How can BI (Business Analytics) and AI (Artificial Intelligence) enhance business efficiency even further?
The Apollo Group comprises over 50 distinct organizations, ranging from bookstores, clustered cinemas, and entertainment centers to juice and ice cream bars and restaurants. Apollo’s management sought a way to gauge their business performance, so Intelex Insight developed an automated BI solution for them to monitor financial data for both the group as a whole and for individual businesses. With this new solution, managers can now monitor reports daily and receive early warnings for crucial efficiency indicators within the company.
Why are we discussing this on our blog? As a result of our strategic partnership, our long-term partner Intelex Insight has become the Trinidad Wiseman Center for Machine Learning and Business Analytics.
This means we can now offer our customers new services that combine the best features of data science and service design. By assisting clients in implementing organizational change, we can now measure their performance in real time. In this blog post, we introduce new services based on data science and provide real-life examples of how they can be used to enhance business efficiency.
What is BI or business analytics, and why is it beneficial for businesses?
Quick answers to your business questions
At TWN, we develop various data entry-related systems for our customers daily (e.g., online stores and e-businesses, information management and work environments, and self-service environments). It is often necessary to prepare and analyze reports based on the data collected by the system to answer various business questions.
Various system providers have also created standard reports for their users, i.e., consolidated reports of elements within a specific system (e.g., Pipedrive has a sales results report, while Smartsheet has a role-based employment report). However, these are often insufficient for analyzing a particular business, and this is where a customized BI (Business Intelligence) solution comes to the rescue.
Intelex Insight, our new machine learning and business analytics center, uses the Microsoft-based Power BI tool for this purpose. We will discuss how BI solution creation works in more detail later.
The main industries using Intelex Insight BI solutions and their most typical indicators include:
- Financial — income statement, balance sheet, budgeting, and financial KPIs (performance indicators)
- Sales — daily detailed revenue, profit reporting, budgeting, KPIs
- Production and logistics — daily detailed reporting, bottlenecks, KPIs
- Sustainability (ESG) and other compliance and national reporting.
Coop Põlva — BI solution for managing sales dynamics
Coop sells various product groups — from car accessories, clothing, and footwear to chemical goods and numerous food categories. Each store belonging to the Coop chain operates and monitors its sales independently. So far, Põlva Coop has not obtained all the key indicators important for analysis from monthly reporting. Intelex Insight developed two BI solutions for Coop — RoiBot Finance and RoiBot Sales. RoiBot Sales quickly and conveniently provides a daily structured report for evaluating sales of different product groups in one store and across the entire retail chain. RoiBot Finance offers an overview of the company’s essential financial indicators.
The project was completed about a month before the coronavirus crisis, making it interesting to observe changes in the sales of various product groups. For instance, toilet paper sales increased by approximately 500% compared to the same period last year. The new BI solutions help Põlva Coop manage its sales dynamics quickly and effectively and respond immediately to orders.
Each solution is tailored to a specific purpose
Just like a glove does not fit both hands, various IT solutions are designed for distinct purposes. Although it is possible to force the glove of your right hand onto the left, it would not be comfortable. Similarly, each IT system allows you to extract specific data reports; for example, work hours can be obtained from Jira and expense reports from an accounting program. Data from one system is often insufficient for making business decisions, necessitating the comparison of both working hours and costs.
It is also possible to interface systems to collect data from different sources. However, it is important to recognize that; as a result, your base systems no longer serve their intended purpose but become reporting and analysis systems, which they were not designed for. Developing the reporting capability of a system can be significantly more expensive and less functional than using software designed specifically for this purpose.
Let’s take the example of a pocket knife. It’s small, easy, and convenient to carry in your pocket for emergencies. However, if you add tweezers, tongs, corkscrews, and other items to the knife, it becomes so big that it no longer fits in your pocket. In this case, it can no longer fulfil its main function (see picture 1: pocket knife).
Picture 1: pocket knife
A more reliable, convenient, and faster solution is a Business Intelligence (BI) solution, explicitly designed for gathering data from different systems, unifying them, analyzing, and reporting.
Unlike systems related to specific data, where there are typically restrictions on the data format, BI tools can handle various formats — APIs, Excel, JSON, XML, CSV, database views, and more. A BI tool can consolidate data from different datasets in different formats and present them in a uniform, desired form.
How are BI solutions created at Intelex?
Intelex Insight specialists create BI solutions in the Microsoft environment. Intelex has also developed RoiBot, a ready-made BI solution that enables monitoring and analysis of key performance indicators (KPIs) such as turnover, profit, cost of goods, and company liquidity. The advantage of a ready-made solution is the ability to obtain a working BI solution in less than a month.
The prerequisite for using a BI solution is digital data in any form, such as files (Excel), databases (Access, SQL), complex systems (CRM, ERP), or collaboration solutions (SharePoint, O365).
Picture 2: BI solution architecture
The process of creating a solution involves consolidating customer data in a data warehouse, where it is stored in a structure convenient for analysis.
The data is then transferred to the data model, where it is associated with each other. For example, dates in different formats and variations of the same customer name must be unified for convenient analysis. The data model facilitates this process.
Finally, visually appealing and easily consumed reports are created for the end user using tools such as Power BI or Excel.
BI solutions are flexible
Power BI reports allow you to analyze both the organization’s current situation and past events. The drill-down functionality can provide the necessary details to understand the reasons for issues like a low-quality product batch. When displaying data in the final report, indicators can be easily added or removed, and different chart views can be employed.
A distinguishing feature of Microsoft’s BI models is the ability to write data back into the model through Excel. This option is utilized in budgeting, making it more dynamic, convenient, and better monitored than traditional budgeting in Excel files or ERP solutions.
ERR (Estonian National Broadcasting) uses a BI solution for budgeting and reporting
ERR (Estonian National Broadcasting) primarily receives funding from the state budget, making it crucial that all programs comply with the budget. Intelex developed a budgeting reporting solution for ERR, enabling quick and convenient monitoring of expenses and remaining budget across departments, such as economy, culture, and sports.
Excel is good, but automation is better
Excel can handle everything that a classic BI solution does. However, depending on the size of the organization and the volume of data, additional analysts may be required to manually perform tasks that a BI solution automates, such as copying numbers, converting to a uniform format, and creating reports.
In larger companies with more data, a BI solution saves working hours and allows employees to focus on core tasks rather than data processing.
What is AI, or artificial intelligence, and why is it beneficial for businesses?
Rimi operates approximately 500 stores in the Baltics, with each store consistently receiving customer feedback and complaints. Rimi Baltic receives around 50,000 customer letters annually, which can be read individually, but that is quite time-consuming. Intelex Insight developed an AI solution for Rimi that categorizes customer complaints by area and content. This new AI solution saves time and resources, identifying product categories and stores likely to have quality issues that need addressing.
Progressing to the next step — forecasting the future based on data — makes sense when an organization understands its data, trusts the data, uses it daily for reporting, and has developed needs that traditional BI can no longer effectively support.
An AI or machine learning solution analyzes past data on behalf of the user, identifying patterns useful in resolving current issues. Generally, an AI solution can be implemented in an organization that already uses a traditional BI solution.
For instance, an AI tool for a manufacturing company can predict potential equipment failure in the future by recognizing patterns in equipment operation before failure. This allows for operational adjustments to production schedules, preventing unexpected supply gaps caused by equipment failure.
BI vs AI: 1. The BI solution provides sales number reports, while the AI solution assists with sales forecasting. 2. The BI solution offers an overview of production line downtimes, while the AI solution aids in preventing downtimes. 3. The BI solution delivers a summary of customer feedback volume, while the AI solution organizes the feedback by content.
An AI solution should be considered when an organization desires to learn something new with substantial financial value. Undoubtedly, no company would refuse next month’s sales knowledge. However, if it costs around 10,000 euros, one must ponder if the knowledge is valuable enough to warrant such an expense.
How does the “magic” of an AI solution occur?
Customers seek the end result — the magic, prediction, or recommendation provided by an AI solution. Examining the AI project reveals its components. As previously mentioned, an effective AI solution is built on a solid BI foundation.
If an organization lacks a BI solution, 50% of the time is devoted to creating a traditional BI solution, including data collection, preparation, and categorization. The remaining 50% of the time is spent developing and testing the machine learning model, ensuring its accuracy.
Kaubamaja — Market Basket Analysis Solution
While shopping at a department store or another online store, you may have noticed that the system recommends additional items from the same store in the shopping cart view. This is a traditional AI solution designed to boost online sales. For example, when purchasing a suit of a specific brand from Kaubamaja, the system suggests shoes from the same brand, previously purchased by other customers in your age group who bought an identical or similar suit. Experience shows that this recommendation solution works well for people grouped based on similar buying behavior, with a relatively high probability of such customers buying shoes. According to Intelex Insight’s experience, this AI solution allows companies to see immediate income, and marketing campaigns are more effective, increasing sales a few percentage points higher than traditional campaigns.