What is Business Intelligence (BI)? How can business intelligence provide a competitive advantage?
|✓ Paper Type: Free Assignment||✓ Study Level: University / Undergraduate|
|✓ Wordcount: 351 words||✓ Published: 22nd Jun 2020|
QuestionWhat is Business Intelligence (BI)? How can business intelligence provide a competitive advantage?
AnswerBusiness Intelligence is the term given to the gathering and analysis of information by a business. This is usually information external to a business, such as customers, markets or competitors – but it can also apply to internal information. With advances in computer technology allowing faster processing and data storage for lower costs business intelligence has been a growing function within modern organisations. Data can be gathered in huge volumes using a variety of technological methods, such as point-of-sale records, online account/behaviour records or data mining from social media. The huge volume of data available through these methods has led to the term ‘big data’ being used. Proponents claim that big data can provide a revolution in how businesses interact with customers and markets. Big data, used well, can lead to insights that allow organisations to predict demand more accurately and also to offer more personalised services and promotions to customers. A prime example of the use of BI and big data is one of the earliest users of these approaches – Tesco. The Tesco Clubcard allowed the retailer to gather information on customer purchase habits so they could track and predict demand at individual and aggregate levels. This allowed them to make better decision in stocking products and changing product ranges to match seasonal demand, they could also offer personalised promotional offers based on products customers frequently bought. Tesco have built upon this in their online retail offering, where they can track consumer behaviour and purchasing and recommend items based on predicted individual tastes. This approach is used by many online retailers. Being able to predict demand more accurately offers competitive advantage through providing a better service and avoiding wastage on unwanted stock. It also allows customers to be stratified based on consumption patterns and better promotional offers created.
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