What is Business Intelligence and why is it important
Business intelligence (BI) uses technology to analyze data. It provides useful information for executives, managers, and workers. This helps them make informed business decisions. Organizations gather data from their IT systems and other sources to analyze it.
They then create visualizations, dashboards, and reports to share the results with business users for decision-making and planning.
BI projects aim to assist companies in making better decisions, increasing profits, improving operations, and surpassing competitors in the market. The main goal of BI projects is to help companies make smarter decisions.
Another objective is to boost profits and streamline operations. Ultimately, the aim is to outperform competitors in the market. To achieve that goal, BI incorporates a combination of analytics, data management and reporting tools, plus various methodologies for managing and analyzing data.
How does the business intelligence process work?
A business intelligence architecture includes more than just BI software. Business intelligence data is stored in a data warehouse for the entire organization or in smaller data marts for specific departments. The data marts are typically linked to the main enterprise data warehouse. These data marts are often connected to the main enterprise data warehouse.
Data lakes are commonly used for storing BI and analytics data. They can store log files, sensor data, text, and other unstructured data types. Hadoop and other big data systems are often used to create data lakes.
BI data includes historical and real-time information from source systems, helping BI tools with strategic and tactical decision-making. Before using raw data in BI applications, it must be combined, organized, and cleaned using data integration and quality management tools. This process ensures that BI teams and users are analyzing accurate and reliable information. This ensures that BI teams and users are analyzing correct and reliable information.
Why business intelligence is important
Fundamentally, the role of business intelligence is to improve a company's operations by leveraging relevant data. Companies that effectively use BI tools and strategies can transform their collected data into valuable insights about their business processes and strategies. These insights can then be used to make better business decisions that enhance productivity and revenue, leading to accelerated business growth and higher profits.
In the absence of Business Intelligence (BI), companies struggle to leverage data-centric decision-making. Consequently, business leaders and employees mainly rely on other elements like acquired knowledge, past experiences, intuition, and instinctive judgments for crucial business decisions. Although these techniques can lead to effective decisions, they also carry a high risk of mistakes and blunders due to the absence of data supporting them.
Benefits of business intelligence
A thriving BI initiative yields numerous corporate advantages within a company. For instance, BI allows top-level executives and department heads to continually track business performance, enabling them to respond promptly when problems or prospects emerge.
Examining client information aids in enhancing the efficiency of marketing, sales, and customer support initiatives. Obstacles in supply chain, production, and distribution can be identified prior to causing financial damage. HR executives can more effectively track employee efficiency, labor expenses, and other workforce-related data.
Overall, the key benefits that businesses can get from BI applications include the ability to:
- speed up and improve decision-making;
- optimize internal business processes;
- increase operational efficiency and productivity;
- spot business problems that need to be addressed;
- identify emerging business and market trends;
- develop stronger business strategies;
- drive higher sales and new revenues; and
- gain a competitive edge over rival companies.
Types of business intelligence tools and applications
Business intelligence amalgamates a wide range of data analysis tools intended to cater to diverse information requirements. The majority of these are backed by both self-service BI applications and conventional BI systems. The array of BI technologies accessible to businesses encompasses the following:
Ad hoc analysis. Ad hoc querying, also referred to as on-the-spot querying, is a fundamental component of contemporary BI applications and a crucial aspect of self-service BI tools. It involves the creation and execution of queries to examine particular business problems. Although ad hoc queries are usually generated spontaneously, they frequently become routine, with the analytical outcomes integrated into dashboards and reports.
Online analytical processing (OLAP). OLAP tools, among the initial Business Intelligence technologies, allow users to examine data across various dimensions, making them ideal for intricate queries and computations. Previously, data needed to be pulled from a data warehouse and kept in multidimensional OLAP cubes. However, it's becoming more common to conduct OLAP analyses straight on column-oriented databases.
Mobile BI. Mobile business intelligence enables the accessibility of BI applications and dashboards on handheld devices like smartphones and tablets. These tools are usually utilized more for data viewing rather than analysis, and are designed with a focus on user-friendliness. For instance, mobile dashboards might only showcase two or three data visualizations and KPIs for easy viewing on a device's display.
Real-time BI. In live BI applications, data is scrutinized as it's generated, gathered, and handled to provide users with a current perspective of business activities, customer habits, financial markets, and other relevant fields. The real-time analytics procedure frequently includes streaming data and aids decision analytics applications, like credit rating, stock exchange, and personalized marketing offers.
Operational intelligence (OI). Also known as operational BI, this is a type of real-time analytics that provides data to business operations managers and frontline employees. OI applications are created to assist in operational decision-making and facilitate quicker responses to problems - for instance, aiding call center representatives in solving customer issues and logistics managers in alleviating distribution blockages.
Software-as-a-service BI. BI tools based on SaaS utilize cloud-based systems provided by vendors to offer data analysis features to users as a service, usually charged on a subscription model. Also referred to as cloud BI, the SaaS alternative progressively provides support for multiple clouds, allowing businesses to implement BI applications on various cloud platforms to cater to user requirements and prevent vendor exclusivity.
Open source BI (OSBI). Open-source business intelligence software usually comes in two forms: a community edition that is available at no cost, and a commercially-released version that requires a subscription and includes vendor-provided technical support. BI teams can also utilize the source code for development purposes. Moreover, some providers of proprietary BI tools also offer complimentary editions, mainly for single users.
Embedded BI. Business intelligence tools that are embedded provide BI and data visualization capabilities straight into business software. This allows business users to examine data within the applications they utilize for their work. Typically, application software vendors integrate these embedded analytics features, but they can also be included in custom applications by corporate software developers.
Collaborative BI. This is less of a distinct technology and more of a procedure. It incorporates the fusion of BI software and cooperative tools to facilitate various users in collaborating on data examination and exchanging data with each other. For instance, users can mark up BI data and analytics outcomes with remarks, inquiries, and highlights through the utilization of online conversation and chat tools.
Location intelligence (LI). This is a unique type of BI that allows users to examine location and geospatial data, incorporating map-based data visualization features. Location intelligence provides understanding on geographical aspects in business data and operations. Possible applications include choosing locations for retail outlets and corporate buildings, location-centric marketing, and managing logistics.
Making the intelligent choice for your business
Every company requires BI. However, to ensure that all members of your company can access your data anytime and anywhere, it's crucial to select an intelligent, user-friendly, and feature-packed BI tool. This way, you can remain informed by maximizing the use of your data.
Frequently asked questions
What is business intelligence in simple terms
Business Intelligence (BI) refers to a collection of methods and tools utilized by companies for the purpose of examining business data and converting it into valuable insights. These insights aid in making strategic and tactical business choices.
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