What is Business Intelligence?
Business intelligence is a continuous process of turning raw data into actionable insights that allow organizations to make informed business decisions. It includes collecting, storing, and analyzing data for processes like data mining, analysis, performance benchmarking, and data visualization.
BI doesn’t necessarily tell organizations what to do or what will happen. However, business intelligence allows organizations to identify trends and derive insights from past data. For example, if a company wants to improve their production and supply chain, they will need BI to analyze from past data, where delays are occurring, and which manufacturing unit is not performing optimally. This can be used to make informed business decisions to improve on those deficiencies and achieve operational efficiency.
Importance of Business intelligence
Business intelligence enable companies to make informed decisions by providing historical and present data of their business. Business Analysts can use BI to deduce crucial insights and leverage them to develop performance and competitor benchmarks. Instead of second guessing their next move, businesses can base their decisions on data-backed insights. Moreover, the insights can be used to make business processes smoother and more efficient to increase revenues. Business intelligence can help organizations make data-driven decisions by:
- Identifying ways to increase revenue by intelligently allocating resources.
- Analyzing consumer buying behaviour and purchase frequency and use the analysis to better target customers and customize business offerings.
- Comparing performance with competitors
- Tracking performance
- Identifying inefficiencies and problems
Business Intelligence VS Business Analytics
Business intelligence pertains mostly with descriptive analytics. BI leverages software to analyze data and collect information about the data itself. BI doesn’t provide any predictions based on the historical trends analyzed from the data. It tells us the story about what the data is saying and helps us understand it better.
Business analytics, however, is more about predictive analysis. It uses techniques and software to predict future sales or trends based on historical data and trends.
How Business Intelligence Works?
Firstly, the business needs to identify their goals and objectives for business intelligence. Consequently, organizations gather relevant data and feed it into their BI architecture for analysis to determine the way forward.
The majority of organizations rely on data warehouses as a source of data into their BI platforms. A data warehouse tool aggregates data from multiple sources into one single source of truth to support BI and reporting architecture. Raw data produced within the business is collected, processed, and stored in a data warehouse in a structured hierarchical format. Business analysts can then access any dataset easily and connect the data warehouse to their BI platform for analysis.
Some famous Business Intelligence tools include:
- SAP Business Objects
- Microsoft PowerBI
- Tableau
- Looker
- QilkSense
Data warehouse and Business Intelligence work in conjunction to visualize the data as dashboards containing charts, graphs, tables, etc.
Conclusion
Business Intelligence lies at the center of growth for every growing organization in this day & age. They are crucial for survival in this competitive business world and more importantly, providethe organization with the ability to outsmart its’ competition through data-driven business decisions.
