Staying at the forefront of competition is crucial to thriving in a competitive business environment. Â It takes more than management intuition to make sound business decisions and be ahead. Â Accurate and current information derived from data analysis, reporting, and query tools — collectively called Business Intelligence— enable organizations to transform volumes of data to valuable information for better business decisions.
Business Intelligence is the set of tools and systems crucial to the strategic planning of an organization. It encompasses theories, methodologies, processes, architectures, technologies and applications that transform raw data into meaningful and useful information. Â It involves collecting, integrating, analyzing, and presenting business data.
Impact of Low Data Quality
The recent explosion of data volume in business is overwhelming the data management systems of most companies. A lot of companies are drowning in data while producing the information they need. But without proper data, or with too little quality data, investment put into BI will not matter. As the cliché goes ”œgarbage in is garbage out”�. Negative impact of poor data quality can be felt in several areas of the organization.
Financial impacts result from inadequate or poor data associated with costs, financial management, and revenues. Â Symptoms of problems include increased operating costs, decreased revenues, missed opportunities, reduction or delays in cash flow, or increased penalties and charges.
Confidence and Satisfaction-based impacts come from the organization’s inability to meet expectations in the marketplace or to satisfy the internal ability to execute against strategy. This is felt when there is a decrease in customer, employee, or supplier satisfaction, a decrease in the overall organizational trust, low confidence in forecasting, inconsistent operational and management reporting, and delayed or improper decisions.
Productivity impacts are related to how well the organization measures operational efficiency and how well it responds to the results. Signals that require attention include increased workloads, decreased throughput, increased processing time, or decreased end-product quality.
Risk and Compliance impacts involve how data issues can increase the exposure to various risks, whether compliance risks, financial risks, or the ability to execute properly in the marketplace. Related areas include investment risks, competitive risk, capital investment and/or development, fraud, leakage, and compliance with government regulations, industry expectations, or self-imposed policies (such as privacy policies).
Effective Data Management
Efficient and effective data management processes are designed to enable organizations to make better use of their data assets, and turn raw information into actionable insights. The significant dependence on data to run and improve the business suggests that most organizations rely on their data as much as any other asset.
In an environment where data is created, stored, processed, exchanged, shared, aggregated, and reused, the best approach to understanding the value of data is to realize the expected value of business insights derived from it.
Generally, effective data management enables the business to
- Immensely understand customer behavior and respond with superior customer service, building long-term profitable relationships
- Have a deeper and better understanding of its own operations and processes to develop improvements and efficiencies
- Manage its priorities and focus its investments and resources
- Improve revenues and profits
- Appropriately manage internal and external relationships with employees, vendors and other stakeholders
Well managed data can provide valuable insights into business operations, trends and customer behavior, provided that it is collected, reported on, and analyzed using the best practices.
Implementing Business Intelligence
Taking the macro approach to BI implementation, the organization needs to assess the following for their readiness:
- The level of commitment from senior management
- The level of business need for creating a BI implementation
- The amount and quality of business data available.
12 Tips and Proven Practices on Effective BI Implementation
The Value of Data
Business Intelligence directly impacts the business performance of an enterprise by significantly improving the ability to make smarter decisions at every level of the business, from corporate strategy to operational processes. And while data usage involves analyzing important data values, the real data value is actionable business insight being used to make effective business decisions.
– Data Czar @ DEO
Prev
