Why Business/Competitive Intelligence Helps The Organizations

BI or Business Intelligence is a highly significant driving force behind the success of any business enterprise. It’s a culmination of the efficiency of people and processes for identification, compilation, storage, interpretation and application of data made available through IT. All leaders have to face up to severe challenges in taking their organizations to the top. Success implies gaining and maintaining a competitive edge over others within a specific industry. Today’s complex business environment is essentially an information driven economy. In this context, a built-in sound BI system is the best tool for aiding business executives for strategic decision making in guiding their organization to success.

BI is all about the multiple functions of defining, collecting, analyzing, compiling and distributing the intelligence relating to products, suppliers, customers, competitors and many other aspects relevant to a particular organization depending on its own peculiar range of activities. Business Intelligence is derived from information. However, If the information cannot be used effectively for strategic decision-making by an organization, that information falls far short of BI expectations.

The management of an organization trying to lead it to success without being armed with tools of business intelligence is like a captain of a ship trying to navigate it without a compass and a rudder. Gathering business intelligence is an accepted business practice. It is not something unethical. It should not be confused with the illegal activities of business espionage. Knowing what your competitors are doing and the changes taking place in your industry are important for assessing your weaknesses and strengths and keeping a competitive edge over your rivals. This aspect embraces competitive intelligence, which is something that goes beyond the normal concept of analyzing competitors. It involves placing much greater emphasis on making an organization more competitive in relation to its broader environment inclusive of all its stakeholders. The stakeholders of course comprise shareholders, customers, suppliers, technologies, distributors, macro economic data, the competitors themselves etc.

Changing consumer trends and patterns for your product/s due to the availability of cheaper substitutes put out by competitors, state of the economy etc.; and introduction of advanced technologies that make today’s techniques obsolete overnight are few examples of significant changes taking place within a business environment. Some of the sources of BI to be derived through IT are the internet, newspapers (especially Business Week, Wall Street Journal and Fortune), radio, TV and your own suppliers and customers in addition to other primary and secondary sources like trade exhibitions, trade conferences, forums, blogs, market research, financial reports, statistical databases, information centers, libraries, online advertising, subscription databases, news aggregation services etc.

You will not find a company’s strength in BI quantified in an organization’s balance sheet; neither is it taken into reckoning in any of the accounting ratios calculated for ascertaining the worth and status of a business. Nevertheless, it exists in every organization although at different levels of effectiveness. It is something comparable to Goodwill for its hidden nature, but far more versatile and far-reaching in its implications. It is an intangible asset that should be there at the core of every business enterprise. BI should form the basis or foundation for all strategic decision making in an organization. When an ideal BI environment exists within an organization, it should be a catalyst for effecting changes incorporating the latest trends with business acumen. The knowledge of the strength one’s BI system as a whole would enable one to forge ahead with the planned change with absolute confidence. For example, before we try to assess what our most profitable production centers are, we must be able to articulate the difference between profitable, more profitable and most profitable centers.

Business intelligence was split broadly into four categories by practitioner Estelle Metayer. They are, namely Strategic (concerned with the long term), Tactical (short terms implications), Adhoc and Continuous. Some companies depend on purchased BI software for the bulk of their business intelligence requirements while most organizations employ analysts to work on computers and databases in formulating their own BI methodology to fit in with their respective requirements. They create the necessary Key Performance Indicators (KPI) more popularly with Goal Alignment, Baseline and Metrics related Queries.

Goal Alignment Queries examine your goals and at what areas they are specifically directed at, such as a higher rate of profit per unit, an enhanced segment of the market share, increasing your customer base, finding alternative suppliers and sub contractors (if any), launching an entirely new income stream etc.

Baseline Queries are concerned with your current methodology and approach to gathering and integrating data, detection of their weaknesses and strengths. They help determine which specific tools are performing well, the weaklings, the ones that need tweaking and also what tools could be added to further enhance performance.

Metrics Related Queries are among the most important within a system of BI. Data that cannot be properly measured and quantified is of no value to any business entity. These queries try to identify areas where proper measurements are not being made with a view to finding solutions to their accurate measurement so as to be useful for BI purposes. Properly measurable data, facilitate their easy and accurate analysis to determine what work for the organization what do not.

Some advantages of BI:

• With the right type of business intelligence, you can avoid unpleasant surprises by anticipating the possible moves by your competitors. You can also minimize the time you would need to respond effectively in the event of a competitor gaining some ground over you.
• For example, major airlines use BI for planning their own strategies for pricing, marketing and production. As a result, they are able to counteract dog eat dog tactics adopted by their competitors, by responding with revised fares for different routes; sometimes on a daily basis.
• Advance detection of risks, opportunities and other market conditions. This is also called the Early Signal Analysis (ESA).
• Maximizing profitability and minimizing costs.
• Improved Customer Relationship Management (CRM).
• If you were to ask a Company CEO where his company would be in 3 years from now, the level of accuracy to which the CEO is capable of making a realistic prediction depends on the strength of the business intelligence in the possession of the company and how well they are applying their available BI for strategic planning and decision making.