The underlying goal of any enterprise data strategy is to increase profitability. But what is the link between business intelligence (BI) and analytics tools and measurable profit outcomes?
How Can BI & Analytics Drive Profit?
There are myriad ways in which business intelligence and analytics tools can drive profit, especially when you consider the wide variety of sectors and industries currently harnessing data analysis.
Here are just three examples of how advanced analytics position an enterprise to boost profitability, either by increasing revenue or decreasing expenses.
Eliminating operational inefficiencies
Before companies can streamline their operations to reduce costs and maximize production, they must be able to identify the sources of inefficiency. This is where BI and analytics come in.
Investopedia gives one example of how this could look in action: The engineering team at a manufacturing plant can use analytics to understand equipment downtime, runtime and maintenance — then make savvier decisions on how to utilize machines with the least amount of disruption and malfunction. The intended result is to get equipment running as close to peak capacity as possible while heading off costly breakdowns.
Another case study here would be a hospital using analytics to closely audit its staffing patterns with an eye for hiring and scheduling redundancies — something that can eliminate confusion and frustration on behalf of employees while also making sure the right people are on duty in a cost-effective manner.
Optimizing the customer experience
No matter the niche, deeply understanding the customer experience so as to anticipate their needs is necessary to boost customer retention. BI analytics tools put relevant customer insights directly in front of marketing, sales and customer service teams — helping them make day-to-day decisions with customer behavior in mind.
As one expert writes for Forbes, advanced analytics help decision-makers see “where [customers] find value” as well as where they encounter friction. Getting ahead of customer needs and wants is key to delivering an excellent experience, which in turn builds loyalty and drives conversions. If your enterprise fails to capitalize on the latest customer analytics, you can rest assured your competitors will in this day and age.
Uncovering new revenue streams
Chances are, new revenue opportunities are lurking right under the nose of even the most ambitious teams. Artificial intelligence-driven analytics are particularly adept at uncovering these hidden sources of revenue, as their algorithms can mine huge amounts of data with an eye for interesting patterns and relationships between data points. Upon becoming aware of these potential sources of new revenue, human decision-makers can act swiftly to harness them.
Driving Decisions with BI & Analytics
All these examples of ways in which business intelligence and analytics technology can drive profit have something in common: They hinge upon data-driven decision-making. That is, turning the insights produced by analytics software into a positive effect on profit requires effective decision-making based on the insights gleaned.
While having the right BI and analytics tools to produce insights for users forms the foundation, how company culture relates to data also impacts whether these insights ever “see the light of day” in the form of real decisions. Creating a data-driven culture not only encourages employees to make the most of the analytics tools at their disposal, but also to incorporate data into their everyday communications and decisions. Only a data-driven culture will reward employees for talking about data, sharing interesting insights and making choices based on them — ultimately strengthening the connection between analytics tools and profitability.
With the right BI and analytics tools and a data-driven company culture, employees are primed to make consistent decisions capable of increasing profitability.