Business Intelligence Strategy: Development, Best Practices, and Examples

Don’t purchase an expensive BI solution just yet! While it might be tempting to jump into the latest tools, consider whether you have a business intelligence strategy in place? Without a solid strategy, you risk mismanaging resources and your business intelligence data won’t deliver the insights you need. 

In this guide to business intelligence basics, we’ll cover the benefits of a BI strategy, outline the steps for developing a successful business intelligence strategy, and provide real-world use cases to help you build your BI strategy aligned with your business goals. 

What is business intelligence?

Gartner’s definition of business intelligence, or BI, is “the applications, infrastructure and tools, and best practices that enable access to and analysis of information to improve and optimize decisions and performance.” 

Basically, business intelligence is how you collect data and use it for strategic decision-making. BI enables organizations to transform raw data into meaningful insights that can help optimize operations, identify trends, and drive strategic planning. Check out our blog “Business Intelligence 101” for more background information. 

What is a business intelligence strategy?

A business intelligence strategy is a structured plan that defines how an organization collects, analyzes, and uses data to support decision-making and drive growth. It ensures BI initiatives align with business objectives, improve efficiency, and support a data-driven culture.

Think of a BI strategy like this: Your business objectives—increasing revenue, improving customer retention, or optimizing operations—are your destination. To effectively navigate towards that destination, you need a strategy to steer your course. This strategy uses your technology stack (your tools) and requires coordinated input from all departments—marketing, finance, sales, and others—much like a crew working together. Along the way, you’ll need to make course corrections based on performance measurement and reporting. A strong business intelligence strategy provides that navigational guidance, helping you stay on track and reach your goals efficiently.

Components of a BI strategy

A business intelligence strategy consists of several key components working together to transform data into actionable insights. Here are four crucial components:

1. Data collection and integration

The first component of a BI strategy involves collecting data from multiple sources within the organization, including sales, marketing, finance, and operations. and consolidating it into a centralized system, such as a data warehouse or cloud platform. This approach ensures data is consistent, accurate, and accessible. Data may come from structured sources (like databases) or unstructured sources (such as social media or customer feedback). Integration tools, such as ETL (Extract, Transform, Load) processes, are often used to clean and standardize data before analysis.

2. Data analysis and reporting

After collecting the data, the next step is to analyze it to gain meaningful insights. This includes historical analysis and predictive analysis. BI tools, such as dashboards and data visualization software, help monitor key metrics (KPIs) and create reports. 

3. Decision support and actionable insights

The core of a BI strategy is to provide actionable insights that drive better business decisions. This component focuses on leveraging data to inform decision-making, from strategic planning to operational improvements. BI tools can include predictive analytics, machine learning, and AI to report past performance and recommend actions based on data trends. These insights should be delivered to the right stakeholders in real time to help them make informed decisions.

4. Governance and security

Data governance is essential for maintaining accurate and consistent data that complies with industry regulations. It involves setting strong policies for data quality, access control, and privacy. Security measures must also be in place to protect sensitive data from unauthorized access and breaches. This governance framework ensures only authorized individuals have access to specific data sets and that the data is kept safe through encryption and secure storage practices. Governance is vital for maintaining trust in the BI system and ensuring regulatory compliance with regulations like GDPR and HIPAA.

Benefits of a business intelligence strategy

A business intelligence strategy brings several benefits. Here are just a few of the advantages of having a solid BI strategy in place:

Improved decision-making

With a BI strategy, your company’s leadership gets accurate, real-time insights to make informed decisions. With data from your BI strategy, you can make business decisions that align with strategic goals. You can also spot potential issues before they escalate and adjust decisions to mitigate those risks. 

Accurate benchmarks

BI data provides a better sense of your company and competitors’ past and present performance. With a concrete understanding of where you are, you can set realistic goals and identify areas for improvement. 

Better operational efficiency

BI strategies automate much of data collecting and analyzing, which reduces manual reporting and enhances productivity. A streamlined BI strategy leads to faster access to reports and insights so your team members can spend time doing more high-level tasks. 

Competitive advantages

By leveraging BI tools, organizations can analyze market trends and customer behavior faster.

This helps identify new opportunities before competitors and allows you to optimize pricing strategies and product offerings.

Communication and unity

Making decisions as a company is easier when you’re all on the same page. A BI strategy ensures that data from different sources, such as sales, marketing, finance, and HR, is integrated into a single source of truth. This consistency boosts data transparency and eliminates data silos and inconsistencies.

Future readiness

A strong BI strategy allows businesses to scale their data operations as they grow. This means your company has the ability to handle increasing data volumes, can adapt to emerging technologies like AI and machine learning, and is future-proof against market disruptions.

Better performance tracking and accountability

BI dashboards provide real-time KPI tracking, making it easier to measure individual and team performance, identify bottlenecks and optimize workflows, and hold departments accountable for data-driven results.

Cost reduction and revenue growth

By improving efficiency, eliminating waste, and uncovering new opportunities, BI strategies contribute to lower operational costs. Your company also increases profitability through data-driven decision-making and more effective financial planning.

How to create a BI strategy

Developing a BI strategy will look slightly different for each organization. However, here are the basic foundations you’ll need for a successful BI strategy. 

1. Define business objectives and key questions

Before diving into data, identify what you want to achieve with BI. Ask questions like what business challenges need to be addressed, what key metrics should be tracked, and how BI will support decision-making. If you understand your objectives first, you’ll be better prepared to measure progress and get more value out of your BI platform. 

2. Assess data sources and infrastructure

Evaluate your existing data landscape to ensure you have the right foundation. Consider what data sources you have, such as CRM, ERP, or databases. Assess whether your data is clean, consistent, and accessible, and determine if you need a data warehouse or cloud storage to enhance your data management and accessibility.

3. Select the right BI tools and technologies

Choose BI platforms and analytics tools that align with your specific business needs. Look at dashboard and visualization tools, such as Power BI, Tableau, Looker, along with data integration and ETL tools. Determine whether you need a cloud or on-premise solution. Your BI solution needs to be compatible with your existing infrastructure and have the features necessary to accomplish your business objectives. 

4. Establish data governance and security policies

With great data comes great responsibility. Before you start gathering data, your BI strategy needs to include data governance and security policies. Define clear rules for managing data quality, security, and compliance. Address who has access to what data, how data accuracy is maintained, and ensure compliance with industry regulations, like GDPR and HIPAA.

5. Develop dashboards, reports, and insights

Build the analytics framework to transform data into actionable insights. Design user-friendly dashboards for different teams, automate report generation for real-time tracking, and use AI/ML for predictive analytics.

6. Train users

Data is only useful if you can implement it. You’ll need to make sure employees can effectively use BI tools, interpret data insights, and know how to implement changes. Conduct training sessions for teams and encourage a data-driven decision-making culture.

7. Continuously measure and improve

Track key performance indicators to measure the success of BI initiatives. Identify inefficiencies, refine data models, and adjust dashboards to ensure continuous alignment with business goals. Regularly review the BI strategy to incorporate new technologies, evolving business needs, and industry trends. Adapt to changes by integrating new data sources, expanding analytics capabilities, and ensuring scalability as the business grows.

Examples of BI strategy

What does a successful business intelligence strategy look like in real life? These examples can help you understand how to implement BI strategies at your own company. 

1. Customer analytics and retention strategy

Objective: Improve customer retention by analyzing behavior and preferences.

Approach:

• Integrate data from CRM, website analytics, and customer service interactions.
• Use predictive analytics to identify churn risks.
• Implement personalized marketing campaigns based on customer segmentation.
• Track key metrics like customer lifetime value (CLV) and Net Promoter Score (NPS).

Outcome: Increased customer retention, improved engagement, and higher revenue from repeat customers.

2. Financial performance and cost optimization strategy

Objective: Enhance financial decision-making and reduce operational costs.

Approach:

• Centralize financial data from accounting systems, sales, and procurement.
• Automate financial reporting for real-time budget tracking.
• Use BI dashboards to monitor expenses, profitability, and cash flow.
• Identify cost-saving opportunities by analyzing vendor performance and resource allocation.

Outcome: Improved financial transparency, better forecasting, and reduced unnecessary spending.

3. Supply chain and inventory management strategy

Objective: Optimize inventory levels and improve supply chain efficiency.

Approach:

• Integrate data from suppliers, warehouses, and sales channels.
• Use real-time dashboards to monitor stock levels and demand patterns.
• Implement predictive analytics to forecast supply chain disruptions.
• Automate alerts for low stock, excess inventory, and delivery delays.

Outcome: Reduced stockouts and overstock, lower operational costs, and a more efficient supply chain.

4. Workforce productivity and HR analytics strategy

Objective: Improve employee performance and optimize workforce management.

Approach:

• Collect data from HR software, performance reviews, and attendance records.
• Analyze employee engagement, turnover rates, and training effectiveness.
• Use BI dashboards to track productivity metrics and workforce trends.
• Implement data-driven strategies for hiring, retention, and skills development.

Outcome: Higher employee engagement, reduced turnover, and more efficient workforce planning.

What to look for in a business intelligence solution

When considering a business intelligence (BI) strategy solution, it’s essential to evaluate several key factors to ensure the solution aligns with your business goals, infrastructure, and needs. 

Here’s what to look for:

Ease of use

The solution should be easy to use, even for non-technical users. Intuitive dashboards, drag-and-drop interfaces, and simple report generation enhance user adoption. It’s also important that the solution can be customized to your organization’s unique needs, workflows, and goals.

Integration capabilities

The solution should seamlessly integrate with your existing data sources, such as the CRM, ERP, marketing platforms, or databases. It should support common data formats and APIs to ensure smooth data flows. Additionally, consider whether you prefer a cloud-based or on-premise solution. Cloud-based options offer scalability and remote access, while on-premise solutions may provide more control and security.

Data management and governance

Look for a solution that ensures data quality, consistency, and accuracy by offering features that clean, transform, and consolidate data from various sources. Data governance is also crucial, so ensure the solution includes robust tools for managing access through role-based access, maintaining security with encryption, and tracking usage via audit logs, especially if you handle sensitive or regulated data.

Scalability

The solution should be scalable to accommodate growth in data volume and complexity. As your business evolves, your BI needs will likely become more sophisticated, so it’s important that the platform can handle increasing data and provide more advanced analytics. Additionally, the solution should be adaptable to emerging technologies like AI and ML.

Reporting and analytics capabilities

Look for BI solutions that provide real-time, customizable dashboards that deliver key insights at a glance. Advanced analytics features, such as data visualization, trend analysis, forecasting, and predictive modeling, are essential for extracting meaningful information from your data. Also, ensure the solution supports ad hoc reporting, allowing users to create on-the-fly reports based on the latest data without needing deep technical expertise.

Cost and ROI

Evaluate the pricing structure to determine whether it fits your budget, considering factors such as licensing fees, additional costs for extra features, and any hidden fees (e.g., data storage or user count). In addition to the upfront costs, consider the return on investment (ROI). A strong BI solution should offer substantial ROI through better decision-making, improved operational efficiency, and cost savings.

Vendor support and community

Check that the vendor offers strong customer support, including training, documentation, troubleshooting, and regular updates. An active user community can also be valuable, providing resources, best practices, and tips for maximizing the use of the solution.

Mobile accessibility

If your team requires access to reports and dashboards while on the go, ensure the solution is mobile-friendly. Look for apps or mobile versions that allow users to access insights from anywhere, which can be crucial for timely decision-making.

Collaboration features

The BI solution should include collaboration features to make it easy for teams to share insights and reports. Features like comments, annotations, and integrations with communication tools (e.g., Slack, Teams) can help enhance collaboration and streamline decision-making processes across departments or with stakeholders.

Vendor reputation and reliability

Research the vendor’s reputation, customer reviews, and case studies. A solution that has been successfully implemented in businesses of similar size and industry can provide a sense of confidence in its reliability. Furthermore, ensure the solution is reliable, with a strong uptime record and clear policies on handling maintenance or downtime.

How Domo can help your business intelligence strategy

A successful business intelligence strategy hinges on a reliable BI platform. Use Domo’s BI platform to transform your data into valuable data products that can be shared, analyzed, and leveraged to take action in your business. 

With Domo’s dynamic dashboards and visualizations, you can get real-time insights that power your organization. Our platform seamlessly integrates data from any cloud or on-premises source. We help you create real-time, self-service BI dashboards and analytics to empower your team with data. You can also create custom intelligent apps to automate and streamline your work processes. 

To learn more about how Domo can help you with your business intelligence strategy, watch some two-minute demos of our platform in action.