How To Mitigate Risks With Business Intelligence

If someone was to tell you that you could get rid of all the risks that threaten your business, you'd obviously pass out and, when you recovered, you'd jump with joy. It's hardly a surprise. Businesses of all industries are always at risk coming from multiple sources, from market fluctuations to catastrophic events like the Coronavirus pandemic. So, if there was a way to eliminate that, it's evident that everyone would take it.

Unfortunately, there isn't such a magical thing. Risk is something all companies have to live and learn to cope with. That, however, doesn't mean that businesses have to resign to suffer whatever comes their way. That's because they can rely on business intelligence solutions to better understand where they are standing and how they can proceed to minimize those risks.

Through the analysis of historical and current data, Business Intelligence (BI) software can aid with decision making by providing valuable insights that allow you to make more precise estimations and predictions. This is more efficient today than it ever was, thanks to the multiple data sources available that let you gather information about your whole business and its activities to concentrate it on a central platform.

That all sounds nice and all but before you go out to contact a software development outsourcing company (https://www.bairesdev.com/software-development-services/software-outsourcing/) you need to define your BI strategy. Without a sound plan in place, you'll only fail and grow frustrated with the technology. You have to understand that BI applications are just tools and, as it happens with any tool, they are as good as the people using them.

So, how can you make use of BI software to mitigate the inherent risks of your business? Read on to prepare a solid foundation for BI deployment!

Cleaning Out the Data

One of the biggest mistakes business owners make when considering BI tools is believing that you can inject them with any data to get the insights you need. Even with custom-developed BI software, thinking that's insane. If you feed any data to a BI platform without actually structuring a plan, you won't get anything but a complete mess. That's why it is so important to define the strategy – because failing to do so won't shield any results whatsoever.

So, given that you have to start somewhere, you'd better start by understanding that the data you use for your BI tools needs to have some sort of structure. Before getting it into the software, you need to clean it in a process that at first might feel like taming a wild animal. If you think that's an exaggeration, then consider this: you have multiple data sources to carry out analysis, from sale stats to social media posts.

To navigate through those seas of data, you need some sort of compass, otherwise, you'll drown – and the wild animal will eat you alive. That's why all the information you'll need to consider for your analysis needs to live up to a certain set of predetermined standards. By doing that, you'll be giving a certain shape to your data, which will prepare it for modeling, analyzing, and forecasting. In other words, it will clean it enough to be able to produce any value at all.

Those standards are a result of a validation process that you'll have to define and that will be closely related to your goals. Since the process is specific to each business, you'll have to work on your own. And though there aren't exact formulas to come up with it, following these points can help you a lot:

• Define the precise objectives you want to achieve with data analysis.
• Identify the best data for those objectives, locate where you can get it and how you can collect it.
• Keep in mind who will use the analyzed data (whether you're using it for a specific team, for executive management, for a particular individual, etc.).
• Determine the best format for the data's output.

Integrating BI Solutions for Analysis

Working with your trusted BI developers, you can now come up with a tool that can extract the data you need from the sources you've identified in your plan. The gathering process should extract the necessary information while ignoring irrelevant data. After that, the tool needs to structure the data to later store it in a warehouse. If you build custom software for your business intelligence needs, you can tailor-make this process to the point where you can automate all of it.

This will create a workflow that will take the raw data from their sources, transform it into a valuable asset, analyze it, and provide relevant insights for your business. Such insights can come in the form you've defined in your plan, be them visualizations, reports, or any other thing you can think of. You can even use the potential outcomes to feed another digital platform thus triggering another automated process (like adjusting prices, stocking up items, or making changes in the supply chain).

Defining the big picture of this workflow is what makes or breaks your BI approach. If you succeed in cleaning the data, you'll be able to get reports that will provide you with more precise estimations that will feel almost like predictions. The best thing about using BI software (especially advanced solutions or customized applications) is that you can get those insights in real-time, an advantage you can leverage to mitigate emerging or looming risks.

In short, this whole process can give you some interesting answers to questions like "What will happen in the short or mid-term?" and "What can I do to be better prepared for it?" Of course, this is just a part of the BI process. Since the name itself uses it, it's important to remember that you'll also need the "intelligence" part to come out with better results.

AI algorithms can go so far, so you'll need your own expertise and business know-how to truly interpret the insights and make the best decisions. The fact that BI software suggests a certain course of action doesn't mean you necessarily have to apply it since you're the last link of the chain and you can define whether the insights are truly actionable.

All in all, BI software is the perfect ally to mitigate the potential risks of any business but only if you can complement it with your own experience and expertise to bring the most value out of the data analysis.