Corporations today are sitting on piles of data collected through various Transaction Processing Systems (TPS). But most companies treat these piles of data just as historical data and keep them just for the sake of . These piles of data are lying on their backups gathering dust without seeing the light of the day. After all who wants to go through piles of old data.
But smart companies are going through these piles and are getting smarter. They are allowing them to find out what their customers were up to and based on this intelligence they can go one step further and predict what their customers will do next. Now that is real intelligence, wouldn’t you say? If you can know before hand what your customers are going to be up to, then you can be better prepared. It’s something quite similar to going into an exam with knowing the questions beforehand.
What if you can turn these piles of junk in to a source that for a crystal ball that will predict the future for a business? What if it can tell you which customers are likely to bring you the largest
quotient of revenue over time, which items would fare better if they are tagged to a promotion scheme, which customers will make use of your planned promotions, which new products are ready for the market? How likely is fora customer who buys product A to also buy product B? Which products should be stacked close-by in supermarkets? There was one classic example of one US supermarket finding out that when beer is placed closer to pampers in supermarkets, the beer sales surged.
Sometimes business owners and managers think they know the market and they seem to think that everything is quite obvious. But some of the things that have been found through business intelligence and learned the hard way over time prove otherwise. Most of the time, the truth is not what it seems. It may be quite the contrary.
But all of this is not so easy as it sounds. It takes time, a well thought out plan and a whole load of money to gather this intelligence. The main cost of this is the quality of your junk pile. Well, if it is really junk, it will not be able to tell you much, or even worse, it might tell you all the wrong things. But if you take the pain to collect the required data from multiple sources and computer systems with a military like attention to detail, you might arrive at the truth about your business. And be ready for a surprise, for this ‘trust’ may just not be what you thought it was.
A recent executive briefing from the computerworld.com web site called “Business Intelligence for Smart Decisions” points out several tips about business intelligence. Here they are:
1. Truth is rarely what you see in plain sight.
2. Be selective about what you implement. Wrong information can lead to wrong decisions.
3. Your BI data is the most valuable asset of your company. Protect it!
4. Make use of “predictive analytics”. This is the closest you’ll get to a crystal ball.
5. They are not only for the consumption of higher management. Everybody can do wonders with the right kind of information.