Living in the digital age provides access to more information and entertainment than ever before. People can explore the world or shop for rare items from the comfort of their homes; research virtually any topic with direct access to experts; socialize and collaborate with others in virtual environments to create art, share ideas or run businesses.
But as the technologies that open new doors and opportunities continue to advance, it subjects people to sensory overload — buried in data, tasks and demands to do more with the information at their fingertips. Modern contractors are no different as they struggle to make sense of the deluge of data that their projects produce while still meeting increasingly demanding expectations.
That’s why today’s innovative contractors are demanding their software do more than simply store and report historical information. They need solutions designed to help them better organize, analyze and share information – solutions that help them turn the deluge of data into a reservoir of intelligence that, with the right tools, can become a powerful advantage in a competitive market.
In an industry characterized by high-risk, low-margin projects, intelligence is an obvious requisite for anyone wishing to succeed as a contractor. Long ago people realized they could overcome the limitations of muscle power by applying steam, gas and electric powered tools. Today, contractors are beginning to complement their intelligence born from experience with intelligence born from new techniques and approaches in information technology.
These new technologies and techniques are often grouped under the umbrella term “business intelligence” or BI. There are, however, different ways and degrees to which data can be organized and analyzed. A key distinction is the one between business intelligence and business analytics. BI focuses on the intelligent reporting and presentation of existing data in order to help make decisions based on past and present performance. Business analytics applies algorithms to data in order to uncover new, predictive sets of information relevant to a business. In other words, BI is about making better decisions given what (should) already be known. Business analysis is about uncovering previously unknown relationships and providing new, predictive information to help guide business decisions.
Putting BI to Work
Intelligence for its own sake may be a noble pursuit, but in business it is only as valuable as the advantages it provides in the marketplace. The more effort a company makes to apply business intelligence tools and techniques, the greater the potential benefit. Here are several ways contractors who have embraced the idea of building their “business IQ” see real results:
Where benchmarking uses historical performance to anticipate and improve current performance, predictive analytics applies algorithms that comb data for correlations that might not have been anticipated. It can expose business information that a company did not even realize it did not have – and which competitors most likely do not have.
Note that both benchmarking and predictive analysis can provide a view into the future. Benchmarking will help test the hypotheses about what’s working or not, but a company must come up with the parameters to measure and compare. Predictive analytics will look at data through the more general lens of algorithms meant to find things that may not have been anticipated. But as with all things in the world of Business Intelligence, it all begins with the data.
The Rise of Business Intelligence in Construction: Part II covers practical advice about implementing BI in an organization.
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