In my opinion, the essence of Business Intelligence (BI) is not the what but the why. You have heard that before, so it will annoy you to hear such a cliché, especially concerning as serious a matter as BI.
Bear with me, please.
Of course, BI is different for different businesses depending on the level of maturity, the market share and the revenue. Mature, well established businesses probably need BI for the complex purpose of keeping the customers they already have and where plausible, for attracting new customers. It is called Improved Sales.
New businesses need BI for the sole purpose of establishing a presence in a new, probably unknown, and probably occupied market. What we now call BI has existed in many formats from as long as time is ancient. Market Research for instance:
- What do you want to sell? What needs selling?
- Is there a Buyer? Is there a need? Why do you think there is a need?
- Does what you want to sell already exist? If yes, how much of it exists? Why do you want to sell it anyway? If no, why isn’t any other clever bugger selling it?
- Location? Have you found a perfect location? Why is it perfect?
- How about the competition? What do you plan to do differently? Why do you want to do anything different?
You see the whys? It is a step by step progression from what to why of course, but the most actionable knowledge comes when you have the answer to the question Why.
Here is a breakdown of my theory: Say you ask for a report of the potential customers in the vicinity of your new business venture. Say that after a lot of research and consideration, you decide that your new business venture should be Selling Beautiful Handmade Wallets. You will be designing the best wallets at home and and retailing them in a small Online store in a back alley behind the online garage in the city called Online Nowhere.
- Number of potential customers = 1,4 customers
- Promising Buyers = Married Women
- Expected Revenue = 10,2
- Currency = SEK
You even get an example customer:
- Customer Number = SE4321 (Swedish Customer)
- Customer Name = Lim Pan
- Customer Payment method = Credit Card
- Customer Address = 43 Trinity Stockholm
- Customer Gender = Female
- Customer Age = 37.5
- Customer First Order = 12th June 2014
- Customer Most Recent Order = 12th June 2017
- Customer Average Order Amount = 557
- Customer Currency = SEK
- Customer Marital Status = Married
- Customer Family = Two Children
Imagine you get the above simplified report including the detailed information on a specific customer, what catches your attention? Is it the average amount, the date of birth, the gender or the payment method? The more urgent question is, Why do you want to know anything at all about a specific customer? Is it for marketing, is it for Service improvement or is it for analysis of customer behavior?
What is Service improvement for you?
I would like to suggest that the best way to utilize BI in this case is to find out:
- Why you entrust your life to a wallet?
- Why would anyone want your beautiful wallets?
Don’t get insulted, they are beautiful wallets! But, there are multitudes of ugly wallets that do the job! So, is it that your beautiful wallets function better than the ugly ones? Is it possible that your beautiful wallets are cheaper or pricier than the ugly ones? Why is that good? Is it good for you or for the intended customer?
Data says that the potential customer pays with a credit card. Why Credit Card?
Could the potential customer be persuaded to pay by other means?
Why is the potential wallet buyer a woman? Do women use wallets?
Data says, there are 1,4 potential customers in Nowhere. Why 1,4?
How many people live in Nowhere? Why don’t the space occupants need wallets?
Why the best wallets in the world? Why not cats and dogs? Why not hair pins?
Why retail? Why a small Online store in a back alley behind the online garage in the city called Online Nowhere? Why not a big wholesale beside Best Priced Wallets Online?
If you cannot gather enough data or enough gossip to answer most of these questions, and more, you can kindly be accused of gambling.
With BI, you do not always have to have a huge complex databases, the latest BI tool, or a team of BI experts running around their tails recreating age old KPIs to send out age old reports.
BI is a way of life.
It is the self preserving choice to not jump on any train without asking where it is going.
The cool-headed decision to not spend a dime without checking how many dimes you have left.
The safety precaution of not walking a dark alley alone.
The SMART goal that needs a background, a baseline, an investment, a commitment and a future.