Within organizations today, many decisions must be taken at different levels: strategic, operational, and administrative. Each decision produces an impact, and, in a fully digital era, well-informed decision-making is an important differentiating factor.
The Role of Business Intelligence
Business intelligence has become a key tool in this new era of Big Data. Therefore, the question is: How can business intelligence help incorporate sustainability and minimize risks in development projects in the region?
We define business intelligence (BI) as the use of strategies and tools to transform information into knowledge, enhancing decision-making and gaining competitive advantages. Essentially, it is the ability to transform data into information, and information into knowledge, which improves evidence-based decision-making.
To achieve this, BI combines the organization’s internal information with external data, linking it to Big Data. This approach leverages the vast amount of data available to us today in various forms and from diverse sources. In addition, the pursuit of transparency and continuous improvement has prompted a trend towards open source or open code. This shift has made greater development possible thanks to the complete accessibility of the data.
Managing Non-Financial Risks and Ensuring Sustainability
BI helps us manage non-financial risks that could impact the credit profile of a borrower or a financed project. More importantly it is becoming a vital tool to meet society’s demand for development projects that go hand-in-hand with environmental and social sustainability.
The Inter-American Development Bank has the robust social and environmental protection policies needed to provide project financing. Recently, it has begun modernizing its social and environmental standards to address new regional context and challenges. In 2015, the IDB committed to increasing its portfolio of climate change mitigation projects that, which then represented 16% of its total financing. By 2019, that figure risen to 30%, with a firm commitment by the institution to continue to increase that amount.
BI’s Role in Sustainable Development
This is where BI comes into play, as it offers a vital opportunity for correct project development and efficient resources utilization. By leveraging data, BI drives the technological evolution of solutions to challenges such as climate change, biodiversity loss, water shortages, resilient infrastructure, and over-concentrated urban populations. As these social and environmental challenges become central to the development strategy of an organization, new tactics are needed to attract investments in emerging markets.
For instance, various proposals for precision agriculture in Latin America combine the Internet of Things (IoT), Artificial Intelligence, and BI to transform agriculture into a data-based real-time science. This involves collecting, processing, and analyzing vast amounts of data on environmental factors and crops, combined with agricultural knowledge, to create solutions that result in an optimal environment for sustainable production.
Embracing new technologies
As we can see, the ability to measure performance and maintain a strategic vision of operations that ensures environmental and social sustainability of projects is invaluable in improving processes and differentiating those projects that yet to incorporate BI tools.
At the Inter-American Development Bank’s Environmental and Social Safeguards Unit, we continuously evaluate the opportunities that new technologies offer as vital tools in developing sustainable projects in the region. As Sir Francis Bacon said, “Knowledge is power,” although today, true power lies in understanding information, as we are all rich in data but not in information.
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