Business intelligence (BI) refers to the procedural and technical infrastructure that collects, stores, and analyzes the data produced by a company’s activities. BI is a broad term that encompasses data mining, process analysis, performance benchmarking, and descriptive analytics.
Business Intelligence
Business intelligence (BI) combines business analytics, data mining, data visualization, data tools and infrastructure, and best practices to help organizations to make more data-driven decisions. In practice, you know you’ve got modern business intelligence when you have a comprehensive view of your organization’s data and use that data to drive change, eliminate inefficiencies, and quickly adapt to market or supply changes.
Much more than a specific “thing,” business intelligence is rather an umbrella term that covers the 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.
- Data mining: Using databases, statistics and machine learning to uncover trends in large datasets.
- Reporting: Sharing data analysis to stakeholders so they can draw conclusions and make decisions.
- Performance metrics and benchmarking: Comparing current performance data to historical data to track performance against goals, typically using customized dashboards.
- Descriptive analytics: Using preliminary data analysis to find out what happened.
- Querying: Asking the data specific questions, BI pulling the answers from the datasets.
- Statistical analysis: Taking the results from descriptive analytics and further exploring the data using statistics such as how this trend happened and why.
- Data visualization: Turning data analysis into visual representations such as charts, graphs, and histograms to more easily consume data.
- Visual analysis: Exploring data through visual storytelling to communicate insights on the fly and stay in the flow of analysis.
- Data preparation: Compiling multiple data sources, identifying the dimensions and measurements, preparing it for data analysis.
Why is business intelligence important?
Business intelligence can help companies make better decisions by showing present and historical data within their business context. Analysts can leverage BI to provide performance and competitor benchmarks to make the organization run smoother and more efficiently.
A few ways that business intelligence can help companies make smarter, data-driven decisions:
- Identify ways to increase profit
- Analyze customer behavior
- Compare data with competitors
- Track performance
- Optimize operations
- Predict success
- Spot market trends
- Discover issues or problems
How business intelligence works
Businesses and organizations have questions and goals. To answer these questions and track performance against these goals, they gather the necessary data, analyze it, and determine which actions to take to reach their goals.
Many disparate industries have adopted BI ahead of the curve, including healthcare, information technology, and education. All organizations can use data to transform operations.
The future role of business intelligence
Business intelligence is continually evolving according to business needs and technology, so each year, we identify current trends to keep users up-to-date on innovations.
Realize that artificial intelligence and machine learning will continue to grow, and businesses can integrate the insights from AI into a broader BI strategy. As companies strive to be more data-driven, efforts to share data, and collaborate will increase. Data visualization will be even more essential to work together across teams and departments.
BI offers capabilities for near real-time sales tracking, allows users to discover insights into customer behavior, forecast profits, and more.