Business Intelligence 101: What It Is and What It's Used For
What is business intelligence?
Business intelligence (or “BI” for short) refers to the strategies and tools a company uses to collect, store, and analyze data to drive business decisions.
It’s a broad term that encompasses a business’s technical infrastructure for mining and processing business data.
Though business intelligence is often used interchangeably with the term business analytics, the two terms are not the same. BI focuses on historical data to perform descriptive analytics. Business analytics is an even broader term that encompasses descriptive as well as predictive analytics (making predictions about the future).
Benefits of business intelligence
So why care about business analytics at all? Well, without it, businesses make less informed decisions. Hence, business intelligence has become a core value across nearly every industry.
Here are some other benefits of investing in business intelligence:
- Quick analysis. BI allows for quick reporting with the help of dashboards that are easy to read and understand.
- Organizational efficiency. BI can provide a more holistic view of business operations and helps identify areas of opportunity.
- Improved customer experience. BI can leverage data to create better customer experiences, improving client acquisition and retention rates.
- Higher employee satisfaction. BI can boost employee productivity and happiness by providing everyone access to data.
- Competitive advantage. BI can help leaders monitor changing market conditions and anticipate changes so they can adapt business strategies.
- Better sales and marketing. BI can provide insights into sales and marketing performance, consumer behavior, and buyer trends to help drive more revenue.
- Improved inventory control. BI can help improve inventory management with enterprise asset management (EAM) software.
- Security and compliance. BI can make it easier to detect and protect against security issues and compliance risks.
Types of business intelligence features and tools
The most popular BI features are dashboards and data visualizations, but there are many others, including reporting and data mining.
Some common BI processes include extract-transform-load (ETL) and online analytical processing (OLAP).
As for technology, there are many BI tools out there: Domo, Dundas BI, Microsoft Power BI, Oracle Analytics Cloud, SAS, Tableau, Sisense, and more.
Ultimately, the point of BI features and tools is to increase the accuracy, timeliness, and amount of data that a business handles.
Four steps to acquiring business intelligence
Now that you have a basic understanding of what business intelligence is, here are the four main steps a company must follow to acquire it:
- Collect and transform data from multiple sources. This involves aggregating structured and unstructured data and organizing it into a manageable form.
- Uncover trends and inconsistencies. Through data mining (aka data discovery) processes, you can quickly discover big patterns and inconsistencies. From there, you can use exploratory, descriptive, statistical, and predictive analytics to further understand data patterns and trends.
- Use data visualization to present findings. This can include creating interactive data dashboards, charts, graphs, and maps. Anything that makes it easier for company leaders and stakeholders to understand the data.
- Take action on insights in real time. Quickly act on new insights to limit business inefficiencies and adapt to market shifts.
The bottom line
Peter Drucker once said, “you can’t improve what you don’t measure.” Business intelligence measures and interprets data so that you can improve your business. So if you don’t already, consider investing in BI tools and processes today!
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