Definition of BI?
Business Intelligence (BI) is a technology-driven process that analyzes data and delivers actionable information to help executives, managers, and workers make informed business decisions.
BI is a broad term that encompasses data mining, process analysis, performance benchmarking, and descriptive analytics. It combines business analytics, data mining, data visualization, data tools and infrastructure, and best practices to help organizations make more data-driven decisions. BI parses all the data generated by a business and presents easy-to-digest reports, performance measures, and trends that inform management decisions.
Common functions of BI technologies include reporting, online analytical processing, analytics, dashboard development, data mining, process mining, complex event processing, business performance management, benchmarking, text mining, predictive analytics, and prescriptive analytics. BI tools can handle large amounts of structured and sometimes unstructured data to help identify, develop, and create new strategic business opportunities. They aim to allow for the easy interpretation of these big data.
Are you new to the world of Business Intelligence? Start with our article on the Basics of Business Intelligence to gain a solid foundation.
The Evolution of Business Intelligence:
Business intelligence is a modern definition of BI. Traditional Business Intelligence, capital letters and all, originally emerged in the 1960s as a system of sharing information across organizations. The term Business Intelligence was coined in 1989, alongside computer models for decision-making. These programs developed further, turning data into insights before becoming a specific offering from BI teams with IT-reliant service solutions.
Business intelligence is sometimes used interchangeably with business analytics, but there are alternate definitions. In this definition, business analytics is the subset of BI focusing on statistics, prediction, and optimization, rather than the reporting functionality. BI and business analytics are sometimes used interchangeably, but there are alternate definitions.
How BI Can Help Organizations:
BI methods are processes and methods of collecting, storing, and analyzing data from business operations or activities to optimize performance. All of these things come together to create a comprehensive view of a business to help people make better, actionable decisions. Over the past few years, business intelligence has evolved to include more processes and activities to help improve performance. These processes include data mining, reporting, performance metrics and benchmarking, descriptive analytics, querying, statistical analysis, data visualization, visual analysis, and data preparation.
BI can be used by enterprises to support a wide range of business decisions ranging from operational to strategic. Basic operating decisions include product positioning or pricing. Strategic business decisions involve priorities, goals, and directions at the broadest level. In all cases, BI is most effective when it combines data derived from the market in which a company operates (external data) with data from company sources internal to the business such as financial and operations data (internal data). When combined, external and internal data can provide a complete picture which, in effect, creates an "intelligence" that cannot be derived from any singular set of data.
The Value of BI:
Business intelligence is important as it improves an organization's business operations through the use of relevant data. Companies that effectively employ BI tools and techniques can translate their collected data into valuable insights about their business processes and strategies. Such insights can then be used to make better business decisions that increase productivity and revenue, leading to accelerated business growth and higher profits. Without BI, organizations can't readily take advantage of data-driven decision-making. Instead, executives and workers are primarily left to base important business decisions on other factors, such as accumulated knowledge, previous experiences, intuition, and gut feelings.
There are different types of business intelligence, which one suits your company?
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What is the difference between Business Intelligence and Business Analytics?
Business Intelligence focuses on reporting and visualizing data, while Business Analytics involves using data to gain insights and make informed decisions. Our training program covers both BI and Business Analytics
What types of data are used in Business Analytics?
Business Analytics can use structured data, such as transactional data, as well as unstructured data, such as social media posts and customer reviews.
What is a dashboard in Business Analytics?
A dashboard is a visual representation of key business metrics and KPIs that provides an at-a-glance view of business performance.
How can businesses ensure the quality of their data for Business Analytics?
Businesses can ensure the quality of their data by implementing data validation processes, using data cleansing tools, and conducting regular audits of their data.
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