And there’s another definition.BI is a discipline and a commodity — your company’s data is your business intelligence, to put it simply. But is all data business intelligence?

Business intelligence is timely, accurate, high-value and actionable information, and the tools and technologies to gather it.

• It must be timely — available on demand. Time is money, and nowhere is this more pertinent than in business.
• Business intelligence must be accurate. Erroneous or missed values could result in wrong decisions that hurt business.
• It should be business-critical. How many offices you changed in the past ten years isn’t essential, but how many stores you have on the East Coast matters.

Business intelligence gives information on your performance and operations — the two areas that impact your bottom line.

With the correct information, you can optimize spending by spotting business-critical campaigns that aren’t doing well. You can get accurate market intelligence if you plan to diversify.

Stay competitive

When some stores sell better than others, you want to replicate their success. Diving deeper into your operational data reveals these outlets have more female employees. Could it be a reason?

Netflix keeps you glued to your screen by consistently offering new viewing recommendations. The platform matches your preferences with new releases by tracking your viewing preferences.

It’s business intelligence at its best — influencing customer behavior to boost usage. And there’s Spotify. Need we say more?

• BI includes market intelligence that helps you understand the industry’s workings and what drives it.
• Aligning product development, marketing campaigns and sales strategies with prevailing trends keeps you competitive.
• Artificial intelligence (AI) and machine learning (ML) in modern BI tools help detect useful patterns in data and recommend future action.

Manage data

BI isn’t always about reporting and analytics. Sometimes, it’s about getting clear insight with simple tabular reports. BI tools make this information available by collecting it from your databases and data warehouses.

And there’s big data. It encompasses the various types and volumes of daily information businesses generate — spreadsheets, text documents, reports, videos, websites and usage data from equipment.

Modern BI tools have data management capabilities to handle vast, complex data volumes without impacting query performance. Additionally, they work seamlessly with distributed processing platforms like Apache Hadoop.

Make informed decisions

Decisions drive organizations — some impact the business directly, while others are limited to specific departments. Their timing is critical and, much like real life, can mean the difference between success and failure.

• BI tools provide up-to-the-minute information. Incorporating it into your decisions can make a sea of difference to your bottom line.
• BI supports customer analytics, which can help you move ahead of the competition by tapping into your users’ preferences.
• BI insight reveals trends, gaps and outliers to improve performance by identifying improvement areas.

It’s descriptive analytics, informing you about your business performance and market trends using existing and past data. What’s working and what’s not?

Should you alter your marketing plan? BI tools give you enough data to justify proposing a new plan to your stakeholders.

But BI isn’t limited to reporting existing data.

• With time, it evolved to support predictive analytics for forecasting business trends.
• Advanced analytics techniques like decision trees, neural networks and machine learning let you derive future courses of action.

Prescriptive analytics is the most valuable aspect of decision-making — confidently finding your way forward based on accurate, high-value data.

Is business intelligence the same as business analytics?

No, but the two are connected.

BI shows you the data as-is — the rest is based on it. Business analytics involves planning and suggesting operational improvements by analyzing BI data.

Many business analytics tools are in use in enterprises of all sizes. They’re usually software suites with various products under one brand name.

Standalone tools work great too. Many have an open architecture to integrate with other platforms that complement their capabilities.

Business intelligence is the umbrella category that includes business analytics, big data analytics, data mining, embedded analytics and enterprise reporting.

Read more in our Business Intelligence vs. Business Analytics article.

History of Business Intelligence

Storing information has been a human tendency since man painted on cave walls and the Sumerians tracked wheat stock in granaries on stone tablets.

• As information grew, storing more data in less space became a priority.
• Information storage evolved rapidly from magnetic tapes to disk drives to database management systems (DBMS).
• The need to optimize storage pushed the development of relational databases. They worked because splitting the information into smaller parts and separately storing it was economical.
• Businesses saw an opportunity to use this technology to manage and record transactions like sales, procurement, shipment tracking and customer billing.
• It was all fine, but senior stakeholders wanted to see this data. The problem was — it resided in disparate systems and was of different types.
• It drove the development of business intelligence or BI to extract the information housed in separate systems.

How It Supports Industry Verticals

Organizations use many different software types — ERP, CRM, marketing automation, inventory management, procurement and POS (point-of-sale). These systems incorporate data from various transactional and operational sources.

Knowing how they relate to business intelligence and BI systems is essential before a software implementation.

Data Warehousing and Business Intelligence

It’s a marriage made in heaven. Warehouses draw information from the above systems and standardize it for easy interpretation. BI systems help derive timely, accurate and valuable insight from this warehouse data.

ERP and Business Intelligence

• SAP is the founder of ERP systems that started with finance and accounting and expanded to include human resources and operations packages. It enabled a single company-wide view of data.
• ERPs came into their own at the turn of the century when the Y2K bug threatened to make legacy systems redundant.
• ERP companies offered software to replace these legacy systems, adding the latest features.
• As the demand for real-time updates grew, hard-coding reports became redundant. Users needed more dynamic solutions.
• ERP vendors started incorporating data warehouses into their product suites and added advanced reporting capabilities.

It signaled the advent of business intelligence in ERP.

CRM and Business Intelligence

Customer relationship management (CRM) manages a company’s prospects, leads and customers. It helps track leads and transactions and provides valuable customer insight for the sales team.

• Customer data affects all ERP product development, procurement, inventory, accounting and finance areas. It’s why ERP vendors incorporate CRM products into their suites.
• Tracking customer behavior got enterprises thinking about predicting customer behavior.
• Ecommerce increased customer touchpoints, giving companies more buyer information. Anticipating customer preferences could help them position themselves better in the market.

It drove vendors to merge core CRM capabilities with BI, reporting and analytics.

FAQs

How does business intelligence work?

• Business intelligence tools collect data by connecting to your organization’s database or warehouse.
• Data warehouses source the data from several transactional and operational systems.
• They cleanse and transform the data, applying data quality rules and converting it into a query-ready format.
• You can query this data on demand, put it into reports and visualizations and perform deep-dive analysis to drive business processes.

Which are some common business intelligence techniques?

• Big data integration involves gathering data from multiple software platforms, including cloud-based systems, that generate data for your business.
• Data preparation refers to getting the data ready for analysis by cleansing, correcting and transforming it to a standardized format.
• Data mining involves identifying useful patterns and trends in data by analyzing it.
• Benchmarking refers to comparing past and current performance and tracking how the business ranks against competitors.
• Data querying refers to retrieving data from a database or warehouse using a query language like SQL (structured query language).
• Data analysis covers what happened and why.
• Data visualization involves analysis through graphs, charts, tables, maps and text summaries.
• Reporting consists of viewing and sharing BI and analysis results with stakeholders.

Read our business intelligence techniques article to know more.

How is traditional business intelligence different from modern BI?

Conventional BI methods were IT-dependent and time-consuming. Data got outdated by the time it reached the right people.

Modern BI solutions have self-service capabilities and interactivity for independent data exploration.

Embedded BI gives you the required information within your business apps — no need to switch to a separate application.

Additionally, advanced calculations, augmented analytics and natural language querying differentiate modern BI from traditional methods.

Is it the same as data science?

No.

• Business intelligence presents historical and current information, while data science is exploratory.
• While business intelligence drives decisions, data science supports strategic planning.
• It involves diving into the metrics to spot outliers, trends and patterns to understand how your business performs and the market works.
• Data scientists rely on statistics, advanced programming and machine learning.
• BI deliverables include dashboards, ad hoc requests and reports, while data science helps run predictive models and what-if analyses.

Learn more with our Business Intelligence Features article.

How are business intelligence and big data related?

Big data refers to the vast volumes and varieties of data that organizations, machines and individuals generate daily. Business intelligence refers to using this information to grow your business and improve operations.

Read more in our article on BI vs. Big Data vs. Data Mining.

What is self-service BI?

Self-service BI is the capability to report on your organization’s metrics without coding.

Irrespective of whether you have programming skills, a solution that lets you explore and manipulate your data to perform the desired tasks is a self-service BI platform.

They hide the code behind easy interface actions like selections, drag-and-drop and point-and-click. Menu-based screens make navigation and data exploration effortless for all.

With the demand for faster turnarounds, giving more employees access to company data is a trade-off enterprises are willing to make. The result — software vendors offer more user autonomy in their offerings.

But, it also puts the onus on them to provide data security with watertight user management protocols.

Which industries use business intelligence software?

Telecommunications, automotive, financial services, manufacturing, media and entertainment industries use BI platforms. Ecommerce, software technology, healthcare, education, retail and government agencies are others.

Read more in our article on BI market insights.

How do I select a business intelligence system?

Your selection criteria are unique to your business, and a lot depends on your organization’s size.

• How much and what type of data do you collect?
• What are your deployment needs?
• Will data migration be involved if you switch to the cloud?
• Do you need a mobile app?

Our free requirements template can help you finalize this list.

Create a software comparison matrix of your preferred products to compare them feature by feature.

A four-tier scoring system gives you the product low down, ranking each requirement and feature on a scale of Zero to 100, with detailed summaries for every attribute.

Get the best-fit solution for your business by following our nine-step Lean Selection Methodology.

Reach out to us at support@selecthub.com or 855-850-3850.