A simply put way to define business intelligence or competitive intelligence would be to say that business intelligence is a combination of those tools which make a business more 'intelligent'. Business intelligence tools arm the employees and the owners with information and business development ideas which can help the business grow. Business intelligence tools help to tell the employees more about the business, its product offering, its standing in the market and in the mind of the consumer.
What Are these 'Business Intelligence Tools'?
Most of the time, these business intelligence tools refer to statistical data mining and data warehousing softwares. But more and more people are agreeing to the fact that the definition of business intelligence tools ought to also include querying and reporting softwares. Here's how the common business intelligence (BI) system works.
Now a business conducts all sorts of market research to receive feedback about their products. They use questionnaires, client calling, all sorts of ways to receive feedback from the customers, which they feel will help them improve their product/service offering. The data they receive from the market surveys is then fed into a data management package by the data entry operators. These software packages churn the high volume of information and try to figure out a logical sequence from the different responses of the customers. This is known as data analysis. The end product of it are graphs about the customer response that tell you all about the responses of customers. Read on for a good business intelligence strategy.
Clearly, all this is rather difficult to understand, so let me help you understand with the help of an example.
How Business Intelligence Works
Now suppose you're the owner of a restaurant. You know that a lot of restaurants have this little customer feedback card they send along with the bill. They ask you questions about how you rate the food, the ambiance, the service and the overall experience. Now this data is fed in a business intelligence software. The business intelligence software will analyze the given data and show you the results.
Now the results would show something like 63% of the people rated the food worth 5 stars, 25% though it was worth 4 star and 12% of the people gave it three stars. While 25% thought the ambiance was worth 3 stars and the rest voted below 3 stars.
What does this tell you? It tells you that while the food your serve is clearly top class according to your clientele, they think that the ambiance and decor of the place could use some work.
Which means that in order to give more value to your customers, you would need to improve the ambiance of the place and make it more aesthetically pleasing so that the customers enjoy it more.
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