subject: Building Blocks of Business Intelligence [print this page] Author: Abhijeetsingh Hazare Author: Abhijeetsingh Hazare
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ Where to source Primary data and Secondary data for building market intelligence? Critical business decisions are being made every single day by companies without a Market Research. The volume in terms of percentage of the business decisions made by formal market research is very small as compared to decisions made without market research. One of the major contributing factors is that market research comes at a price and investment in it is not considered to be necessary. Business decision makers can count on the 4 sources of intelligence termed as I2E2 that will fuel their decision making ability. We also call them the Basic Building Blocks of Intelligence 1 - Internal Fact 2 - Internal Opinion 3 - External Fact 4 - External Opinion ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ 1.INTERNAL FACT Prior to deciding on spending time and money on market research, its extremely important to scrutinize the quality of information that is available within the organization, such as Factual Data Like Sales Figures, Trends of sales overtime, prospective Customer lists, enquires, sources of enquires, complaints and their resolution details. ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ 2.INTERNAL OPINION This data comes from what employees foresee based on their perception and views. Here the data extraction should start with priority and important data feeds from - Views and Opinions of the Sales Force - Views of production, quality, and customer service departments. If such scrutinized data from internal facts and Internal Opinion is considered to be reliable, then there is no need to look externally for data. This data would become the business intelligence and would help management to drive business decisions. ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ 3.EXTERNAL FACT The need of sourcing data from external sources arises as internal sources could be considered being biased and full of uncertainty. Hence arises the need for formal research. This could be viewed as Factual Data or Opinions. Factual Data: Official Statistics on Markets, Demographic information, Competitor reports. ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 4.EXTERNAL OPINION Organizations with sufficient data, but lack of intelligence extraction ability from the available data, rely on external opinion from Specialized Consulting Firms or Individual Consultants to find a solution to their business questions. These external sources have a diverse and wide expertise to analyze volumes of data and find out the most relevant intelligence required to take critical business decisions. ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- However Market Researchers view these building blocks in Secondary and Primary data approach. a.SECONDARY DATA : The information which has already been published or has been compiled for some other purpose is termed as secondary data. Some also call it Second Hand data, but this tag is unfair as such data can be extremely useful and may have passed public scrutiny test if in public domain. This means that such data is validated or has been checked for. Also it is available immediately without wait at low or no cost. Some of the examples of Secondary data are - Market Research Reports which are Published - Directory listing of companies and data on them - Publications, Articles or Postings on the internet or in libraries - Sales data like sales trends overtime - Internal Company Data Includes sales data, customer complaints, enquires - Expert Opinion from Trade association, industry bodies, news channels, consulting firms, government bodies. b.PRIMARY DATA: - Primary Data is collected solely for the purpose of the survey. - To source primary data, respondents are directly questioned or their behavior is observed in some way. This would form a base for good decision making as questions and sampling are specifically chosen to meet the objectives of the survey - But Primary data often comes with a high Price tag as compared to secondary data and requires few weeks or sometimes months to collect - Survey Agencies, Market research bodies act as a source for companies seeking survey based customer specific data. --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- The decision to choose primary data or secondary data to build business intelligence is based on the following three important questions Question 1: What accuracy and depth of information is required? (Good Estimates will be sufficient) Question 2: How quickly is the intelligence required? (It may be a case that decision has to be made immediately and there wont be enough time to gather Question 3: What are the financial implication of the decision that is under consideration? (When the Financial budget is small, it is not advisable to choose a expensive external survey. ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Thanks & Regards, Abhijeet Singh Management Consultant Edgesys IncAbout the Author:
Abhijeetsingh Hazare is an expert author and Management Consultant with over five Years of expertise in Market Research/Intelligence, Business Analysis, Requirement Engineering Process, statistical Modeling using SPSS, Crystal Ball, Excel, Risk Management and Presales. He has been recommended by several clients and colleagues across the globe for his work. He has a diverse background working on consulting assignments in several sectors - private companies, public companies, government & nonprofit's. To find out more about him visit http://in.linkedin.com/in/sabhijeets
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