9 examples of business intelligence use cases for companies
BI tools and applications can help improve decision-making, strategic planning and other business functions. Here's a look at nine top BI use cases for organizations.
Business intelligence applications can deliver value to every type of organization and department within an enterprise, making BI one of the most widely used technology-driven processes.
BI is used to analyze data and generate actionable insights that help drive business decisions across industries, from agriculture to financial services, manufacturing, retail, healthcare and many more. It's also used in nearly every department and functional domain, including accounting and finance, logistics, marketing, sales, customer service, HR and manufacturing operations.
"It's hard to imagine where business intelligence isn't just part of what business does," said Nick Kramer, vice president of applied solutions at consulting firm SSA & Co.
Moreover, workers throughout an organization -- from the C-suite on down -- use BI to understand how the business is performing. In addition to delivering tailored insights that help executives with strategic decision-making, business intelligence tools give executives comprehensive views of performance metrics across departments or regions, said Josie Baik, vice president of technology and data solutions at Globant, an IT and software development company.
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For example, business leaders in a global hospitality company can use BI software to view the marketing cost per booking at its hotels worldwide and then drill down to see the cost per booking in each region and hotel.
Senior and mid-level managers can also use BI on an operational level to track execution against their company's strategic plan, Baik said. That lets them determine if they're ahead or behind schedule in meeting the plan's objectives. They can use it to identify inefficiencies and examine ways to optimize business operations -- for example, by redesigning distribution routes to save fuel, thereby reducing costs and boosting sustainability.
At the tactical level, operational workers can use BI to understand their performance on different tasks; measure productivity on a day-by-day basis; and inform decisions on customer interactions, supply chain processes and other activities.
Why is business intelligence important?
Business intelligence gives organizations and their employees a way to measure how they're doing, which is why it's such a critical capability for every enterprise.
"To get measures and hold your business up to scrutiny, you need BI tools," said Kurt Schlegel, an analyst at Gartner. "Companies need dimensions and measures to provide insights. There's no area in a business that doesn't need to know how it's doing."
Given what BI does, it's no surprise that Schlegel called the technology a "metrics platform."
Business intelligence tools ingest and analyze data generated from the organization's own systems and, if applicable and available, from external data. The tools then display the analytics results in reports and BI dashboards. They also enable users to drill down on insights, letting them explore and analyze the underlying data at increasing levels of granularity.
These BI capabilities give business users a true picture of how the organization is performing as a whole and in numerous particular functions. They can also track and compare performance against other companies. This lets organizations make data-driven decisions rather than using intuition, personal experience or guesswork.
9 valuable use cases for BI across an organization
The following are examples of how organizations commonly use business intelligence tools to support tactical and strategic decisions across their operations.
1. Track KPIs and other metrics
Organizations regularly track dozens, even hundreds, of KPIs. It's impossible to track and understand that volume of business metrics without the aid of technology.
This is where BI shines: by identifying the KPIs to track and layering in other data points that add more dimensions to those KPIs.
Additionally, BI analysts, other data analysts and regular business users can use BI tools to add weight to specific data points that are more influential than others. That process helps organizations understand how those elements affect the KPIs.
Using BI to track KPIs is "table stakes" for organizations now, Schlegel said, given how fundamental the task is for business success.
2. Accelerate and improve business decision-making
BI brings together data mining, data analysis and data visualization to give executives, managers and other business users a comprehensive view of enterprise data. That information lets them make business decisions based on what's happening in their organization, market and customer base and to make those decisions more quickly than if they relied on manual ways to collect and study data.
Better decision-making is another standard use of BI tools within the enterprise, coming in at the top of the list of use cases alongside tracking KPIs, said Rayna Xu, assistant professor of information systems and analytics at Miami University's Farmer School of Business.
As an example, Xu pointed to venture capital firms' use of BI to analyze data from various sources to determine which startups are likely to turn a profit within a specific timeline. Venture capitalists can then use this information to determine and prioritize which companies are worthy of their investments.
Others pointed to enterprise use of real-time BI and analytics capabilities to understand customer buying trends, compare the success of different customer engagement programs and measure customer lifetime value as examples of BI's power to aid decision-making. Such uses enable marketing managers and business leaders to make almost instantaneous decisions on how to proceed in those areas.
3. Optimize business processes to increase productivity and efficiency
The volumes of operational data in a typical organization can be so vast that trends aren't obvious to either the workers involved in specific business processes or the managers overseeing them.
But BI technologies, including embedded analytics tools, can pull together reams of data from ERP systems and other business applications to uncover dynamics within operations that need attention.
For example, BI tools can identify inefficiencies in manufacturing processes, bottlenecks in supply chain, and unbalanced IT networks in which some systems are overloaded and others are underutilized. To illustrate BI's value here, Xu said a manufacturer could use BI tools to analyze the performance of the machines on its factory floors or its various production lines to identify those that are slower, determine why they're lagging and then key in on ways to improve their output.
4. Analyze customer data to improve marketing and sales programs
BI gives marketing and sales teams in-depth information on the needs, preferences and buying patterns of existing and potential customers by analyzing data from multiple internal and external sources. The goal is to make customer outreach efforts more successful, improve the customer experience and, ultimately, increase sales by better understanding customer behavior.
The BI-generated insights take guesswork and assumptions out of the equation, enabling organizations to design more effective marketing campaigns, develop the right sales pitches and promotional offers, target the right demographics with the right message, and create new products and services that best match the customers they're seeking to serve. All of that can lower marketing and sales costs while also boosting revenue.
"The biggest contribution from BI is helping to know your customer, their purchase behavior and their pattern of engagement or disengagement," said Shan Duggatimatad, global data and AI-enabled analytics leader at Randstad Digital.
5. Aid corporate and business executives in strategic planning
Strategic planning is another core business intelligence use case, Baik said, as BI tools give executives visibility into "areas of success or concern" across their entire landscape and "lets them see cross-functionally, departmentally and regionally to get that comprehensive view," she said.
In other words, BI "allows executives to see what's going on with the organization -- to see areas of growth or innovation. It gives them that strategic view," Baik said.
Moreover, the ability of BI tools to ingest and analyze not only an organization's own data but also data from external sources, such as economic and weather forecasts, gives executives a more complete view of the future world in which they will need to compete.
That's a particularly critical capability for organizations if they want to remain competitive in today's digital world. Rapidly changing market dynamics can create a need to adjust a company's focus and business strategies just as quickly, said Bipin Prabhakar, chairperson of the information systems graduate programs at Indiana University's Kelley School of Business in Bloomington.
6. Identify problem areas in business operations
Organizations also commonly use business intelligence to identify and understand problem areas within their organization. "The analytics can show where there is an issue with efficiency in the operations or to find out where in a workflow something went wrong or why a process takes so long," Xu said.
A company, for example, could look at profit per geography to determine locations that perform well and those that trail. They can then query the data further to uncover what specific factors, such as varying productivity rates in each geography, are causing some to excel and others to lag.
Additionally, BI tools can help companies determine how to address the problems they uncover, Schlegel said. "There is some real insightful analysis that provides diagnostics on how to improve."
For example, a company that falls short of its customer retention goals could use its BI capabilities to determine whether those departing customers left due to service, cost or other issues, Schlegel said. BI tools can then predict the probability of better retention rates based on various interventions and actions.
7. Support quality control efforts
Similarly, BI supports quality control, Prabhakar said. Through its collection, analysis and visualization of data, it can spotlight anomalies in products that indicate a problem with their quality. It can monitor processes and KPIs in workflows, surfacing trends that indicate areas of concern in service.
Additionally, Prabhakar explained that BI platforms let users delve into the data so they can pinpoint where and why problems are happening. This lets users quickly address and fix problems that affect the quality of the organization's products or services.
8. Detect fraudulent activities
Fraud detection is another common use of BI, most notably in the financial services sector, said Peter Mottram, managing director of the technology consulting practice at Protiviti.
BI systems, supported by machine learning algorithms, can monitor transactions and other activities to identify and understand patterns and anomalies that could indicate fraud. Those systems can create displays, dashboards and alerts that let analysts quickly take action. Furthermore, BI systems in conjunction with automation can take action in real time to block suspected fraudulent activities.
9. Uncover hidden insights in data sets
Mature organizations use business intelligence to help find insights in data that humans can't spot on their own. For example, they might use BI to identify new business risks that need to be addressed, Baik said.
BI might also be used to identify previously undetected patterns or trends in a data set that an organization could use to gain a competitive advantage over business rivals. "There are also some happy accidents when you use BI tools to investigate data," she added.
For example, software vendors often use BI to study how customers use their products in unexpected ways. The vendors know they "can't anticipate all the ways users use their products," Baik explained. They can then use that insight to develop new features that improve their products.
Such examples show why BI's ability to uncover hidden insights might be one of the most valuable use cases of all, Baik said.
How can BI benefit an organization?
The business intelligence use cases listed above help organizations reach their goals and objectives, such as improved customer experience, increased operational efficiency and more consistent product quality. Those outcomes, along with those produced through the use of business intelligence, deliver various benefits to the organization.
The following are some of the key business benefits generated by an effective BI strategy, covering all of an organization's departments and business units:
- A positive return on data investments. Organizations have been investing in their data programs for years, with many seeing less-than-stellar returns to date. But as organizations mature their use of BI tools, they see higher ROIs for those data investments. As a result of those high ROIs, organizations also often feel motivated to further mature their data programs and seek new opportunities to put their data to work by powering more automation and AI uses. "The most important thing business intelligence helps us do," Baik said, "is turn data into an asset for the organization."
- An improved financial position. Organizations that use BI to drive efficiencies in current workflows, optimize operations or to identify trends that indicate growth opportunities can expect to save costs as well as increase revenue and profits. "BI is definitely important because it can help companies make more money," Xu said.
- A competitive advantage in the market. The outcomes produced by the use of BI -- lower costs, improved customer service, new initiatives undertaken after identifying a trend in the data -- generally put organizations in a stronger position in their markets than organizations that aren't using BI as often or as effectively. "With the fast pace of digital transformation today and data now so widely available, gaining that advantage is becoming more and more important," Xu said. "Business intelligence is becoming more important for companies to maintain their competitive edge."
Mary K. Pratt is an award-winning freelance journalist with a focus on covering enterprise IT and cybersecurity management.