One of two things is always true: either you’re in a recession, or you’re preparing for one. When a recession or unexpected economic downturn arrives, the properly prepared business can not only survive–it can thrive.
While no business is completely recession-proof, properly prepared businesses gather and use data when things are booming, or when times get rough. Recognized as an entire movement, business intelligence (BI) allows business leaders to streamline when necessary and make data-based decisions about when to take risks.
What Is Business Intelligence?
Finding, labeling, downloading, and analyzing data, with the use of BI software makes up the art and science of business intelligence. Business analysts and other experts can gather small and large data sets to help business leaders make decisions. Think about the term “business intelligence” as having an unspoken “artificial” in there; it’s AI to help you forecast and survive tough business times via data collection.
For example, a small business selling just a few products may want to know what they should develop next. At its most basic level, business analysis will reveal what products are most profitable and how many marketing touches it takes before a user commits. BI can provide marketing return on investment (ROI) information and reveal the wants and needs of the customer.
On a larger scale, companies like Amazon can use business data to make predictions about future buying events. Because they have decades of data about past holiday buying trends, they know when to recommend Christmas lights or stand-up trees to buyers to make the best odds of a purchase. With all the data Amazon has from the beginning of the pandemic, they’re now more prepared to adjust shipping estimates (and possibly even carriers, when needed). They’ll know to procure products like toilet paper when consumer panic sets in. And overall, their customers will be happy about it, and will gladly spend money on necessities.
Tight, profitable logistics are built on fantastic BI.
While the pandemic showed us a different type of recession than our economy typically faces, giants like Walmart and Amazon have data on multiple recessions: what customers need, what they cut back on, and why.
What Business Intelligence Reveals
Through the use of technology, business analysts can collect data from a business and provide information about what works and what doesn’t. Specifically, BI can inform analysts about:
- Sales data: What products or services sell the most volume, consume the most overhead, and/or generate the most profit.
- Company growth and hiring trends: Will the business need a new in-person location? More data servers? What about more staff? By projecting the rate and areas of growth, an analyst can inform answers to these questions.
- Key Performance Indicator (KPI) tracking: With the right BI software, a skillful analyst can track all KPIs – and even let you know which KPIs you may be missing, and which aren’t as important anymore.
- Unique Selling Proposition (USP) opportunities: Your company may be doing something well while other companies simply can’t or won’t excel in that area. If that helps your business stand out, your marketers can adjust their campaigns to describe the benefits of your USP during the sales process, at all points in the marketing funnel.
Business analysis happens in four stages:
- Preparing data (collecting data, sorting it for analysis, modeling data)
- Providing a query to the isolated data
- Delivering KPIs to the decision-makers and stakeholders
- Assisting the decision-making process through dashboard-level results
Analyze How Market Turbulence Historically Affects Your Company
As with our Amazon example, a business of any size can analyze how past market turbulence has affected their company if they have the data available. If your business is new and hasn’t weathered multiple recessions, the right BI software can still help you make predictions based upon data and feedback from other companies.
The more data and insight you have, the better. Whether you’re selling business to business (B2B) or business to consumer (B2C) products and services, your buyers will change buying patterns when a recession strikes. Additionally, more of those customers will be initiating layoffs, or find themselves the recipient of a pink slip.
Provide Analytic Projections for Your Business
The most effective BI will reveal which areas of your business are sure to survive a recession, and which you may have to jettison or otherwise sink money into during an economic downturn. While it’s always ideal to use BI like a crystal ball to predict the future of business, it can also help you be decisive during a crisis, saving thousands or even millions of dollars.
Consider a business like Uber, which uses real-time data to route drivers. In this case, Uber needs to know what causes a short-term influx or decrease in passengers and food orders, such as inclement weather, holidays, or how many flights are due to arrive at an airport that day. Long term, Uber uses BI software to make smart decisions about overall price increases; it may also adjust its price based on what competitors are doing.
If you’re holding financial forecasting meetings quarterly, think again: BI software predicts change at the speed of now. Keep some time open for recession indications in the news—and as revealed by your BI.
Automate Technology and Retain Your Expert Human Workforce
While business analysis isn’t new, business intelligence reflects a level of analysis not possible without BI software. BI software can handle more data and expose patterns that humans might miss.
In a recession, it’s important to note which departments still perform well and which might cost the company money. It’s unfortunate, but to survive a recession, businesses need to streamline at the start of one. Using the data from BI software, you can analyze underperforming departments and automate workflow when possible.
During a recession, your business typically focuses on core products and fundamental values. Business intelligence helps you use data to see what’s keeping your operation alive. And instead of cutting underperforming workers or departments when they’ll have a hard time finding employment, you can give them the news before a recession strikes.
For best results, you should use BI software to continuously collect business data and observe trends and changes, some of which may be unique to your business. Make data-based decisions rather than emotional ones, allowing the technology to guide you.
Work with the Business Intelligence Experts at MIBAR
There’s no catch, a solution like Power BI is that good. Whether you have a small company, or a larger company, Power BI is a product that is as powerful as the imagination. If that data exists somewhere in your database it can be tweezed out and sliced into a vast variety of reports and visualizations that can help to grow, and possibly even help to save a business during a recession.
Learn the costs of NOT using business intelligence.
Get to know more by reading our free guide, 5 Key Considerations When Implementing a Modern BI and schedule a free consultation with a BI expert today!