ca. 30 Minuten
nach Wunsch auch mit VideocallBusiness Intelligence... what are we actually talking about!?
A Quick Guide in 6 episodes
Today's topic – episode 1: What does the term Business Intelligence (BI) actually mean? How could I benefit from that, too? Basic answers to basic questions on the subject of BI.
About this blog series
Business Intelligence. Is it baloney or a term that matters? Does it even concern me or will I have deleted the word from my vocabulary by tomorrow anyway? You’ve probably heard about it and read about it, but you may not have ever quite understood exactly what it means? Anyway – Business Intelligence surely is a term that leaves many people in a quandary. Maybe this is you? Then maybe we’ve got something for you: This Blog Series offers you some help by providing six successive blog articles about what we are actually talking about when we use the term Business Intelligence – based on our extensive BI-centered work in consulting and development for the online sector. For everyone who wants to know more, and in particular, for online retailers.
INDEX OF EPISODES
- Episode 1: What’s the use of Business Intelligence? Do I need that, too?
- Episode 2: BI Fundamentals – Metrics and KPIs
- Episode 3: Important Metrics for Successful eCommerce (I): Traffic, Average Session Duration, Conversion Rate, Average Order Value
- Episode 4: Important Metrics for Successful eCommerce (II): Sales Metrics, Cost-turnover Ratio, Return Rate, Customer Metrics, Repurchase Rate
- Episode 5: Important Metrics for Successful eCommerce (III): The Customer Lifetime Value Special
- Episode 6: 5 Golden Rules for your BI project – Drawing a Bottom line
What's the use of Business Intelligence? Do I need that, too?
Recently overheard at nextel’s dmexco exhibition stand:
Customer: “So – what do I need BI for? My online shop’s turnovers are increasing by 23% every year anyway!”
minubo: “Well, using BI, you could possibly have made even better decisions making your shop grow by as much as 46% every year!”
This is a scene as tailor-made for teaching. After an introductory dialogue like this, there is only one thing left to add: This blog article addresses everyone who wants to learn why Business Intelligence has become something of a Must-Have these days, especially in when it comes to eCommerce. It’s all about being able to survive in these times of highly competitive markets – by the intelligent allocation of resources based on sustainable metrics.
Why do you need Business Intelligence?
The struggle for customers, sales and market shares becomes harder and harder online: More and more vendors (such as classic chain store owners or shopping clubs) with higher and higher advertising budgets are forcing their way into the markets. This increases the demands for optimization on every at an increasing pace. And that’s where Business Intelligence gets into the game: The great value of BI consists in making every little business process measurable and thus creates a sustainable basis of decision-making for operational units such as Marketing and Procurement. Or, to put it in a nutshell: BI provides holistic analyses for the development of sustainable strategies. To give an example: The best answer to the question “How much am I allowed to spend on a new customer per channel?“, seldom lies in simply dividing the cumulated acquisition costs by the number of transactions. Instead, companies, such as Zalando, allocate their advertising budgets with the help of BI by integrating additional metrics and thus view the customer as more of a long-term investment. Depending on their (especially future) purchasing potential, customers, segmented into groups, get individual strategic treatment in terms of marketing and communication that altogether leads to a striking increase in return on investments (ROI).
Use BI to get a holistic view of your business – to optimize customer communication as well as, for example, your selection of suppliers or products.
Which concrete difficulties does Business Intelligence handle for you?
The main problem in the implementation of forward-looking, strategy-oriented analyses of your business processes consists in the huge masses of data that are to be integrated. For as you know: Only the holistic view yield effective information! Every single department at your company has its own IT tools that transact the operative business. Enormous separate data stores develop that have huge, but mostly unexploited, potentials.
Now, the challenge is to connect the relevant data from the various sources in a reasonable way – for better, sustainable decisions. And this can hardly be handled manually anymore. With the various BI Solutions offered by the market, you can cope with this difficult task technically as well as substantially. First of all, a big integrating data store (Data Warehouse) is built as the basis of your BI Solution. The relevant data from the various sources is fed into this Data Warehouse automatically several times a day. On the basis of this aggregated data, holistically-generated metrics can easily be acquired – without manual effort, but instead, with features like easy to set discrepancy alarms, the possibility to recognize important relations by detailed analyses directly as well as, and most importantly, the automatic generation of actionable metrics and thereby concrete recommendations for action. In this way, BI Solutions create structural and strategic clarity through transparency as well as revealing never before seen relations between your company’s operative units.
Conclusion: BI makes you even more successful.
Learn more in episode 2 of our BI blog series: BI Fundamentals – Metrics and KPIs
