Connect with the world's leading business experts.
Get instant access to their expertise via world–class Q&A, Research, and Events.
0
What are some of the basic concepts behind business intelligence?
I’ve heard a lot of talk about data mining and analytics, but I don’t quite understand how it would help a company of say, 50 employees. Can anyone quickly & concisely explain the reasoning behind this technology?
Events
- Social Media and Content Marketing For Business Q&A Feb 14 @ 11 am PT
- #TNLive Radio: Workforce Marketing & Recruitment Feb 14 @ 4 pm PT
- The Rise of Pinterest in B2B Feb 15 @ 11 am PT
- ERP – Priming Your Business to Deliver Value From Strategy to Operations Feb 15 @ 1 pm PT
- How Not to Coach Your Salespeople Feb 16 @ 1 pm PT
Related Activity
4 Answers
Hi Kami,
Trevor Usken from the Focus community team brought your question to the TDWI NW Chapter group on LinkedIn, which I moderate, and I wanted to reach out to you with my answer and for more information. (http://www.linkedin.com/groupAnswers?viewQuestionAndAnswers=&gid=45685&discus...)
Being a BI practitioner myself with a passion for analytics, statistical mining & data visualization, I spend much time rationalizing where analytics makes sense and in what scenarios.
To best answer your question, I have a clarifying question for you:
--What industry / field / department are you trying to answer this question? It is a bid brought to say analytics works or doesn't work in a company of 50 employees without understanding what the context of the company is in mind. The answer would inevitably be, it depends, where with some clarification, I think I can get you to a better answer that that :).
Your profile shows you are a small business expert in the field of marketing with HR in your background as well. Especially, if the answer one seeks to target, as you say, should be both "quick and concise", more background is needed.
Here's why - Let's say, and I am only assuming here, that it has something to do with a small marketing company...
Having worked in the Market Research group within Marketing for Expedia, Inc, I can attest that there is a lot of data and ad-hoc analysis that goes on each quarter to show that for a given budget spent by marketing, a certain return was achieved. One doesn't spend millions to secure 30 sec. of airtime on SuperBowl sunday for a commercial campaign without expecting to gain something in return (eg. uptick of interest from new customers, or reminding old customers about ones product/service). To understand when, how, what to marketing and to whom is dependent on a set of meaningful analytics- everything from search engine optimization (SEO), to social media marketing (SMM), requires some level of analytics to understand and quantify the efficacy of a given campaign or the marketing program as a whole. Knowing that marketing is typically one of the largest line item expenses for an organization, it is even more important in times of economic uncertainty to be able to prove the value that marketing drives, in tangible and quantifying benefits, as opposed to traditional measures used, like unique visitor reach, focus groups, verbatims from customer satisfaction / shopper surveys - And while I am not saying these latter measures do not matter, because they have their place, they will not directly tie to the bottom line without high levels of statistical modeling to categorically group them or correlate them to financial measures like net revenue; and for a company of 50, this leve of analysis doesn't make sense.
But, by tracking the "direct" marketing programs metrics, collecting SEO and SMM (if those programs exist in house) into a database, along with CSat index scores and click stream (if website marketing is employed), one can conduct very simple analysis' using simple pivot tables to answer some important questions about the health of one's marketing program - Better yet, if the data shows success, help quantify the value added contribution made by the marketing team to secure budget funds for the following year(s).
-Laura
Hmm...seems appropriate to step back a bit here...
Kami, I think everything Laura says is accurate, but not precisely aimed at your question. Especially for a smaller business, I think the focus should be on business intelligence as a business goal, not any particular technological solution. So data mining and analytics aside for the moment, what "intelligence" would be most helpful to the running of your "business?" Do you need to know more about why your customers behave the ways they do, or more about how your partners choose their partners, including your competitors?
These are questions the leader of a business of any size can and should begin answering with tools no more complex than pen and paper, if need be. But it's the answers to questions like these that should drive any technology investment decisions you may make, regarding business intelligence or in any other area.
Once you've begun to develop and prioritize a list of key business intelligence needs, then you should start looking at available solutions. Before investigating specific vendors and products, however, you might find helpful a Focus Brief I wrote back in December -- "Business Intelligence: 5 Things to Watch For in 2010," at http://www.focus.com/briefs/information-technology/business-intelligence-5-th.... And of course, put the reach and power of the Focus community to work for you as you gather more "intelligence" about your BI needs and options. Thanks for the question, and please keep the community updated as you move forward. Good luck!
I will try to be the the most concise about reasoning behind Business Intelligence.
If you want to see and feel information out of your company's raw data, you need some form of BI. That BI will 'translate' data into business language (dimensions and measures) which is understandable.
You can gather raw data about your employees, your business etc. from various sources and have all presented in information-dense and rich dashboard. That way, you can see in one minute if trend of your sales is suddenly decreasing, if some of your salesperson is selling great or if production of some key item is below budget.
Point is, you will be able to understand negative/positive trends very fast and do something about it.
If at this moment, on the other hand, you do not have difficult reports and you don't wait for them 1+ days, if you know who are your best customers/ employees, if you are able to compare your actuals vs your budgets for any business dimension (product group, article, employee, key customer) anf if you don't see the need for fast and advanced analysis of your data, then you probably still don't need BI.
We tend to want to complicate what Business Intelligence is all about. But it is simply using data captured in the business (sometimes third party data too) to better understand the drivers of your business so you can better make decisions. How it is used depends on your business of course but the possibilities run the spectrum. First are the basic operational reports that show how you are doing at a given point in time or in contrast to similar points in time (i.e. year over year, qtr to qtr, etc). Secondly you can have dashboards that help drive real time understanding of your data (sales, shipments, critical metrics, etc). You can have basic ad hoc capabilities that allow you to incorporate different slices of the data to begin doing some real analtyics on correlation or impact different variables have on outcome. Examples may include how often certain medical treatment modalities are done and when for a given diagnosis. Or you can look at seasonality in sales, reltionships between a purchase of one product when another product is purchased. You can then get into the higher level modeling of data which can be used for marketing (better defining customers, determining customer loyalty, customer churn, customer stickiness, etc. This is basically data mining where you are looking for relationships between various variables. You can then use the data for predictive purposes. Examples might be when certain events may occur, impact of outside variables on sales, inventory management, etc. For a company of 50 employees you will need to evaluate where you are today relative to using your data and start from there. One big mistake companies make (big and small) is trying to do too much too quick, thus exceeding the capabilities and resources currently available. Hope this helps.
Answer This Question