How Business Intelligence Tools Can Be Used to Mitigate Risks in Business
Within the world of business, risk can come in many forms. Whether you’re focusing on predicting the risk around a certain potential decision or simply focusing on risk created by misuse of company digital assets, this factor can arise absolutely anywhere. Part of sustainable business growth is about mitigating risk where possible or reducing its extremity.
One of the leading methods of alleviating many forms of risk that have appeared and become favored over the last decade is the use of business intelligence. Business intelligence is the use of data to analyze, predict, and inform those in business about the very best practices that their company could take.
When it comes to reducing risk, there is a range of ways that business intelligence tools have revolutionized this field:
- Cybersecurity Compliance Training
- Market and Competitor Assessments
- Reducing Uncertainties
In this article, we’ll cover these factors, explaining exactly how modern business intelligence practices can be used to mitigate risk.
Also read: How to Choose the Best Business Intelligence Tools
What’s the difference between business intelligence and business analytics?
Though these two fields are commonly mixed up, they actually slightly different in terms of which data they actively deal with. Business analytics is all about predictive planning, using past and current data, and then extrapolating it into the future. With this usage, businesses can more effectively plan for the future.
On the other hand, business intelligence is all about the current moment, using data to understand how a company is working at that very moment. While analytics tools will focus on mathematical and statistical functions, intelligence tools will focus on dashboards, reporting, and data visualization.
While business analytics is an important factor to consider when mitigating risk, it is more so involved with removing the risk associated with particular decisions. Instead of making a blind decision, data analysts can use predictive planning to offer insight into which potential future pathway is the best one for a business to take.
When it comes to risk and business intelligence, on the other hand, data is used to get insight into how a company is actively preventing risk in that present moment. Let’s explore the most common confluences of risk management and business intelligence.
Compliance Training (Cybersecurity)
The singular leading cause of cybersecurity breaches in business is due to human error – with 95% of breaches being traced back to mistakes individuals have made. Unsurprisingly, this means that companies that are not actively investing in cybersecurity training for their employees are at a huge disadvantage when it comes to reducing risk within their industry.
But, for large-scale companies that could potentially have thousands of employees, how exactly do you initiate cybersecurity training and ensure that everyone participates, as well as learns the content well enough to take forward into the future?
One of the main applications of business intelligence tools is to siphon large quantities of data and feed it back in easy-to-understand formats. In the world of compliance training, business intelligence has made it so that each employee has a certain number. This number can then move through different security modules, with the system automatically tracking them as they do so.
This continual movement through the system would be impossible to track without business intelligence tools, as they provide a simple method of collecting potentially thousands of disparate data points and presenting them in one location. Especially with how pressing the cyber threat is becoming, being able to turn to BI tools to manage the ongoing education of the workforce is vital.
Market And Competitor Assessments
While lots of business intelligence focus on internal business structures, as with the first two points in this article, this is not where BI has the end. By turning towards publicly available business data, BI tools can also be put to work in distinguishing market trends and current competitor positioning.
Public open source data, compiled in what is known as a delta lake, is completely available for businesses to use. With this, they can trace current market trends, alongside looking at competitor trajectories. Using this information and feeding it into their own BI platforms, data scientists are then able to see if their company is on track to keep up with competitors.
This could be in terms of any publically available metric, helping businesses to understand where they fall within their own industry. With this known, they can decide whether they should start taking more or fewer risks with their decisions. If they’re falling behind competitors, then it could be a great moment to introduce a new strategy.
Alternatively, if the business currently has a great trajectory, especially compared to the market average, then this would be a time to continue with what’s currently going well, and reduce the number of business risks that are taken. Information like this allows businesses to act much more intelligently, with data leading their way.
Also read: What is Business Analytics? Definition and Solutions
Reducing Uncertainties Through Continual Insight
A large part of risk management within the business is using BI tools to research which decision is the best for the business at that moment. By continually researching the business itself, tracking every aspect of its productivity, output, and expenditure throughout the supply chain, a fully formed picture of the business can be produced.
By honing in on areas that are currently underperforming, a business can begin to assess why this could be. For example, perhaps one particular team consistently has lower output numbers than a similarly sized team in the same job roles. If this is the case, digging into the reasons behind this could reveal where resources are being misallocated within a business or where employees need more training.
Using business intelligence tools to continuously monitor a company allows for its continual improvement, focusing on underperforming areas and working to fix them. This practice reduces the risk of a business falling behind or wasting capital, as it will have a much clearer pathway toward singling out problem areas and then working toward improving them.
Over time, business intelligence allows a company to reflect upon its own practices, hone them, and develop a more efficient structure going forward.
While risk can never be completely eradicated in business, the use of business intelligence tools can help to significantly reduce the potential impact of said risk. By continually employing business intelligence within a company, data scientists can help to inform the future growth of that business while also ensuring it follows the best possible practices.
From tracing and following community developments to reducing the cybersecurity risk, business intelligence tools can help to radically reduce the extremity of risk that businesses take.