– By Brijesh Damodaran
The famous British Mathematician and Data Science Entrepreneur Clive Humby rightly coined the phrase – Data is the new oil. With changing times and increasing technological prowess, every business seems data oriented.
In recent years, the pandemic and people’s never-ending obsession with social media have fuelled an enormous data creation. It led to digitization across the lengths and breaths of society. The individuals and businesses located in tier-II, -III and even beyond embraced technology for education, entertainment, business, healthcare and almost everything under the sky.
Business Intelligence and its significance to enterprises
While at the supply side, huge amounts of data were being generated and captured, data on its own is worthless unless it has been influential in delivering actionable insights. Therefore, business intelligence can be an intelligent business investment decision as it helps understand data insights that influence the real-life decision-making of an organisation.
While corporates have been integrating BI in decision-making for a long time, mass adoption amongst SMEs has been rapidly paced due to the continuous stream of new BI products and services launched by start-ups.
Various benefits of business intelligence have made it a bright spot for the investors:
1. BI as a tool: Investors value the companies using business intelligence because of the growth potential of such companies due to their insightful decision-making process. Many companies are data-rich but information-poor. With the help of BI, a company can predict demand and customise its products according to the customer needs. This data-driven personalisation provides an effective way to stay competitive and serve its customers better.
2. Businesses providing BI as a service: BI is like finding a needle in a haystack. It requires AI/ML to replace repetitive tasks and build conclusions. Given the importance of BI, the businesses providing the same are becoming dearer to the investors.
a) Data Volume: BI improves with the increasing data volume. With large amounts of data, the role of data aggregators will be of higher importance. Thus, businesses focused towards providing intelligence as a service see the data as an asset vis-à-vis individual businesses which view it as a cost.
b) Cost effectiveness: The cost of processing the data into information is an expensive process. The cost-benefit ratio is favourable for a business when the information has multiple use cases as compared to an individual use case.
Thus, with the businesses being challenged to stay relevant, more and more MSMEs are adopting Business Intelligence. Start-ups have contributed largely to such adoption by providing products that are easy to deploy and curated towards the needs of such enterprises.
With the decreasing cost of computer hardware and the internet, data collection and processing became mainstream. Early on, VCs identified the emerging mega trend and invested in BI start-ups. Overall, investors have been banking on business intelligence due to the immense growth potential. It is also evident that firms committed to laying the foundations of the business intelligence in their businesses have benefitted widely from better-quality decision making, agility in operations and lower risks.
Therefore, having a 2-pronged approach is useful – Identifying businesses that are effectively deploying Business Intelligence and businesses providing intelligence as a service. It is safe to conclude that leaders can only mine this land of unexplored opportunities if they know the secret of processing the data into information.
(Brijesh Damodaran is the Co-founder & Chief Investment Office of Auxano Capital)