Today, thanks to the advancement of technology, you accumulate a lot of data, whether it is about your customers, your products, your employees, your online activities, your sales, etc. In fact, you’ve never had access to so much information. You should be happy about this, but in reality you don’t know how to handle this astronomical amount of data and therefore you can’t use it to understand what’s going on in your business and make informed business decisions.
Fortunately, there is business intelligence that allows you to collect data from your various information systems, consolidate them into a single report, easy to understand and analyze. This report, commonly referred to as a dashboard, serves as a guide for your business. It is able to quickly point out threats and short-term opportunities and you can rely on it to make informed decisions.
What is the difference between business intelligence and business modeling?
Business intelligence takes the form of a dashboard that gives you insight into how your business is performing today. So when things don’t go as planned, you are immediately notified and this allows you to react accordingly before it is too late.
The business model does not give you a picture of the current state of your business but rather its future state. You need business modeling when you need to project the results of various scenarios into the future and measure their impact on your business results. This allows you to choose the best possible scenarios now for you to achieve the best possible results later.
What is most important to my business?
Both of these activities are equally important. They are in fact both essential to any manager. To illustrate my point, imagine the following. You are on the edge of a forest. In front of you stand 4 paths. Your objective is to use the path that will lead you to the exit as quickly as possible. In order to be able to choose the right path, you analyze the characteristics of each. At first you might be tempted to say that the shorter path will get you to the exit the quicker, but after some thought you will notice that some paths are more difficult to take, that they are more or less steep, that they are whether or not crossed by a river, etc. Here you will need business modelingto integrate all your variables into a model and find out which path will get you home the fastest. You will also get an approximation of the time it will take you to travel this path. You will then phone your spouse to inform them of your arrival time. You will also mention to him that you will call again along the way to let him know how you are doing. You will need business intelligence to measure this progress. If you had planned to be at the river for 5 p.m. and at 5 p.m., you are still not there, it is business intelligence that will inform you and remind you to call your spouse to tell him your late and tell him how long you should be late.
Of course, this allegory does not apply to the realm of business itself, but it seems that a picture is worth 1000 words …