What is Business Intelligence? Definition and Reasons Why Your SaaS Needs It
Implementing a Business Intelligence solution can lead to a 127% ROI in only three years. But before implementing a BI solution, you should know what Business Intelligence is about and how it contributes to your SaaS company’s decision-making process. Comprising many important SaaS analytics processes, ranging from data storage to visualization, the concept of business analytics is a vital part of any SaaS strategy. Similarly, business intelligence tools are indispensable for any successful SaaS company.
Keep reading if you want to save time, increase the productivity of your teams, and double your ROI by making the right data-driven decisions.
What is Business Intelligence?
Business Intelligence (BI) is an umbrella term for collecting, storing, and analyzing data to facilitate a business’s growth. These processes include but are not limited to:
- Data Mining and Reporting
Data mining turns raw data into valuable information by uncovering trends and patterns in data. This process requires statistics and machine learning algorithms, especially when dealing with large data sets. Reporting is done to distribute and present information to the right people, such as stakeholders or employees.
- Descriptive and Statistical Analysis
Descriptive analysis is summarizing a data set by drawing insights from past data. The goal of this process is not to make predictions. Instead, it focuses on making data easy to understand by focusing on the visible aspects of the data set (skewness, the shape of the distribution, etc.)
On the other hand, Statistical Analysis is making conclusions about a dataset based on smaller samples from that set. This process is also used to make inferences and predictions based on data.
- KPIs and Benchmarking
By using key performance metrics (KPIs), businesses compare their current performance to their past and compare their achievements with that of their competitors via benchmarking.
- Data Visualization
Data visualization is about presenting data on graphs, charts, tables, etc., to make it more digestible and uncover new insights.
These processes have a common goal: to help businesses make better decisions. It’s essential for all members of your organization, whether part of the sales or IT team, to access the data and reports created with BI. That’s why self-service BI is vital: it corresponds to this need by enabling members without technical backgrounds to access and analyze data.
Data Analytics vs. Business Intelligence: What’s the Difference?
Unfortunately, countless terms are used interchangeably in SaaS, even if they don’t mean the same thing. Data Analytics and Business Intelligence are two such terms. While closely related, these two terms aren’t synonymous.
The main difference between data analytics and business intelligence is that BI focuses on uncovering trends and insights about past data, while data analytics focuses on answering specific questions and making predictions using data.
So, in short, BI takes a bird’s eye’s view of the data and analyzes overall performance, but data analytics takes a narrower focus to solve problems like “Why is the sign-up rate so low, despite increasing traffic?”
Some other differences between BI and data analytics are:
Preparing Data vs Using Prepared Data
Data analytics cleans and converts raw data into structured data so that it can serve the needs of both data and BI analysts. Business Intelligence works with the insights acquired from data analytics, usually stored in dashboards or data warehouses, to make observations and data-driven decisions.
Business Intelligence depends on the processes I’ve mentioned above, such as data mining and visualization, but it’s data analytics’ job to perform these tasks and to provide BI with mined data and ready-to-be-consumed dashboards.
All team members can use business intelligence, from executives to financial directors and sales managers. On the other hand, data analytics usually falls under the domain of data analysts/scientists or programmers, so those with more technical knowledge.
BI uses historical data to analyze what occurred in the past and to update business strategies. It does not make future predictions based on data. It only uses cause and effect relationships to make adjustments. However, Data Analytics does use data to predict future patterns via statistical inference.
Data analytics is an indispensable part of Business Intelligence, but it’s only one of the many processes and strategies that BI uses.
Why Does Your SaaS Company Need Business Intelligence?
Your company stores an immense amount of data. Imagine if all of it was stored as raw numbers on an excel sheet. It would be a nightmare to find the right data, clean it up, put it on the right graph, and relate one data type to another. Thankfully, none of us has to deal with such laborious work when we have Business Intelligence tools that can do the mining, reporting and analysis for us.
Below are some of the ways in which business intelligence tools can help you in SaaS analytics.…
In a growing industry like SaaS, the amount of data generated each day increases rapidly. It would be overwhelming, if not impossible, to try and see trends in said data without the help of charts, graphs, funnels and tables. Without such visualizations, executives or team members cannot find the information they’re looking for–in fact, in a recent study, when business managers used a data visualization tool instead of plain structured data, nearly half of the participants (48%) could find the information they were looking for without needing IT assistance.
Data visualization saves you time by showing you the information you’re looking for. This also helps you see patterns you wouldn’t be able to see from raw numbers, and makes data easy to engage with.
These advantages of visualizations also explain why customer experience maps, marketing and sales funnels are so popular in the industry. Business Intelligence software provides you with these maps and funnels so that you don’t waste time building them from scratch.
Analyzing Internal Data
Internal data indicates your company’s financial standing or different departments’ performance. Integrating internal data and viewing it on an easy-to-understand, customised dashboard is important, as each department’s performance is heavily related to another.
For instance, if your marketing team cannot generate leads, your sales team will bring in less revenue, and if your product team cannot answer customers’ needs, your marketing team won’t be able to find interested users, and so on.
Business Intelligence lets you view marketing, sales and product KPIs together and even in relation to each other. For instance, questions like “what is the revenue generated by each marketing channel?” or “Do the internal links in your blog posts help your sales team by increasing sign-ups?” can be answered via a BI dashboard like the one shown above.
Analyzing Customer Data
External data shows your customers’ behaviors. Customer data is essential for SaaS as it’s the most powerful tool that marketing, sales and service teams have. Your marketing team can create campaigns on channels that bring the most ROI, your sales team can analyze your trial to expansion funnel to see where users drop off before buying, and your service teams can increase user retention by analyzing survey results and customer satisfaction. In short, the patterns, trends, and highs and lows in data help your team increase acquisition, revenue and retention. To sum up, you need a BI tool to visualize and analyze data.
At this point, you should be considering the type of BI tool you want to use: the choices are in-house BI or SaaS BI.
- In-house BI is developed by your IT team. Your BI development team is responsible for integrating all the data from your product, sales and marketing teams’ tools. They should also enable data storage, data mining, report creation, and all other BI processes. These tasks require a project manager, database administrator, data mining specialist, and several other professionals.
- SaaS BI is hosted in the cloud and comes to you ready to be used. Usually, as with most SaaS services, you pay a subscription fee while using dashboards and services. Data mining, synchronization, report creation are all done in the tool, so a SaaS BI tool doesn’t need a data administrator or mining specialist. You simply share your data by integrating your tools to the software; the application does the rest.
Due to these key technical differences, SaaS BI is usually a much more effective solution for Business Intelligence. Your BI strategy should be focused on analyzing the trends and patterns in your data, and technical processes such as data integration and storage maintenance shouldn’t waste your time and resources.
As SaaS BI tools come with pre-made report templates, dashboards with drag-and-drop elements, and customer service, your company doesn’t have to spend time on the technicalities of SaaS BI.
Here’s a list of some of the other advantages and disadvantages of SaaS BI tools.
Pros and Cons of SaaS Business Intelligence
Ease of Use
The problems of in-house BI tools start from their development. While building an in-house solution, you have to do all the installation and maintenance yourself, and there’s little to no help you can get from outside (and if you do, that’s going to have an additional cost.)
One of the best things about SaaS BI is that the tool is premade. Having problems making it work? Ask customer service. Want to integrate your payment processor? No problem, a good SaaS company will have built-in integrations. If they don’t, they’ll add them for you. You only have to add a line of code or press a few buttons to start tracking, storing and analyzing data.
While developing an in-house BI solution, your IT team will still be using additional hardware and servers, such as on-premise data banks. Maintaining and working with all of these software requires technical knowledge, and so, more staff. If you’re using a SaaS BI tool, your business can function without a fully equipped BI team, but an in-house solution requires employees that are available to fix or improve your tool whenever needed.
Your in-house BI tool may be enough for now, but there’s no telling if it’ll meet your business’s needs in the following months. As companies grow and evolve, their analytics needs change as well, and you can’t afford to lose additional time updating your BI tool. These updates for in-house BI require the attention of your IT team, which needs to find the right software or hardware that’ll now meet your analytics needs. This also results in extra spending.
What you can do to save time and money is invest in a SaaS BI tool that evolves with your company. Usually, tools like HockeyStack come with subscription plans that include additional on-demand features. A SaaS BI company can save you time by quickly adding the feature to your tool. It can also save you resources as established tools offer free trials, where you can test to see if the tool will meet your business’ growing needs.
When using a SaaS BI tool, you entrust a third party with your data. If you’re in a security-sensitive industry (such as finance), there are many strict regulations you need to adhere to, and a third party may not be the way to go. But most established SaaS vendors can guarantee security to a large extent. Good SaaS vendors shouldn’t sell or share your data with another party and should be GDPR compliant.
Lack of Customization
In-house solutions are created for your company and your company only. Naturally, they’re as customized as a business intelligence tool gets. SaaS BI tools may not be as customisable as in-house solutions. Cheaper SaaS BI plans usually include fewer features and functionality and are not tailored to your needs.
However, a fully customized in-house tool also comes with a price tag much more expensive than a flexible SaaS BI tool.
Businesses may not always be transparent about their products’ pricing. Brands might request payment for access to certain features or even customer service. However, you can ensure this isn’t the case with the vendor by going over your subscription plan before purchasing.
What to Look for When Selecting a Tool for SaaS Business Intelligence
There are plenty of reasons to start using BI and many tools to choose from. You shouldn’t settle on a tool without considering all of the aspects below.
Ease of Use
One of the advantages of SaaS BI tools is that they provide sales, marketing and product teams access to important data and visuals. An effective BI tool should have an understandable UI so that non-technical users navigate through it easily. A helpful onboarding program, and thorough documentation are also musts for this criteria.
Also, a suitable SaaS BI tool should be easy to integrate into your business. You shouldn’t need external help from a developer just to integrate the tool into your business and to make it work with the other platforms you use. No-code solutions like HockeyStack are great in terms of usability since you can set them up in less than five minutes. Also, as they offer a wide range of built-in integrations, you won’t spend time trying to connect all your data sources to your new tool.
You want your SaaS BI tool to have interactive, feature-rich dashboards, but these capabilities shouldn’t slow your BI tool down. The dashboards and visuals should look clean and understandable on any device and browser. SaaS BI tools should also give you access to a wide range of formatting options, show trends and patterns in data, unify data sources and cleanly present them.
Certain tools, such as Microsoft’s Power BI, have affordable prices but lack some of these key features. Thus, it’s important to consider all alternatives before deciding on a tool.
While deciding on a SaaS solution, you should choose the one with the most customization capabilities. This is crucial since your business will have trends and data that it’ll want to track, and a SaaS solution may not have all the possible dashboards ready to be used. However, it should give you the ability to create those dashboards. Tools like HockeyStack let you and your teams design any dashboard they want in a matter of minutes.
The hype around business intelligence and data analytics aren’t groundless. Companies that prioritize data-driven decisions are 77% more likely to become successful. They’re also up to 59% more likely to find actionable insights from data. Business Intelligence helps you make these data-driven decisions by storing, unifying and presenting your internal and external data. So, if you want your business decisions to impact your revenue, retention and acquisition, use the information above to find the right BI tool and start analyzing today.
Put simply, data analytics is the process of examining data to uncover trends and to use those trends as information.
Business Intelligence tools are software that collect, store and process unstructured data from various sources and present them in structured form.