Business intelligence is a technology-driven process designed to drive better decisions through collecting and analyzing data.
Business Intelligence has not changed in its goal since the 1800’s. Basically, the goal has always been to learn from our mistakes and not repeat them when possible. This seems like a simple task, and yet businesses miss goals by not looking at all of the information and correcting course as needed.
What is Business Intelligence?
Business intelligence (BI) leverages software and services to transform data into actionable insights that inform an organization’s strategic and tactical business decisions. BI tools access and analyze data sets and present analytical findings in reports, summaries, dashboards, graphs, charts, and maps, providing users with detailed intelligence about the state of the organization.
The term “business intelligence” often also refers to a range of tools that provide quick, easy-to-digest access to insights about an organization's current state, based on the available data. BI will also offer better results with data added on a more consistent basis and with automated methods where the viewer does not have to enter data to view current statistics.
Business intelligence does not tell business users what to do or what will happen if they take a certain course, nor is BI solely about generating reports. Rather, BI offers a way for people to examine data and understand trends, as well as derive insights. BI reduces the effort needed to search for, merge, and query the data necessary to make sound business decisions.
Business intelligence is, by definition, descriptive. It tells you what's happening now and what happened in the past to get us to that state.
Business analytics, on the other hand, is an umbrella term for data analysis techniques that are predictive — that is, they can tell you what's going to happen in the future — and prescriptive — meaning, it can tell you what you should be doing to create better outcomes. Business analytics are usually thought of as a tool to use to analyze data that's specifically focused on business workflows and reducing pain points to an organization.
How Business Intelligence Works
With most organizations, large goals are easier to define. Grow by X% next year, gain X more clients, X more products sold to hit the next pricing discount tier for this vendor, etc.
However, the incremental steps to reach these larger goals can often be harder to define or cost effectively measure. Converting your larger goals into SMART (Specific, Measureable, Actionable, Relevant, and Time-based) goals can start you on the path to seeing what can offer the best feedback to adjust your workflows and begin making improvements.
BI is a process where an organization collects data from numerous sources into one place, then, utilizes mathematical formulas based on internal best practices or previous wins to determine and find a benchmark of success to review current progress against.
Why Business Intelligence is Important
One of the main advantages of investing in a BI platform is the fact that it will boost your ability to analyze your current consumer buying trends. Once you understand what your consumers are buying, you can use this information to develop packages and systems that match the current consumption trends and, consequently, improve your profitability.
Improving visibility through your organization creates tools to easily identify areas for improvement. Whether it’s by knowing who your best performing employees are and how to get them to improve on each step, or identifying how stock becomes missing and determining where it’s going before the final invoice has been issued and that revenue is lost.