What Is Business Intelligence (BI)?Business intelligence (BI) refers to the procedural and technical infrastructure that collects, stores, and analyzes the data produced by a company’s activities. Show
BI is a broad term that encompasses data mining, process analysis, performance benchmarking, and descriptive analytics. BI parses all the data generated by a business and presents easy-to-digest reports, performance measures, and trends that inform management decisions. Key Takeaways
Understanding Business Intelligence (BI)The need for BI was derived from the concept that managers with inaccurate or incomplete information will tend, on average, to make worse decisions than if they had better information. Creators of financial models recognize this as “garbage in, garbage out.” BI attempts to solve this problem by analyzing current data that is ideally presented on a dashboard of quick metrics designed to support better decisions. Most companies can benefit from incorporating BI solutions; managers with inaccurate or incomplete information will tend, on average, to make worse decisions than if they had better information. Special ConsiderationsTo be useful, BI must seek to increase the accuracy, timeliness, and amount of data. These requirements mean finding more ways to capture information that is not already being recorded, checking the information for errors, and structuring the information in a way that makes broad analysis possible. In practice, however, companies have data that is unstructured or in diverse formats that do not make for easy collection and analysis. Software firms thus provide business intelligence solutions to optimize the information gleaned from data. These are enterprise-level software applications designed to unify a company’s data and analytics. Although software solutions continue to evolve and are becoming increasingly sophisticated, data scientists still need to manage the trade-offs between speed and the depth of reporting. Some of the insights emerging from big data have companies scrambling to capture everything, but data analysts can usually filter out sources to find a selection of data points that can represent the health of a process or business area as a whole. This can reduce the need to capture and reformat everything for analysis, saving analytical time and increasing the reporting speed. Types of BI Tools and SoftwareBI tools and software come in a wide variety of forms. Let's take a quick look at some common types of BI solutions.
Benefits of Business IntelligenceThere are many reasons why companies adopt BI. Many use it to support functions as diverse as hiring, compliance, production, and marketing. BI is a core business value; it is difficult to find a business area that does not benefit from better information to work with. Some of the many benefits companies can experience after adopting BI into their business models include faster, more accurate reporting and analysis, improved data quality, better employee satisfaction, reduced costs, and increased revenues, and the ability to make better business decisions. BI was derived to help businesses avoid the problem of "garbage in and garbage out," resulting from inaccurate or insufficient data analysis. If, for example, you are in charge of production schedules for several beverage factories and sales are showing strong month-over-month growth in a particular region, you can approve extra shifts in near real-time to ensure your factories can meet demand. Similarly, you can quickly idle down that same production if a cooler than normal summer starts impacting sales. This manipulation of production is a limited example of how BI can increase profits and reduce costs when used properly. Examples of BILowe's CorpLowe's Corp, which operates the nation's second-largest home improvement retail chain, is one of the earliest big-box adopters of BI tools. Specifically, it has leaned on BI tools to optimize its supply chain, analyze products to identify potential fraud, and solve problems with collective delivery charges from its stores. Coca-Cola Bottling CompanyCoca-Cola Bottling had a problem with its daily manual reporting processes: they restricted access to real-time sales and operations data. But by replacing the manual process with an automated BI system, the company completely streamlined the process and saved 260 hours a year (or more than six 40-hour work weeks). Now, the company's team can quickly analyze metrics like delivery operations, budget, and profitability with just a few clicks. BI FAQsWhat Is Power BI?Power BI is a business analytics product offered by software giant Microsoft. According to the company, it allows both individuals and businesses to connect to, model, and visualize data using a scalable platform. What Is Self-Service BI?Self-service BI is an approach to analytics that allows individuals without a technical background to access and explore data. In other words, it gives people throughout the organization, not just those in the IT department, to have control over the data. What Are Disadvantages of Self-Service BI?Drawbacks to self-service BI include a false sense of security in end-users, high licensing costs, a lack of data granularity, and sometimes too much accessibility. What Is IBM's BI Product?One of IBM's main BI products is its Cognos Analytics tool, which the company touts as an all-inclusive, AI-powered BI solution. What are the fundamental categories of business intelligence BI analysis?Categories of BI analysis
There are three major types of BI analysis, which cover many different needs and uses. These are predictive analytics, descriptive analytics, and prescriptive analytics. Predictive analytics takes historical and real-time data and models future outcomes for planning purposes.
What is the most fundamental use of business intelligence?The entire purpose of Business Intelligence is to support and facilitate better business decisions. BI allows organizations access to information that is critical to the success of multiple areas including sales, finance, marketing, and a multitude of other areas and departments.
What is business intelligence Fundamentals?Business Intelligence (BI) combines business analytics, data mining, data visualization, and infrastructure, and the best practices to help organizations make more data-driven decisions.
What are the four categories of BI business models?Business Intelligence is generally divided into four different categories which are comprised of different types of BI that businesses working with data should be aware of.. Reporting. Reporting focuses on developing documents with valuable information, telling the reader what happened. ... . Analysis. ... . Monitoring. ... . Prediction.. |