What is Business Intelligence? BI Explained
"Business Intelligence" describes the methodology a business uses to transform raw data to into useful information to make decisions. The term specifically describes the computer-aided method of processing data for business applications. The processes of Business Intelligence, or "BI" for short, are always computer-based. They can be almost completely automated or simply computer-aided with the involvement of developers, analysts, managers and others.
What the Business Intelligence process essentially does is that it provides methods for identification, extraction, analysis and practical application of business data. With BI, data is gathered, standardized, organized and presented to users. BI simplifies how businesses use the mountains of raw information at hand. Business Intelligence techniques encompass a wide variety of areas such as data mining, analytics, event processing, performance management and benchmarking. Once processed, the data received through thorough BI analysis can be used to predict trends in business, evaluate current business processes, make informed decisions and analyze competitors' strategies and decisions.
What It Does
The Acronym MARCKM describes the steps and the overall goal of a BI system:
Measurement: this piece of the BI process gives managers the metrics to measure, benchmark and evaluate business performance. It provides the methods to compare a business' established goals with real-life performance statistics.
Analytics: this is where the bulk of BI's processing, including data mining, modeling and statistical analysis occurs. Here, data is processed by developers and their applications for informed decision making. Analytics refers to the process of standardizing data and organizing it for easier consumption. Reporting: data visualization occurs at this step, including generation of a reporting infrastructure for business management. The organized data is presented to users at the reporting phase.
Collaboration: here data sharing and data interchange occurs; business segments work together to share knowledge and process the results of the BI output. Collaboration is important because each business segment has its own important set of data. Only by comparison of their specific BI results can different departments get a true, global look at "the big picture".
Knowledge Management: this is the true, real-world application of Business Intelligence. At the knowledge management stage, data is actually applied to decision making and planning.
BI Technology: The Back End
The major players in the Business Intelligence industry include IBM Cognos, SAP, Oracle and many more. These companies provide the necessary hardware and software to process the vast amounts of data in BI systems. The data is received from end-users by a data warehouse. Here, the data goes through three separate layers:
Staging: developers gather the raw data, standardize it for easy comparison and prepare it for classification and analysis.
Integration: the raw data is classified, organized and catalogued for easier end-user access.
Access: the now user-friendly data is delivered to end-user applications.
BI Technology: The Front End
BI applications like Cognos 8 run on end-users' desktops, providing easy access to the information needed to predict trends, analyze current processes, determine performance metrics and more. The goal of any desktop-level Business Intelligence system is to present complex data in a usable way. The key to a successful BI application is usability; there is no value at all to BI if the end user finds it too hard to utilize in a meaningful way.
When a company takes on the task of developing a BI system, the end user's needs must be taken into account. This is known as the "requirements" step of the Business Intelligence development process. Matching a BI system's abilities with user need and usability is the only way to ensure continued use and acceptance of a BI system.
Business Intelligence is the process of taking all a business' raw data, organizing it and presenting it in such a way that business leaders can use the end product to make informed decisions. The backbone of a good BI system is usability. It doesn't matter how big the data warehouse is or how advanced your company's BI apps are; is the data generated by it isn't easy to use in practical ways, then the BI system is useless. Business Intelligence is a very powerful tool that businesses need in order to stay relevant and thrive. Knowledge is power, as the saying goes. There is no power at all when that knowledge is sitting in piles, confusing all who try to use it. BI takes this knowledge and makes it usable.