Essay Example on Business Intelligence: An Intangible Asset for Organizations

According to a report by the Economist (2010), a decade ago, technologies usually referred to as business intelligence were not available to all organizations but only to big corporates such as Wal-Mart. However, as the cost of technology production decreases, the access use of business intelligence has become a common theme and a pivot point of organizations' strategies (Jordan & Ellen, 2009). Organizations are rapidly learning the importance of information as an intangible asset. Data allows companies to track customer behavior and visualize market trends hence focusing their energies and strategies on the most productive activities.

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One great example is the Netflix Company, which uses its data analytics and big data to maximize is sales and subscription revenue. At over $164 billion, the company is highly valued ahead of Disney in the media industry. In that regard, the company benefits from its 150 million subscribers by utilizing data analytics to realize trends and customer behavior on their site and then using that information and trends to recommend TV shows and movies per the customer preferences. Netflix uses the information regarding the customer interaction with the platform and rating system to create a customized user profile, which is far much more meaningful than conventional marketing. As a result, Netflix harnesses the power of information to enhance customer relationships and empowering customer retention. The recommendation marketing gimmick accounts for 80% of the content streamed, and therefore, the company earns more than a billion from customer retention (Dixon, 2020).

However, despite the rise of data as a value generator, poor use of information may have a detrimental impact on the value creation of the company. Not only does poor data collection and management affect the organization financially, but it has a negative influence on efficiency, opportunities, credibility, and productivity. Taking, for instance, Netflix taking wrong and mistaken subscriber information will lead to the wrong recommendation hence poor decision making that creates inconveniences and increases costs. Additionally, it will lower the productivity levels by spending more time on one few subscribers, which also results in lost opportunities to serve other subscribers. Further, the adverse effects of poor data use are reflected in lost credibility and poor reputation of the company, thus negatively affecting customer retention (Haug, Zachariassen & Liempd, 2011).

Conclusion

In conclusion, as the world gets increasingly digital, the amount of information will become vast, which will increase the benefits of the data. The prominent value created by broad information is tracking the customer behavior and market trends and aligning them with the company strategies and objectives. However, data analysis will potentially lead to the discovery of new value chains in the organization. Despite these benefits, there is a caveat of poor use of data resulting in inefficiency, lost productivity, and opportunities. In that regard, organizations must always assess and reassess the use of data as their intangible asset.

References

Data is a business asset beyond imagination - here is why (and where). i-SCOOP. (2020). Retrieved 22 June 2020, from https://www.i-scoop.eu/big-data-action-value-context/data-business-asset/.

Dixon, M. (2020). How Netflix used big data and analytics to generate billions - Selerity. Selerity. Retrieved 22 June 2020, from https://seleritysas.com/blog/2019/04/05/how-netflix-used-big-data-and-analytics-to-generate-billions/.

Haug, A., Zachariassen, F., & Liempd, D. (2011). The costs of poor data quality. Journal of Industrial Engineering And Management, 4(2). https://doi.org/10.3926/jiem.2011.v4n2.p168-193

Jordan, J., & Ellen, C. (2009). Business need, data, and business intelligence. Journal of Digital Asset Management, 5(1), 10-20. https://doi.org/10.1057/dam.2008.53

The Economist. (2010). Data, data everywhere: A special report on managing information. London. Retrieved from https://www.economist.com/special-report/2010/02/27/data-data-everywhere