Business intelligence refers to the process of utilizing software and services to turn data into intelligence that can be used. This intelligence can be used to guide a business’ tactical and strategic decisions. In this article, we provide an in-depth overview of business intelligence and discuss why organizations should use it and how they can use it to their advantage. Business intelligence is a process that relies on technology to analyze data and provide actionable information that the executives, managers, and other corporate end users can use to make the most informed business decisions. It comprises a large array of tools, applications and processes that make it possible for a business to gather data from both internal systems and external sources. Once that information is collected, the key decision makers of an organization can prepare it to be analyzed, develop and run questions regarding that data, and develop reports, dashboards and visualizations in order to present the analytical results to the decision makers for an organization, as well as an organization’s operational workers.
Business Intelligence vs Business Analytics
Business analytics and business intelligence are often used interchangeably; however, the two do differ. Business analytics is also known as descriptive analytics because it illustrates past or current information. Business analytics doesn’t tell an organization’s key players what they should do; rather, it tells them what once was and what currently is.
The Importance of Business Intelligence
Business intelligence offers key benefits for an organization. The tools that are used to perform business intelligence can help to accelerate and improve the decisions that key corporate players make. It can also help to make the most of internal business processes, as it can increase operational efficiency, drive new revenues, and help businesses gain a competitive edge over their rivals. Additionally, business intelligence can assist new companies with determining trends in their industry’s market, as well as pinpoint potential issues that need to be addressed.
The data that is collected by business intelligence can comprise past information that is kept in a data warehouse. It can also include new data from source systems as that data is developed, thus allowing the tools that are used for business intelligence to support the strategic and tactical processes that go into making important decisions.
Business intelligence isn’t only valuable for enterprise companies; businesses of all shapes and sizes and across a variety of industries can benefit from business intelligence. Some of the biggest benefits that business intelligence provides include:
- Increase productivity. Traditional methods that are used for gathering data involve compiling and analyzing data, and then writing reports that relate to that information. This process can be incredibly time consuming, particularly for small business that may not have a dedicated set of employees do handle the task. A business intelligence program gathers pertinent data and creates reports with the simple click of a button. This frees up time and resources, which allows workers to focus more on their own tasks and increase their productivity.
- Provides more consistent results. Often times, business establish a set of goals that seem reasonable for a specific project; however, the outcome often ends up being completely different. Thanks to business intelligence, businesses can keep better track of information, and that information can be accessed by the parties that need it, when they need it. In other words, business intelligence can help you better achieve the goals that you are trying to achieve.
- Better return on investment. Business intelligence allows for enhances strategic awareness, quicker reporting, access to better quality information and data, and decreased overheads and operating costs. This can have a highly positive influence on an organization’s return on investment.
- Obtain insight regarding consumer behavior. One of the biggest benefits of business intelligence is that it can increase a business’ ability to assess the current buying trends of consumers. When an organization understands what it is that consumers are buying, they can use that information to develop products and services that match the current trends in consumption. This, in turn, will improve the profitability of a business.
- Increases visibility. Business intelligence can help to improve visibility and control of a variety of important processes that are related to an organization. It also helps businesses identify any areas that need to be improved.
- Turns data into actionable information. The tools that are used for business intelligence provide the insight that is needed to successfully develop effective strategic plans that are important for an organization. The reason? – a business intelligence system can identify key trends and patterns in an organization’s data. This can make it easier to make important connections between different areas of a business that might seem unrelated.
Kinds of Business intelligence Tools
Business intelligence blends a large set of applications that are used for data analysis, which includes:
- ad hoc analytics and querying
- online analytical processing
- enterprise reporting
- real-time business intelligence
- mobile business intelligence
- operational business intelligence
- software as a service business intelligence
- open source business intelligence
- location intelligence
- collaborative business intelligence
Other technologies that are used in business intelligence include:
- data visualization software that is used for creating infographics, such as charts
- business intelligence dashboard creation tools
- performance scorecards that are can display visualized data business metrics
In recent years, tools that make data visualization possible have become the standard of business intelligence.
Some business intelligence programs also use advanced analytics tools, which can include:
- predictive analytics
- statistical analytics
- big data analytics
- data mining
- text mining
However, in a lot of situations, advanced analytics projects are executed and managed by different teams of data scientists, predictive modelers, experts in statistical analysis, as well as other individuals who are highly skilled in analytics.
The data that is collected via business intelligence is usually stored in a data warehouse that holds divisions of an organization’s information. Prior to being used in business intelligence applications, raw data that is collected from various source systems has to be integrated, merged and cleansed. This is process is complete with tools that allow for data quality and data integration. This ensures that the information is being properly analyzed by users, and that users are receiving consistent information.
Business Intelligence in Action
Previously, the primary users of business intelligence applications were professionals in the IT sector. However, in recent years, the tools that are used for business intelligence have evolved and have become more intuitive and user-friendly. This has made it possible for a large amount of users across various organizational domains to take advantage of these tools.
There are two main ways business intelligence is used:
- Classic business intelligence. This process involved IT professionals using in-house transactional data to develop reports.
- Modern business intelligence. This process involves business users interacting with agile, intuitive systems to assess data more quickly.
The majority of businesses prefer classic business intelligence for specific types of reporting where accuracy is exceedingly important; regulatory and financial reports, for example. When businesses require insight into dynamics that change quickly, companies tend to rely on modern business intelligence tools. For example, businesses may use modern business intelligence tools for marketing events, as being fast is more valued over getting the data completely correct.
The Introduction of Self Service Business Intelligence
Software developers are reacting to the demand for multiple capabilities for business intelligence tools. As such, they are re-engineering the products that they offer so that they include multiple functionalities within a single platform.
This has led to the development of self-service business intelligence that anyone – outside of IT professionals – can use. However, IT does still play a key role in the use of business intelligence for many organizations. Why? – Because IT still has to determine and manage policies. They also have to handle the governance and enablement that surrounds the data, as well as the access to it. Furthermore, these professionals have to work with users to ensure that business intelligence tools are providing the insights that they seek.
Trends in Business Intelligence
As with all things related to business, there are trends that relate to business intelligence. Some of the biggest trends in business intelligence include:
- Use of the cloud. Business intelligence is now transferring into the cloud. This is due largely in part to the increase security solutions that have been developed in the cloud, which makes storage of the information collected by business intelligence systems much more effective.
- Digitalization. The basic idea behind this business intelligence trend is converting offline processes to a digital format. This allows for more efficiency when reading data on electronic devices, which allow for a significant reduction in costs, the ability to obtain and monitor data in real-time, and exceeding customer satisfaction rates by offering a personalized experience.
- Machine learning. This refers to a sub-field of computer science that provides computers with the ability to learn without being explicitly programmed. In other words, it involves designing computers so that they can learn on their own so that they don’t have to be reprogrammed on a constant basis. Machine learning is becoming a big trend in business intelligence, and it is expected to continue being extremely significant.
Business intelligence is a highly valuable tool that all businesses can benefit from. When used properly, it can boost success, increase return on investment, and provide better customer satisfaction.