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What is Business Intelligence and why it matters?

Arjun Gupta, Regional Business Intelligence Lead
May 24, 2021
In 2017, The Economist published an article titled ‘The world’s most valuable resource is no longer oil, but data’, and just like oil, data has to be refined before it can be of value. With the stockpile of data available and the rapid advances in data science and computing power, companies are turning these vast amounts of data into valuable insights.
Business Intelligence (BI) is the process of transforming data points into actionable insights that can help organizations make strategic business decisions. It helps leaders have a comprehensive view of the organization, thereby enabling them to eliminate inefficiencies and drive quick positive changes. In simple terms, BI is quantifying solutions to complex problems and then making informed decisions, rather than trusting a gut feeling or vague impressions.
BI has become an indispensable asset to organizations. A thorough analysis of an organisation’s internal data offers comprehensive information on what has been done right, what needs adjusting, how to prepare for the future and prevent any issues before they occur. The BI systems help identify important trends that can be used to modify and implement strategic plans and to understand interconnections between different facets of the business. This not only helps understand consumer behaviour (buying patterns, etc.) but also improves the visibility of the entire business thereby making resource allocation more effective.
How are startups leveraging BI to make decisions?
Gone are the days when BI was a privilege only for larger organizations since it required elaborate data collection centres, a team of IT specialists and data scientists. However, with the rise of self-service BI tools, harnessing the power of data has become easier, accessible and does not necessarily have to involve a data wizard.
As BI tools evolve and get smarter, companies are utilizing their data in more efficient and effective ways. Startups now, even in their early years of operation, harness the power of BI by creating a ‘culture of data’. This not only removes bottlenecks in company-wide workflows but also reduces the grunt work of manually configuring data. Manual intervention is not uncommon, but it is not sustainable as startups continue to grow. Early intervention plays a very important role for startups in this regard.
Here are some ways startups are leveraging BI:
• Making data-driven actionable insights available to anyone in the company and remaining transparent
• Identifying market trends and gaps in the business
• Understanding customers better by identifying their buying pattern, purchase behaviour, etc.
• Modifying marketing/sales strategies using the historical data
• Building dynamic, interactive dashboards which help leaders make smarter, positive, impactful and faster decisions
• Improving operational efficiency by automating repetitive tasks
Startups now realize how investing in BI at an early stage provides a competitive edge by providing a comprehensive view of their business and how to grow sustainably.
How Zilingo leverages Business Intelligence?
The BI team in Zilingo owns the Management Information System (MIS) Reporting which is used by the management to assess the performance of the organization enabling better and faster decision-making. The BI team is also responsible for delivering actionable insights to the management by providing a performance scorecard on the different businesses operating across various geographies.
Below are a couple of use cases on how BI is leveraged in Zilingo:
1. Presenting actionable insights to the C-Suite and the Country Heads
One of the primary responsibilities of the BI team at Zilingo is to provide C-suite and the Country Heads with snapshots on a monthly or weekly basis showcasing trend lines for different operational metrics and their impact. Commonly known as descriptive analytics, it is when you examine and analyze historical data to identify patterns and generate insightful reports.
Below is a stepwise diagram of how the data flow happens. The data is processed before it gets analyzed and finally reported in the form of actionable insights.
2. MIS Reporting and aligning multiple stakeholders
The BI team is also responsible for MIS Reporting which includes historical data as well as projected numbers (revenue, costs, margins, EBITDA, etc) of all the departments and business lines across various geographies that Zilingo operates in. The collection of this data and ensuring its sanctity requires coordinating with multiple cross-functional heads and aligning on the final numbers. These are then presented not only to the management of the company but external stakeholders (including auditors) as well.
This company-wide data is used to perform a variety of analysis, some of which are listed below:
Cohort Analysis for Retention: It helps understand the percentage of customers that are retained along with their retention pattern month-on-month (MoM) or quarter-on-quarter (QoQ). This analysis helps understand the reasons for low or high retention in a particular month or quarter.
The above table represents the retention of buyers QoQ. How to read the cohort: For example, if the total number of buyers who transacted for the first time from April ’20 to June ‘20 was 100, of this e1% transacted again in the next quarter, e2% (of 100) transacted in the subsequent quarter and e3% (of 100) transacted in the quarter after.
Concentration Analysis: This will help understand what percentage of our customers contribute to how much of the business. Through this, we can also analyse the trend line for this group exclusively. By identifying the top customers that contribute to the business, (the Pareto Principle, or 80/20 rule: 80% of the business from the top 20% of the customers) we can devise ways to add value for them and ensure retention.
The above chart shows the concentration percentage of buyers month-wise from Jan ’21 to Mar ’21. This shows how the concentration of the business changed from Jan’21 to Mar’21 with y1% of the buyers contributing to 80% of the topline in Jan ’21 to y3% of the buyers contributing to 80% of the topline in Mar ’21
Trend analysis of various metrics such as margins, number of transactions, number of customers, etc.
The trendline shows the #buyers MoM from Oct’20 till Mar’21. It can be noticed from the chart how this number dipped in Jan’21. After analyzing the data, the next step would be to identify the potential reasons for the reduction in the number (maybe because of a marketing campaign that didn’t work as expected) which can then further be worked upon.
Business intelligence can support companies in their decision-making process by showing present and historical data within their business context. BI also provides performance and competitor benchmarks that help organizations run smoothly and efficiently and spot market trends thereby increasing sales and revenue. With the accelerated adoption of BI and analytics by companies, it will not be long before every process and functioning will be backed by data giving us more relevant insights and recommendations.
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