What is Business Intelligence?

What is Business Intelligence?

Business intelligence (BI) is an umbrella term that consists of different types of business software applications. These software applications are used to analyse an organisation’s raw data. The raw data is the data that business records in the daily transactions of an organisation.

Data may come from different activities such as interactions with customers, management of employees, execution of operations or administration of finance. BI is made up of various associated activities, including data mining, online analytical processing, querying and reporting.

Figure shows the activities involved in business intelligence:

Organizations use BI for improving the decision-making process, reducing costs, and identifying new business opportunities. BI provides corporate reporting and a set of tools to extract data from enterprise systems. Also, CIOs (Chief information Officers) of organisations use BI to recognize unproductive business processes that are suitable for re-engineering.

BI tools enable users to analyze data themselves instead of waiting for IT experts to run complex reports. This simplification of BI use allows non-technical business users to utilize BI tools.BI enables you to make effective use of data and information to make better business decisions.

BI comprises the following elements


It is a process of retrieving data, formatting it, and delivering it to the organization internally and externally.


It is a process of identifying patterns and creating relationships in a group of data.

Data mining

It represents the mining of original information from data.

Data quality and interpretation

It represents the greater or lesser connection between data and real-world objects.

Predictive analysis

It is a branch of data mining, which predicts probabilities and trends in business.

Reporting and analysis are the most crucial part of business intelligence and most BI vendors compete by adding and improving these features to their solutions.

Evolution of Business Intelligence

BI has evolved and emerged as a critical need of every organization. The introduction of BI has minimized the use of traditional systems of analysis and data interpretation such as manual data gathering and analysis and mainframe computers.

Let us discuss how BI has evolved through recent years in the following section.

Reduced Dependency on It Experts

Today, BI is no longer solely controlled by IT departments in an organization other business users are also able to control the BI tools. It is a positive change toward reducing the dependency of business users on IT experts.

Therefore, the business user’s community can have an active role in BI processes. With the rise of powerful desktop BI tools such as Tableau, Tibco Spotfire, and SAS Visual Analytics, it is now possible for users to have BI on their desktop computers that used to be reserved for enterprise-level tools.

These tools are not replacements for enterprise BI tools. Rather, they provide users more flexibility to explore and discover new possibilities in decision-making and reporting.

Unrestricted Reporting

The latest BI tools have destroyed the notion of restricting users to the reports they have been given. In many organizations, users now can freely explore data and create the reports they desire. Obviously, there are still limitations on the consumption of system resources for a user and security still ensures users can only access data for which they have authorization.

However, users are no longer restricted to experimenting with new metrics and new views of data as they once were. This allows users to explore, experiment, and innovate with data.

Advanced Visualisation

The arrival of advanced visualizations and dashboards has also altered the situation in a positive way. The range of visuals available has expanded from standard tables to pie and bar charts. Moreover, where graphics used to be mostly static, today’s graphics can be linked together to give users an interactive experience with the data in real-time.

For example, if you click on one country on a map it can automatically filter the data on all other components of a report to show data from just that country. This flexibility permits faster insights.

Independent of SQL Logic

BI tools are no longer limited to just standard SQL logic. Many BI tools contain more advanced analytics such as predictive modeling algorithms. Additionally, the growing use of non-SQL processes using platforms such as Hadoop and Teradata Aster has changed the situation.

Such platforms have expanded the types of processing that can be useful for data before it is passed to users using a BI tool. Now, complex programming constructs are added to a BI process which makes a deeper range of analytic processing possible. This increases the realms that can be explored in business.

After going through all these changes comes forth the picture of the modern business intelligence environment.

BI is not just a standard SQL-based report provided by IT. BI has turned out to be a self-service, visual, interactive environment that includes some advanced analytics. As deep analytic tools continue to enhance their reporting capabilities and reporting tools continue to add deeper analytics, the lines of which tools do what are blurring. Also blurring is the line between the role of IT and business users.

Although this evolution can be disturbing for some users at first, the organizations that make themselves comfortable with the new change instead of resisting it will find it beneficial eventually. This is because we cannot presume how effective the new methods are until we use them ourselves.

Importance of Business Intelligence in Organisations

Business Intelligence is a concept that contains the delivery and integration of relevant and useful business information in an organization. Organizations use business intelligence to identify noteworthy events and monitor business to adapt quickly to their changing environment.

BI can improve the decision-making processes at all levels of management by providing effective BI training. It also improves the tactical and strategic management processes.

Figure shows the importance of BI in an organization:

Consumer Behavior Insights

One of the main advantages of implementing business intelligence software is the fact that it will enhance the organization’s ability to analyze the current consumer buying trends.

After finding out what your consumers are buying, you can use this information to develop products that match the current demands and improve your profitability as you can attract valuable customers.

Improved Visibility

BI enables you to control various important processes in an organization. Therefore, you should invest in a good business intelligence system. Business intelligence software enhances the visibility of these processes and makes it possible to recognize areas that need to be improved.

In addition, if you have a situation where you have to go through many pages in your detailed periodic report to assess the organization’s performance, you can save time by skilled intelligence analysts using BI software.

Actionable Information

A business intelligence system consists of an analytical tool that provides you the insight to make successful strategies for your organization.

This is because the BI system is able to discover key trends and patterns in organizational data and makes it easier for you to establish relationships between different areas of business.

It also helps you to understand the implications of different organizational processes better and improve your ability to recognise appropriate opportunities in an organization. It further allows for making effective plans for the future.

Improved Efficiency

One of the important reasons for investing in an effective business intelligence system is that it can improve efficiency of organization which leads to increased productivity. Business intelligence can be used to share information across different departments in your organization.

It reduces the time in reporting processes and analytics. This simplification of information sharing reduces the duplication of duties within the organization and improves the accuracy and usefulness of the data produced by different departments.

In order to obtain all the benefits of an effective business intelligence system, organizations need to ensure investing in skilled BI personnel and software designed for analytical proficiency and availability. It also needs to be ensured that the selected system can analyze both the content and context of data.

Business Intelligence in Contemporary Organisations

A successful BI solution can enhance the productivity of your organization. It supports your processes and best practices and allows employees to boost the power of the entire organization.

The right BI solution provides financially accurate information and the ability to use it in your organization. This empowers you to make effective business decisions that can impact an organization in the best way possible.

For instance, there are many restaurant chains such as Hardee’s, Wendy’s, Ruby Tuesday and T.G.I. Friday’s who are the big users of BI software. They use BI software to make strategic decisions, such as new products to add to their menus, dishes to remove, and underperforming stores to close.

BI is also used by these restaurants for tactical matters such as re-negotiating contracts with food suppliers and recognizing chances to improve unproductive processes. Restaurant chains are very operations-driven and BI words as a central component to help them run their businesses.

These restaurants are among the leading group of companies in all industries that are truly getting real value from these systems.

One crucial component of BI—business analytics—is essential to the success of companies in a wide range of industries, and more famously essential to the success of professional sports teams such as the Boston Red Sox, Oakland A’s, and New England Patriots

In retail, Walmart uses huge amount of data and category analysis to dominate the industry. Amazon and Yahoo are other examples of such organizations. They are not just e-commerce sites they are tremendously analytical and follow a “test and learn” approach to business changes.

Capital One, another organization runs more than 30,000 experiments a year to recognize desirable customers and price credit card offers.

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  • Bibliography: Seltzer, M. (2014). Data Mining for Dummies. 1st ed. For Dummies.

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  • Definition of Data Mining. Retrieved from: http://www.anderson. ucla.edu/faculty/jason.frand/teacher/technologies/palace/datamining.htm

  • Classification of Data Mining. Retrieved from: http://www.tutorialspoint.com/data_mining/dm_systems.htm

  • Meaning of Business Intelligence. Retrieved from: http://www. cio.com/article/40296/Business_Intelligence_Definition_and_Solutions

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