Using Business Intelligence
Using Business Intelligence is the trend. More and more companies but also private individuals use the numerous possibilities of a systematic analysis of company data to derive opportunities and risks.
But how can Business Intelligence be used and how can it benefit? And what is behind it? There are simple, short and detailed answers to this question.
How can Business Intelligence be used?
Using Business Intelligence means first of all the acquisition and evaluation of information.
According to a common definition, the term “intelligence” means the collection and processing of knowledge. It should be noted in this context that a secret service such as the CIA also has “intelligence” in its name. Business means no more and no less than business, whereby the term “Business Intelligence” originates from the 1990s and has since made a real triumphal march.
The term itself goes back to an essay from 1958 in which the German computer scientist Hans Peter Luhn wrote about the possibility of the targeted use of information to make business decisions. Just one year later, “Using Business Intelligence” was used as a term in the field of analysis, where it is debatable whether the methodology of data acquisition alone or aspects such as knowledge management, customer relationship management or the balanced scorecard are included.
Those who simply like it can say that a wealth of collected information from different areas is used to make investment or business decisions. Using Business Intelligence therefore means not only relying on a “gut feeling”, but also building a clear foundation for assessing the prospects of entrepreneurial success.
Who should use Business Intelligence?
Business Intelligence should be used above all by companies that are professionally involved with investments and want to evaluate their chances of success.
One example is crowd investing: by using Business Intelligence platforms, a clear and transparent evaluation is created and reliable statements can be made about the chances of success of a project. In addition, the basis for the data and information can be named so that potential investors know exactly what is assessed for what reason and how.
Business Intelligence (BI) consists of both reporting and aspects such as data mining, process mining and text mining, as well as benchmarking, predictive and presciptive analytics.
Using Business Intelligence also means anticipating the behaviour and wishes of customers and creating tailor-made products. In the area of crowd investing, promising projects are identified and presented clearly and unambiguously to customers.
Using Big Data and Business Intelligence
In today’s world there is always talk of “Big Data”. This refers to the combination of numerous information sources and the information obtained from them and the skillful combination to obtain added value in terms of information and expressiveness.
While Business Intelligence was reserved in earlier years above all for the professional analysis departments of the enterprises or management consultations and Controllern, BI became long ago the “self service”. A number of tools for both data acquisition and interpretation are freely available and can be evaluated by IT.
It should be noted that IT does not make the decisions, but merely evaluates opportunities and risks and thus suggests a decision. The advantage of using Business Intelligence lies in a method that also recognizes patterns and in this way can not only react but also predict situations.
The latter consists of cause-and-effect scenarios and predictive modeling, i.e. the creation of models from which predictions can be made.
The Limits of Business Intelligence
But what does Business Intelligence mean in practice? Do private investors from now on have to familiarize themselves with complicated tools and master business management methods? And who guarantees the accuracy of the predictions?
All legitimate questions and at least regarding the guarantee must be pointed out that such a question does not exist. Business Intelligence also has its limits and can only act on the basis of probabilities. Unpredictability and unexpected situations can only be captured to a certain extent and poured into a model.
The well-known journalist and stock exchange trader Nassim Nicholas Taleb once coined the term “black swan” for this and spoke of rare and extremely unlikely events whose consequences are extreme and which are often explained simply and understandably afterwards.
Anyone who wants to use Business Intelligence quickly reaches its limits in the face of such phenomena, but this should leave no doubt about the fundamental effectiveness of the methods.
Practical advantages of Business Intelligence
Companies that use Business Intelligence have practical advantages because they can usually better predict successes or failures. These advantages also arise when it comes to crowd investing or crowdfunding. The companies or projects are usually launched with a lot of key data.
The platform on which crowd investing or crowdfunding takes place is now able to use Business Intelligence and provide a reliable forecast of business opportunities. The advantage is obvious, because in this way questionable concepts can be excluded from the outset and even those companies with low chances of success fall through the cracks.
In other words, using Business Intelligence creates a valid basis for crowd investing and potential investors can assume that the prospects of success and thus the prospects of a repayment of the invested capital plus the announced interest are high. However, this requires a high level of know-how, as the company data obtained can be interpreted in different ways.
In crowd investing, however, potential investors can also use business intelligence and gain access to the most important key data and market data themselves. The data sources can be of different nature and can come directly from the company as well as consist of statistics and market analyses. An example are investments in maritime projects or ships. On the one hand, there is information about the specific ship, its year of construction, tonnage, etc., on the other hand. This information comes directly from the shipping company and already gives information about the possibility of a profitable investment.
In addition there are key data on the shipping company or the operators of the ship. Among other things, the question of experience and projects successfully implemented in the past can be relevant. Anyone wishing to use Business Intelligence, however, has to ask further questions, for example about the daily income of a ship, about safety and environmental standards in comparison to the market, about the steel value or also about the current market for ship transports.
Business Intelligence can also be used to include other projects or to listen to experts’ assessments. In this way, an overall picture is created from interrelated information, all of which serves decision-making purposes.
Business Intelligence and the Future
According to many business experts, using Business Intelligence is an extremely promising model for decision making.
Valuable resources are created both within companies and for investors, which also set learning processes in motion.
Data also drives innovation and sources such as virtual reality and much more can be tapped profitably.