What is Business Intelligence?
Business intelligence (BI) is a set of theories, methodologies, architectures, and technologies that transform raw data into meaningful and useful information for business purposes. BI can handle enormous amounts of unstructured data to help identify, develop and otherwise create new opportunities. BI, in simple words, makes interpreting voluminous data friendly. Making use of new opportunities and implementing an effective strategy can provide a competitive market advantage and long-term stability.
What is the difference between business intelligence and data warehousing?
Often BI applications use data gathered from a data warehouse. A data warehouse is a copy of data that facilitates decision support. Not all business intelligence applications require a data warehouse but it can be a really powerful start to gain maturity in the developing a company’s BI. Before the data enters the data warehouse it is may be corrected, cleaned, standardised and summarised.
Data warehouses are often built using specialised technologies such as Online Analytical Processing (OLAP).
Many practitioners, including JTA, like to separate the disciplines of information management and Business Intelligence. The design and building of data warehouses is part of information management.
Who uses Business Intelligence?
The simple answer is that BI should be used by any member of staff that makes a decision. It is a mistake to think that BI tools are aimed solely at senior management making strategic decisions. It could be just as powerful to give a warehouse manager a BI tool that helps to restock correctly in advance of a sales promotion.
A particularly powerful approach is to design a tool that measures a certain business objective and to enable this tool at all levels of the business. For example a branch manager could use a dashboard to measure their branch’s customer satisfaction. The area manager can use the same tool to see satisfaction levels for the entire region and at the same time the CEO who manages the subsidiary for the entire country can monitor results for the whole organisation.
Does the introduction of Business Intelligence require new computer systems?
Absolutely not. BI technologies are designed to interface with existing systems of all types. The data warehouse will often link to many legacy systems to provide one standard store of data that is then analysed using BI visualisations.
Is it necessary to buy new software?
For most business it is not necessary to buy new software. It is highly likely that existing systems have been built around a database for which a license has been obtained. This database could be extended to take care of the BI needs of the company. There are also some open source solutions available.
For a large scale project it may be beneficial to buy new software but the return on this investment is typically very high due to the increased efficiency that a BI enabled business has.
Are BI solutions expensive?
Obviously BI solutions come in all sizes and a large scale implementation can involve a significant spend. This is not the norm. Most BI projects are low cost and, more importantly, they offer a significant return on investment. As part of preparing to plan a BI implementation we always attempt to quantify the ROI or repayment period of the project in a business plan.
The Return on investment may come from many different sources: It maybe that you gain an insight on stock levels and hold less stock; you might anticipate a surge in demand and streamline customer fulfilment and gain satisfaction scores; you may be able to identify sales opportunities for existing customers; you may analyse debt profiles and improve cash flow. The possibilities are endless.