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What Is Business Intelligence and Why Do You Need It?

What Is Business Intelligence and Why Do You Need It?

What is business intelligence?

Business intelligence is the process of collecting, analyzing, and interpreting data to make informed business decisions.

Jordan is trying to figure out how to improve his company’s success. He knows he can earn more customers and drive more revenue, he just isn’t certain how. If only, he thinks, there was a way for me to see exactly where and how I can improve my business processes.

Luckily for Jordan, there is. It’s called business intelligence (BI), and it’s something your company can benefit from using. Both you and Jordan can use BI to see what you can do to improve your company.

But what is business intelligence? Furthermore, why do you need it? Keep reading to get answers to both of those questions. Then subscribe to our email newsletter, Revenue Weekly, to receive more insights into the world of digital marketing!

What is business intelligence (BI)?

Business intelligence is hard to define because it doesn’t refer to a specific thing. Rather, it encompasses a broad range of platforms and practices.

The basic idea, though, is that a BI strategy helps you gather and analyze data about your business, which you can then turn into specific actions that improve your company.

Business intelligence goes beyond standard data research or analytics. It’s not purely about collecting information, nor is it purely about analyzing data. It’s about doing both of those tasks and using what you learn from them to come up with new business practices that boost your efficiency and revenue.

There are different subsets of business intelligence, such as revenue intelligence. However, they all work together to help drive success for your business.

How does a BI strategy work?

To get a picture of how BI works, let’s look at a hypothetical example.

Let’s say you invest some time into gathering data about your email marketing. You analyze that data and determine that your campaigns could benefit from more personalized emails.

But you don’t stop there — you take those insights and develop a plan for boosting your personalization. Consequently, you see your conversions go up.

That’s a small-scale version of a BI strategy in action.

Types of BI analytics

When you conduct analytics for your BI strategy, there are a few different approaches you might take. To be more specific, there are four main types of BI analytics. Here’s a quick overview of each one!

Descriptive analytics

Descriptive analytics is the most basic type of BI analytics. This approach involves looking at your data to see what’s happening with your business. It’s not about figuring out why things are happening or what you can do about them — it’s an observation of what’s currently going on.

Diagnostic analytics

Diagnostic analytics takes descriptive analytics a step further. It involves determining not only what is going on with your data, but also why it’s happening. So, you might see that you’re earning more leads in the last two months, but why? What changes did you make that caused that?

Answering these questions can help you figure out how to replicate your successes (or avoid repeating your failures) down the road.

Predictive analytics

Predictive analytics is about using your data to figure out what will happen down the road. For instance, maybe you notice a particular trend with your sales, and you use that pattern to predict what future sales will look like. This option is a great way to help you plan ahead.

Prescriptive analytics

Finally, prescriptive analytics is the highest level of analytics. It focuses on using your data to figure out what you should do going forward.

Maybe your descriptive analytics show that your paid advertising has been generating fewer clicks lately, and your predictive analytics determine that the number of clicks will keep going down in the coming months. The job of prescriptive analytics is to then ask, “Okay, so what do we do about it?”

This option is arguably the most crucial type of BI analytics, since without it, the other types aren’t as helpful.

How to build a BI strategy

Creating your business intelligence strategy is a process. It takes time and effort to develop a strategy that works for you, which is why we’ve included a few guidelines for starting. Here are the three primary steps you should follow when generating your BI strategy:

1. Set your goals

The first step of developing a BI strategy is to set some initial goals. What are you looking to learn from your analytics? What do you want to do with the knowledge you acquire?

By setting these goals before you do anything else, you have a clear picture of where you’re going with your strategy. Make sure you keep these goals fresh in your mind throughout the following steps and stick by them.

2. Find a BI platform

The next step is to find a business intelligence tool you can use to organize all your BI analytics data. BI platforms are essentially large-scale analytics tools, so they enable you to store all your data and uncover actionable insights from it.

There are many different BI platforms you can choose from, including::

You’ll want to have these platforms ready to go before you dive into the rest of the process.

You can also go out and find niche tools to help with specific areas of the research and analytics process. For instance, if you’re looking at your Google rankings, you might want to use a platform like Ahrefs in addition to your BI platform.

3. Analyze and respond

The third and final large-scale step in the BI process is to analyze your data for actionable insights. Keeping in mind the goals you set at the beginning, look for data that can help you address the issues you want to focus on.

Once you find the answers you need, start drawing up a plan based on those answers. Maybe you find that you’re not doing as well as you’d like on a particular campaign, and you want to draw up a plan to fix that. Or maybe you’re doing something well, and you want to implement those tactics in other campaigns.

Whatever the case, be sure to use the insights you gain to improve your business practices!

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Get help optimizing your BI strategy with WebFX

Your BI analytics is vital to driving up your revenue, but it can’t do all the work for you. You still need to take what you learn from your analytics and apply it. Fortunately, you don’t have to do that alone. 

You can partner with WebFX, the agency with over 25 years of digital marketing experience!

With our digital marketing services, you can get help optimizing any number of campaigns, from paid advertising to search engine optimization (SEO). We’ll let you call all the shots, but we’ll handle all the work for you.

To get started with us, just call 888-601-5359 or contact us online today!

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