Business Intelligence (BI)

Last Updated April 16, 2024 6:16 am

Business intelligence (BI) refers to the tools, systems, and strategies that create analysis and planning processes within a corporation. Comprehensive BI systems allow a company to gather, store, access, and analyze corporate data to aid in decision-making. These decisions include:

Changing company e-commerce strategies due to sales trends and customer clicks
Sending new sets of emails to prospective customers and leads
Restructuring website design
Designing SEO strategies to optimize web traffic
Purchasing new software because an old application wasn’t helping the company
Hiring a new employee because data revealed that there was a skills gap in one department

Because it incorporates data from across the enterprise—revenue operations, sales, supply chain, logistics—business intelligence insight is beneficial in areas like:

customer profiling
customer support
market research
market segmentation
product profitability
statistical analysis
inventory and distribution analysis.

What does business intelligence do?

Business intelligence and BI software:

Store data in locations like connected databases, data lakes, and data warehouses so that it can be organized and queried
Collect logs of live data from company applications and devices
Analyze large sets of data about customers, products, supply chains, physical premises, etc
Provide insight based on data sets and statistics so that businesses can make changes to systems and processes.

Data used for business intelligence can come from any business resources:

Company-owned devices
Supply chain processes
Company vehicles
On-premises sensors
Collaboration software
Customer management systems
Emails

Also Read: Power BI vs. Tableau: A Data Analytics Duel

Careers in Business Intelligence

Business intelligence and related business technologies are a growing career field. For example, the job market for operations research analysts is expected to increase 25 percent between 2020 and 2030, according to the Bureau of Labor Statistics. Some of these skills include:

SQL, Python, and/or C/C++ programming language proficiency
Database management
Survey design
Problem solving
Trend analysis
Data modeling/visualization
Business acumen
Communication and collaboration

What are the components of business intelligence?

Business intelligence software is designed to extract important information from an organization’s raw data to reveal insights that will help a business make faster and more accurate decisions. BI software integrates data from across the enterprise and provides end-users with self-service reporting and analysis.

The core components of a BI strategy include online analytical processing (OLAP), corporate performance management (CPM), data warehousing, data mining, and real-time reporting.

OLAP: Based on the OLAP cube, a data structure optimized for quick data analysis. This enables four types of multidimensional data analysis: drill down, roll up, slice-and-dice, and pivot. These analyses are done very quickly on a large volume of data and provide a foundation for complex calculations, trend analysis, and data modeling.
Performance management tools: plans, often driven by software, for taking the focused data for different parts of a business and aggregating it into an operational plan. They’re helpful for a variety of situations, including budget forecasting, supply chain management, and risk management among others.
Data warehouse: Not to be mistaken with a database, a warehouse aggregates data from numerous sources for comparative analytics. Data warehousing allows business leaders to examine data from multiple applications or systems within the organization and understand how they are related.
Data mining: The process of uncovering patterns and unseen relationships across large sets of information. It uses a combination of statistics, artificial intelligence, and machine learning to determine what is most important from dense, repetitive data.
Real-time reporting capabilities: real-time reporting in business intelligence software helps an organization make a decision using live data. This is especially useful in marketing scenarios where a last-minute campaign or slight shift can have a dramatic impact on sales.

Features of business intelligence tools

To visualize information, BI tools allow users to:

View all data from a unified user interface
Create reports that they can bring to executive teams within the organization
Design dashboards for calculating metrics and viewing charts
Connect other applications to the business intelligence platform for increased organizational collaboration

Business Intelligence vs Business Analytics

BI and business analytics solutions include very similar features, like data collection, analyzing, and reporting; but their end goals are slightly different. Business analytics focuses on forecasting, predicting, and notifying and includes features like decision trees to help companies make choices based on data.

Business Intelligence	Business Analytics
Descriptive	Predictive, prescriptive
Focused on what’s happening now and what happened in the past	Focused on what’s going to happen in the future and what should be done for better outcomes
Data for business managers to analyze	Data for decision makers to study and then make business changes
Non-technical for end users	Technical; often analyzed by experienced data scientists

BI Example: a pharmaceutical company uses sales trends from the past five years and existing customer data to see what medicines have been selling best and how sales have changed over the years.

BA example: a pharmaceutical company uses customer data, sales from the past five years, and current medical marketing data to predict where next quarter’s sales should be and plan their budgets accordingly.