6 Ways BI Software Improves Decision Making

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What’s the one thing that connects every business, regardless of size or industry? The need for data—and lots of it. Data consists of facts, figures and statistics that businesses can use to improve operations and increase profitability.

But there’s a catch. They must have the ability to sift through and analyze vast amounts of data for it to be useful.

Enter business intelligence or BI software.

Simply put, BI is technology that enables users to take data from the past and the present, along with third-party and in-house data, and turn it into easy-to-understand information via reports, graphs, charts and dashboards. By using BI, businesses can easily access and analyze vast amounts of information, gaining deep insights into trends, pain points, bottlenecks and opportunities.

Today, we’ll take a brief look at the history of BI and dive into the six ways BI improves decision making.

BI Software and Its History

According to an article on CIO, the term ‘business intelligence’ was first recorded in Cyclopaedia of Commercial and Business Anecdotes, a book authored by Richard Miller Devens in 1865. In the book, Devens highlights how a banker by the name of Sir Henry Furnese collected and analyzed available information to make smart business decisions, giving him a leg up on the competition.

Writes Lago: “The importance of Devens’ use of ‘business intelligence’ lies in the fact that he applied it to describe the use of data and empirical evidence, rather than gut instinct or superstition, to inform business strategy.”

Lago notes that in the 1950s, IBM’s invention of the hard disk was the initial step to entering the digital age. In 1958, IBM computer science researcher Hans Peter Luhn wrote a paper titled “A Business Intelligence System,” which describes using technology to recognize pertinent information based on specific “action points” and providing it to the appropriate user or location.

From the 1960s to the 1980s, major strides in the development and use of computers and databases—including Database Management Systems (DBMS)—were made along with the advent of the first BI vendors (e.g., SAP, Siebel and JD Edwards) and data warehouses. As for the 1990s, Lago writes, “The main development for BI during the 90’s was the proliferation of BI tools. One of the most popular was Enterprise Resource Planning (ERP), which is a management software that integrates applications to manage and automate aspects of a business.”

Lago also highlights BI’s entrance into the “mainstream business arena” in the 90s as well as how the 2000s saw the expansion of the internet and mobile data and the simplification of BI tools for business people, while predictive analysis, cloud technologies, eCommerce and social media opened additional doors for BI use.

In 2023, Lago says that “BI has become a standard tool for every medium or large enterprise” and that “current BI tools work across multiple devices and use visual analytics to apply reasoning data through interactive visual interfaces.”

BI Tools for Improving Decision Making

Understanding how BI software has evolved helps us understand its effectiveness in making smarter, data-driven decisions. Below are six ways BI improves the decision-making process:

1. Aggregate Large Amounts of Data

The task of collecting vast amounts of data from multiple sources was an uphill battle prior to computers and databases. It would take many team members an inordinate amount of time to filter through information they didn’t need to get to the information they did need. Now, comprehensive business management solutions—like ERP systems—connect a business end-to-end, gathering organization-wide data and external information into a centralized database that’s easily accessed by every team member.

2. Utilize Easy-to-Read Graphics

With all your data in one place, BI tools work to analyze specific data sets and present its findings in reports, charts, graphs, dashboards and more. By doing so, complex information is turned into digestible insights about the health of your business, from how efficient your processes are (or are not) to how well you’re serving customers.

3. Make Better, Faster Decisions

Because BI tools provide detailed, at-a-glance information, decision makers (like you!) are able to make timely and informed decisions. The days of sifting through pages of reports and sitting in agonizingly long informational meetings are over. With a click of a button, users can find what they need, when they need it.

4. Take Action Faster

Just as the information gets into the hands of decision makers faster through BI, it also enables them to act on their decisions faster. The real-time access to actionable data cuts the time it takes to go from learning to deciding to acting. As American executive and former Chairman and CEO of General Electric Jack Welch is quoted as saying: “An organization’s ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage.”

5. Continuously Monitor Business Performance

KPIs (or key performance indicators) help businesses measure how well they’re performing against their strategic objectives and their competitors. According to Investopedia, “At the heart of KPIs lie data collection, storage, cleaning, and synthesizing. The information may be financial or nonfinancial and may relate to any department across the company. The goal of KPIs is to communicate results succinctly to allow management to make more informed strategic decisions.”

With BI, businesses have the ability to monitor their KPIs—and thus, their performance—continuously, giving them the knowledge they need to either stay on or to alter their course towards ongoing success.

6. Create a Culture of Information-Sharing

Though BI is often characterized as the domain of business leaders and the IT department, BI tools are for every team member. Having access to the same data allows for strong collaboration between employees who are working to achieve a shared goal, allowing the team to have a holistic view of the organization and to identify pain points and opportunities that otherwise might have been missed.

BI Software For Every Business

Ultimately, BI software is technology that every business should be using in today’s competitive marketplace and digital economy. Information drives knowledge, knowledge enables wise decisions and wise decisions generate business-growing, strategic actions that help businesses succeed.

If you’re ready to harness the power of BI software, contact our experts at NexTec Group. Our national consulting firm specializes in helping businesses find and implement industry-specific technology. We’re passionate about getting the right software into our customers’ hands and developing a strong working relationship throughout the process. We look forward to chatting with you and would be happy to schedule a demonstration.

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