Business Intelligence Definition
Business Intelligence (BI) is a process and technology that gathers, preserves, and analyzes the data generated from a company’s performance. It is used for process analysis, data mining, descriptive analytics, and performance benchmarking. BI uses all the data to analyze and prepare an easy-to-read and implied report. It can also present the information in dashboards, charts, and graphs.
The need for Business Intelligence arrives from incidents where managers used to collect inaccurate or incomplete data that forced them to make wrong decisions. The creators of “Financial Models” refer to this as a “garbage in, and garbage out” term.
With BI, a company can take measures in their performance, identify problems to solve and understand the trends around the market that determine management decisions. It can help them to find new revenues and could bring new opportunities.
How Business Intelligence Works
Business Intelligence platforms usually depend on the company’s data warehouses for the entire organization to gather data or information. The data also can be found in small data marts that keep the subsets of business information for each department or business unit. BI data can also provide historical and real-time data using BI tools, which helps make strategic and tactical decision-making processes in the future and in present times.
The data warehouse clusters these data taken from multiple sources and saves those data into a central system that helps prepare business analytics and reporting. All the existing data are combined and cleansed using data integration and quality management tools to ensure that BI teams extract accurate and consistent information. Then BI software provides the result to the user in the form of reports, budgets, charts, and graphs.
The steps Business Intelligence follows are:
● Data Preparation, where data sets are arranged, sorted, and prepared for analysis.
● Analytical querying, where they analyze the prepared data to come to conclusions.
● Distribution of key performance indicators (KPI) and other key outputs from the data to business users.
● Lastly, applying the extracted information in business to help the decision-maker take future steps.
Types of Business Intelligence
Business Intelligence integrates a broad set of data analysis applications that provides different information needs. They are aided by both self-service BI software and traditional BI platforms. The lists of BI technologies that organizations can use are:
Ad Hoc Analysis
It is also referred to as ad hoc querying. It is one of the essential elements of modern BI applications and a key characteristic of self-service BI tools. It is the procedure of writing and running queries to determine specific business issues. They produce their results into dashboards and queries.
Online Analytic Processing (OLAP)
OLAP tools help users to analyze data from multiple dimensions. For example:” what are the sales this year compared to the last year, and who met that sales target between the east and west zones?” It is beneficial for complex queries and calculations. In the past, the data had to be collected from a data warehouse and preserved in multidimensional OLAP cubes. It is now possible to run OLAP analysis directly against a columnar database.
Mobile Business Intelligence provides BI applications and dashboards available on smartphones and tablets. It is mainly used to view data than to analyze it. While designing Mobile BI, the focus was on one feature: it must be user-friendly so that the result displayed on the mobile screen should fit into the mobile screen.
Data is analyzed as it is created, collected, and processed to provide users with an updated view of business operations, customer behavior, financial markets, and other areas of interest. The real-time analytics process often includes streaming data and provides decision-worthy analysis such as credit scores, stock trading, and targeted promotional offers.
Operational Intelligence (OI)
It is also called Operational Business Intelligence. It is also real-time analytics, but it is helpful for operational things. It provides information to managers and frontline workers in business operations. This is designed to help operational decision-making and take fast decisions to solve any issue. For example, it is useful when helping call center agents to resolve a problem a customer is facing and logistic managers in the hassle-free distribution of their products.
Software-as-a-service BI (SaaS BI)
SaaS BI tools employ cloud computing systems hosted by vendors to help them perform data analysis for users in the form of a service that requires a subscription from time to time. It is also known as Cloud BI. Moreover, the SaaS option provides multi-cloud support, which helps organizations install BI applications on different cloud platforms to complete user needs and ignore vendor lock-in.
Open-Source BI (OSBI)
It is an open-source business intelligence software. It typically includes two versions: a community edition that provides service free of cost. Another is a commercial release that needs a subscription and comes with technical support from the vendor. BI teams can also access the source code to fix any development issue.
This BI tool places BI and data visualization functionality directly into business applications. The business users analyze the data within the application and make decisions accordingly. The vendors generally include these embedded analytic features in their application software, while corporate software developers have them in homegrown applications.
Benefits of Business Intelligence
Business Intelligence helps a business in many areas like:
● Making informed strategic decisions
● Identifying trends and patterns
● The increasing performance level and revenue
● Improving operational efficiency
● Finding improvement opportunities through predictions
● Providing intelligent, intuitive, and faster reports, dashboards
● Improving customer experience and employee satisfaction
● Giving trusted and governed data
● Increasing competitive advantage
Business Intelligence Real World Example
New York General Hospital (NYGH)
NYGH gets funding from the Ontario Ministry of Health and Long-term Care as a community hospital. In Ontario, one of the significant features of the funding model is the measurement of Quality-Based Procedure (QBP). The Business Intelligence team at NYGH has used IBM Cognos Analytics software to measure and report its QBPs, producing and providing reports for individual benchmarks such as cost per case, length of stay, and patient age.
Lowe’s Corp is the second-largest home improvement retail chain. It is one of the earliest companies that has adopted BI tools. It depends on BI tools to improve its supply chain, scrutinize products to identify frauds, and develop solutions for collective delivery charges from its stores.
Coca-Cola Bottling Company
Earlier, they faced a problem with their daily manual reporting processes because they restricted the availability of real-time sales and operations data. But by adopting the automated BI system and replacing the old manual process, the company conducted the process and brought off 260 hours a year. Now company’s team can swiftly analyze factors like delivery operations, budget, and profitability.
3 Well-known Business Intelligence Software:
Microsoft Power BI
Using the Power BI Desktop app, users can use the data to analyze and visualize them from local or cloud sources, establishing their report on the Power BI platform. It provides interactive dashboards, data preparation, visual-based discovery, and augmented analytics.
Oracle Analytics Cloud BI
Oracle gave self-service workforce analytics to analysts, HR executives, and line-of-business leaders by including the Cloud HCM offering in 2020. It has concentrated on designing it more instinctive and user-friendly with robust reporting and dashboards. It incorporates data preparation, data connectors, visualizations, and trends with conversational analytics.
IT projects a drag-and-drop interface to aid users to produce customized data visualization and creating personalized real-time dashboards. Its notable feature is that it helps edit digital credentials like passwords and replace physical ID cards.
Business Intelligence Vs Business Analytics
The word “Business Intelligence (BI)” is interchangeably used with the phrase “Business Analytics”. Business Analytics is narrowly used as advanced analytics or in the broad form; it combines both itself and Business Intelligence.
The primary distinction between business intelligence and business analytics focuses on when the incidents occur. BI focuses on the present and past incidents stored in the data, whereas Business Analytics focuses on what would most favorably happen. Both use the same data, but the itinerary for applying the results is different.
The second is that Business Intelligence is descriptive, built to inform you what has happened, what is happening now, and why. On the other hand, Business Analytics gives us predictive analysis. It shows patterns and trends in the data and studies whether similar things would happen in the future.
The third one depends on the end-users who avail of these tools. The accountants, marketers and managers who need descriptive analysis to decide on their business and have no technical knowledge use Business Intelligence tools. In contrast, Business Analytics is used by someone who has training in data analysis. The fourth one is on data visualization – where BI is simplified. The data is published into easy-to-read reports that all the users can interpret. But in BA reporting, an analysis of data takes a few more steps. The Data Application and Statistical Analysis are implied in BA.
Business Intelligence for Small, Medium Businesses & Start-ups
Analytics, data, and technology are crucial for sustainable growth in small and medium businesses and start-ups. There are a few elements to consider, like what kinds of data you need to analyze, the right technology to apply, and the best tools for small and medium businesses and start-ups.
But having all the answers can be impossible, especially when the budget is low, a specific number of employees. And these types of businesses should have the expertise to know how to use complex tools. With the help of the right tool and strategy, these types can use specific business intelligence tools to help them grow.
● Google Data Studio
Business intelligence allows companies to analyze data to make more educated decisions. BI is growing each year with more up-to-date technology. Various industries like the oil industry, insurance companies, and retail companies are adopting Business Intelligence for their company’s benefit. Choosing the right BI tool according to the requirement of your business is a decision worth taking. BI tools are powerful and provide modern capabilities. The optimum strategy often starts with a business intelligence program and then incorporates business analytics to make a forecast to improve efficiency and revenue generation.
Frequently Asked Questions
What is Power BI?
Power BI is a business analytics application authorized by Microsoft. According to the company, both individuals and businesses are permitted to connect to, model, and visualize data using a scalable platform.
What is self-service BI?
Self-service BI is one step forward to analytics that permits individuals without a technical degree to access and explore data. It gives access to the whole organization, not just the IT department.
What is the advantage of self-service BI?
It includes a false sense of security from end-users, high licensing cost, lack of data coarseness, and sometimes too much convenience of data.