What is Business Intelligence? An Overview

The term business intelligence (BI) refers to a set of strategies and technologies that businesses use to analyze information and convert it into insights to help them make tactical decisions. Providing users with detailed intel about the state of the business, a range of BI tools can provide quick and easy-to-digest access to details about an organization’s current state based on historical and current data. The information can then be used and presented in the form of dashboards, charts and graphs, reports and summaries. Much of this work is done by a business intelligence analyst.

What is a business intelligence analyst? BI analysts collect and assess data to help companies better achieve their goals. Their duties and responsibilities include reviewing and analyzing data to identify areas where their companies can improve efficiency, productivity, customer experience and satisfaction, and other crucial business characteristics.  Regular duties associated with this role include a variety of data collection, analysis and measurement tasks:

• Developing policies and procedures for collection and analysis of data

• Reviewing competitor data and analyzing how competitors respond

• Identifying opportunities for improvement in business strategies and processes

• Reviewing and managing analytics and metrics results

• Presenting data information and solutions to executive leadership via reports and presentations

We can’t completely answer “what is business intelligence” without examining its benefits. Business intelligence has the potential to improve business processes and performance in areas like customer experience, sales and marketing, inventory control, security and compliance, operations and finance. Additional benefits include: 

By automating many of the processes that were previously done manually, BI tools save companies time and effort. Business intelligence follows 4 key steps to transform raw data into the actionable and easy-to-digest insights that are so beneficial to organizations: Data collection, analysis, visualization and decision making.

BI tools typically use a methodology called extract, transform and load (ETL) to collect structured and unstructured data from multiple sources. This data is transformed, remodeled and stored in a central location that is accessible for applications to analyze and query the information as a single data set.

In the data mining or data discovery step, the discovery process typically uses automation to analyze the data quickly to find patterns and anomalies and provide insight into current business conditions. BI tools will often feature several types of data modeling and analytics, including exploratory, descriptive, statistical and predictive, that further explore the data, predict trends and make recommendations.

Data visualizations such as interactive data dashboards, charts, graphs and maps make BI’s findings easier to understand and share. These visualizations help users see what’s going on the business at the moment.

BI enables real-time adjustments and long-term changes that can remove inefficiencies, adapt to changing market conditions, correct supply chain issues and solve customer concerns. By viewing current and historic data in context with various business activities, enterprises gain the agility to shift from insights to actions. 

At this point in our discussion you may be asking a new question: How is business intelligence different from business analytics? While they are similar and the terms are often used interchangeably, BI should be considered a subcategory of business analytics. While BI studies historic data to uncover trends and provide decision-making guidance, business analytics looks forward, making predictions based on data mining, data modeling and machine learning. 

Where BI is descriptive, providing a picture of what’s happened before and what’s happening now to shape the current state of a business, the predictive nature of business analytics allows it to help leaders get a sense of what’s likely to happen in the future and prescribe solutions to improve outcomes.  

Another distinction lies in the nature of the information provided by each methodology. While BI provides easy-to-understand snapshots of a business’s current state of affairs for use by non-technical managers, the predictions and advice provided by business analytics require analysis and interpretation by data scientists.

A glance at the trends and innovations leading the future of BI paints an intriguing picture of the technology’s potential to make an impact in several areas:

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