Leading a business is no easy task - it is all about identifying opportunities for growth and then working out ways to fully exploit them. Executives are constantly requiredto take business risk, as the response of the markets to particular goods and services can never be entirely predicted. But the goal for business leaders is to reduce this risk element as much as possible, and basing their decisions on quantitative information is perhaps the best way this can be achieved.
Data rarely holds all the answers, but in terms of guidance and evidential support for key business decisions, this may be the biggest asset the board has when planning its expansion strategy. For this reason, the increasing popularity of business intelligence (BI) solutions should come as little surprise. By investing a little more in IT, company bosses can make more educated decisions about the future direction they wish to take. They can use data to interpret the likely response of consumers to new goods and services, and identify both strengths and weaknesses in their organisation.
The importance of BI to UK companies
In a constrained economic environment, such as that witnessed since the start of the recession in 2008, it becomes even more important to make educated businessdecisions. With consumer spending power reduced, the strength of the market will not offset costly blunders brought about by ill judgment in the boardroom. Executives need to focus on driving revenue while also keeping a close eye on expenditure, ensuring they maintain a healthy bottom line.
As such, businesses now see BI solutions as a priority investment. A recent study conducted by IT analyst Gartner indicated that more firms are recognising the importance of business intelligence as they strive to deliver enterprise growth. The study found that IT leaders view BI as being as vital to their companies as mobile technology and cloud computing investments.
Mark McDonald, group vice-president for Gartner Executive Programs, said chief information officers (CIOs) who concentrate on IT as a force of operational automation, integration and control are "losing ground" to executives who see it as a business amplifier and source of innovation. "Effective leaders use technology, which includes IT, to strengthen the customer experience and eliminate costly internal distortions," he claimed.
In a separate report, analyst firm Ovum claimed that BI and analytics software will remain front and centre for IT and business agendas in 2012. The report found that as organisations seek greater business agility, BI technologies are continuing to evolve to meet this demand. This means users are gaining access to an ever-more sophisticated range of tools to support their decision making processes. Ovum added that more nimble analytics, leveraging new tools, technologies and approaches such as in-memory engines, columnar databases, appliances, event stream processing, data mash-ups and software-as-a-service platforms are coming to market. These technologies will be "key components" in achieving analytic agility in 2012 and beyond, the firm said.
Making the most of business intelligence
The BI market continues to expand - having witnessed double-digit growth in 2010 and 2011 - as more companies seek to benefit from advanced analytics. However, according to Ovum, the full benefits of BI remain elusive for many businesses. Madan Sheina, lead analyst at the firm, said growth in the BI software market has also been accompanied by rapid change, particularly in the way systems are built, and what is built.
"Similarly, the expectations of BI customers have changed, as they demand bigger, faster and cheaper systems," he noted. "Traditional BI technologies, architectures and processes are now struggling to keep pace. Many fail to address two fundamental business needs: agility and adaptability, which enable organisations to react quickly in today's constantly changing business and regulatory environment."
Mr Sheina said organisations are also looking at new types and sources, such as social media, streaming and mobile data to deliver broader and deeper business insights. "Big data is challenging BI systems to scale cost-effectively, which will require a rethink of traditional data warehousing and BI architectures," he noted. And this expanding scale will also put the spotlight on critical data-management issues such as data quality and data governance, he added.
The future of business intelligence
According to Simon Campbell, founder of Thesandpit.com, next-generation data management and business intelligence solutions can make a big difference to UK companies. He argued that modern solutions are better at delivering accurate data, which can ultimately result in better more educated decisions and effective leadership. Mr Campbell added that with next-gen tools, Big data can be effectively filtered and classified to provide accurate reporting and efficient workflows for engagement.
He said that with businesses increasingly reliant upon technology and IT processes, the volumes of data faced by companies will continue to rise. But it is vital that businesses interpret this data correctly, if they wish to realise a return on their technology investments. "If your reports are based on inaccurate data, the insights are worthless," he stated. "Business decisions cannot be made on inaccurate insights."
Used appropriately in the right context, business intelligence solutions have the ability to confer insight on company executives they would otherwise struggle to obtain. As such, such IT tools can help the board make smarter, more focused decisions, therefore reducing the risk of costly strategic errors and increasing the chances of adding value. Businesses and organisations are collecting ever greater volumes of data relating to their activities, markets and customers, but this only adds value if it can be analysed and manipulated in the right way.
Posted by Alex Boardman