 70% and 80% of corporate business intelligence projects fail, according to Gartner research cited in this Computer World article.

So in this tutorial we’ll help you position yourself to make smart use of business intelligence. You’ll get a solid understanding of what business intelligence means, what benefits it can bring to your business, and how you can implement it successfully. We’ll also look at some examples of how companies are using business intelligence systems right now to help them get information about their operations and make better decisions.

Data Sharing GraphicData Sharing GraphicData Sharing Graphic
Working with business intelligence systems. (Illustration)

1. What Is Business Intelligence?

First things first. What do we mean by business intelligence?

According to technology research firm Gartner:

Business intelligence (BI) is an umbrella term that includes the applications, infrastructure and tools, and best practices that enable access to and analysis of information to improve and optimize decisions and performance.

In simpler terms, it’s about making better decisions in your business by analysing information. Usually that takes the form of a database or other software that pulls together facts and figures from various parts of your business and produces charts, reports and other insights.

You can use business intelligence solutions to analyse any aspect of your company. You could monitor the effectiveness of your sales efforts, for example, or the efficiency of your factory operations, the performance of different staff members, and much more.

2. Benefits of Business Intelligence for Small Businesses

Business intelligence systems can be costly and time-consuming to put in place. So what’s the benefit of doing it? What can business intelligence systems do for your small business? 

A 2014 report by Dresner Advisory Services found that the main reason small companies use business intelligence is for “better decision-making”. Other important reasons included:

  • growth in revenues
  • increased competitive advantage
  • improved operational efficiency
  • enhanced customer service

We’ll look at some specific examples of how companies get those benefits in the next section, but that’s a pretty impressive list already. It touches on most of the key factors that determine a company’s success.

Most companies already analyse data anyway, but it’s often in the form of pulling together a few spreadsheets in Microsoft Excel. That can be very time-consuming, and the results aren’t always what you’re looking for. Excel’s great for a lot of things, but sometimes you need a different tool to solve a different problem.

“When done properly, the analytics can provide insights into trend analysis that otherwise can't be seen,” said Dan Linstedt, president of Empowered Holdings in Saint Albans, Vermont, in an Inc Magazine article. “BI can also provide insights into the cost of acquiring new customers over time, and how those costs are related to ‘customer gain or loss.’”

3. Examples

So how are companies using business intelligence right now? Here are a few examples.

To Boost Sales

Customers are the lifeblood of any business, of course, and a business intelligence system can help you understand them better.

Online luxury women’s goods retailer Gilt Groupe is a prime example. Every day it sends out an email to its customers at 11:45am, previewing the daily sale, and customers then click through to buy (or not) from its website. Clearly, with a business model like this, the conversion rate from each email is absolutely critical.

The company was already collecting data on its customers’ browsing and shopping history and more, but was looking for a better way of analysing all that data and producing actionable results.

Gilt implemented a business intelligence system from SAS, enabling the firm to combine information from different sources and produce reports that helped it target its emails more successfully. The data produced allowed Gilt to predict much more accurately which customers would be attracted by which offers, and customise its emails to maximise sales.

The results:

  • More customers were attracted to new merchandise categories where they had not purchased before.
  • A 100% lift in conversion for women who were identified as being likely to shop on the men's site, but had not yet done so.
  • A significant increase in the conversion rate of new members (i.e. the number of members making a purchase rather than just browsing).

To Control Inventory

As we’ve seen in previous tutorials, controlling inventory is an important way to make your business more efficient, improving cash flows and profits. Business intelligence systems can help you achieve that.

“Cutting excessive inventory—and thereby the cost to maintain it—is one of the easiest changes a company can make to immediately affect its bottom line," Dwight deVera, senior vice president at BI provider Arcplan, told CIO.com. And a BI solution with a good dashboard, “that provides retailers better visibility into inventory, enables them to make better decisions about what to order and when so goods don't sit idly on warehouse shelves.”

You can find a number of ready to work with analytic solutions on our CodeCanyon marketplace. Such as this Analytics Dashboard Utility for Wordpress. Or grab a website admin template with easy to work with site dashboard from ThemeForest, such as the best selling Metronic - Responsive Admin Dashboard Template with a really attractive dashboad—ready to plug into your sites analytics.

Wine retailer The Wine House put this into practice, freeing up $400,000 in capital by using its new SAS analytics software to identify inventory items that hadn’t moved in more than a year.

Good wine doesn’t go bad, of course, but it does take up space and cost money to store. The Wine House held a sale to clear the excess, and has been using the software since then to pinpoint slow-moving bottles and promote them to move them out.

The company also uses that information to inform its future buying decisions. For example, the data showed that customers were buying plenty of $20 bottles of wine, but not so many $100 bottles. So The Wine House shifted to offer more of the lower-priced merchandise its customers wanted.

Other companies have followed a similar approach, such as telecoms company Asurion Asia Pacific, which used QlikView software to analyse and improve its inventory management, delivering a return on investment in just six months.

To Analyze Web Traffic

Some business intelligence systems are simple and well-known, and you’re probably using them already.

Google offers lots of analysis of your website visitors through free services like Google Analytics and Webmaster Tools, and taking the time to use them effectively can help you attract more customers and optimise your website to encourage them to buy.

Bob Shirilla started a small business after spending two decades at a large IT company that regularly used data analysis software. He told Inc Magazine that his sites, Keepsakes-etc.com and Simply-bags.com, “are doing very well in a very competitive product space. I attribute their success to the business decisions made by using the Google Analytical tools." 

Learn more about working with Google Analytics at scale, split testing experiments, and custom variables:

To Provide Better Customer Service

British startup company SureFlap already had a strong idea: a cat flap that uses microchip technology to let in your beloved pet and keep out other cats. But as founder Dr Nick Hill says, “Having an amazing product isn’t enough; you need to wrap it up with amazing customer service too.”

So the firm uses a tool called Service Cloud from Salesforce.com to send out hundreds of customer satisfaction surveys every week and constantly analyse the results. This allows SureFlap to identify and address problems, resulting in satisfaction scores of over 90%.

The system also notifies the customer service team of any individual survey responses with low scores, so that they can follow up with the customer and try to resolve any outstanding issues.

4. Implementing Business Intelligence

So now you’ve seen the benefits of business intelligence, and some examples of how small businesses can use it. If you’re convinced of its value, it’s time to look at implementing it in your company. In this section we’ll look at a simple process you can follow, and some examples of popular vendors you could investigate.

What’s Your Objective?

The first question to ask yourself is what you’re hoping to achieve.

As we’ve seen, business intelligence is an umbrella term for a wide range of solutions, in any area from customer relationship management to operational efficiency. So what’s your priority?

Do you want to boost sales, for example, or improve satisfaction among existing customers? Do you want to squeeze out more efficiency from your operations or your workforce? Be clear about the overall priorities and long-term plan for your business, and then consider how business intelligence systems can help you reach your objectives.

What Do You Have?

Once you’ve got an idea of what area you want to address, consider what data you already have. What information are you collecting right now, and what could you easily collect with the right systems in place? One of the main functions of business intelligence is to pull together data from different parts of your business and analyse it. So consider what kind of data you have available to feed in, as that will likely drive the results.

Also consider existing solutions you’re using, such as simple spreadsheets or databases. In some cases, these may be enough.

“There has to be enough data available so it can't be readily understood without assistance,” says Paul Massie, senior director of operations and IT for YouSendIt. “There's no point in implementing a BI if the data volumes are so small a person can look at the data and reach accurate conclusions.”

What Do You Need?

Once you’ve decided on an area of focus and identified what you have, it’s time to make a more specific decision on what you need.

If you’ve decided to focus on workforce efficiency, for example, and you already have data on employees’ attendance records, work hours, performance appraisals and computer usage, consider what the system you want to implement would ideally do.

Do you want something that integrates all your existing data and produces charts and reports showing you who’s performing best? Or do you want to identify new data sources and better ways of measuring employees’ performance?

Do you want to buy a simple software program, or have something customised for you? Do you prefer a cloud-based system, software as a service, or a software package that you install and run yourself? Do you want something that’s compatible with your existing systems, or something that replaces what you already have?

Once you’ve got clear answers to all these questions, you can start shopping around.

Sample Solutions

There are many providers out there, but here are a few to check out. The names and categories are taken from a recent report by Dresner Advisory Services.


  • IBM
  • Microsoft
  • SAP

Large Established Pure-Play Vendors

  • Actuate
  • Information Builders
  • Qlik

High-Growth Vendors

  • Logi Analytics
  • Pentaho
  • Tableau
  • Tibco

Specialized Vendors

  • Dimensional Insight
  • Dundas
  • Jinfonet
  • Klipfolio
  • Phocas
  • Targit

Emerging Vendors

  • Adaptive Insights
  • Birst
  • GoodData
  • Jaspersoft
  • Jedox

This is not an exhaustive list, of course, and there are plenty of other providers out there. But browsing through the offerings of these companies will give you a great idea of the various business intelligence systems available to choose from.

You can also roll your own custom solutions. Learn how to work with web servers and create an analytics dashboard in our End-To-End Analytics course or how to start self hosting your own analytics server in this tutorial: 

Next Steps

In this tutorial, we’ve arrived at a simple definition of business intelligence, discussed its benefits, and seen some examples of how other companies are using it to improve their performance.

The next step for you is to decide whether it’s right for your company, and start researching solutions. Follow the steps outlined in the final section of the tutorial to get clear on exactly what you’re looking for, and then start doing your research on different offerings from different vendors.

There are lots of options to choose from, so it can be confusing at first, but you’re also more likely to be able to find something that’s right for you and can help you take your business to the next level.


Graphic Credit: Data icon designed by Christopher Holm-Hansen from the Noun Project.

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