Business intelligence (BI) is the process of turning raw data into actionable information that can improve business decisions. BI’s purpose is to help organizations understand themselves better so they can rise above their competitors.
If you search the term “business intelligence” online, you’ll see that it has a long history. The term first became popular in the 1960s referring to how teams shared information across organizations. It was all about processes. In the 1980s it evolved with the rise of the computer and began to refer to a specific product or service to help turn data into insights. Eventually, it came to be an umbrella term that stands for both processes and solutions — the process of transforming data into actionable insights and the tools that access and analyze data and present those findings in an accessible way.
Business intelligence is more than useful charts, graphs, and data summaries. It’s also understanding when data changes, why it changed, and what your organization needs to do about it.
Business intelligence or business analytics?
Though these two terms are similar, business intelligence and business analytics are not the same thing. Business intelligence relies on real-time and historical data. In essence, it tells organizations what’s happening and how things got to this point. Business analytics focuses on predicting what is going to happen in an organization in the future based on past trends and offering suggestions for things that could be done differently for improved outcomes. Business analytics can be a part of the business intelligence process.
Examples of business intelligence.
The evolution of business intelligence means that modern BI includes a variety of processes and tools. Here’s a small sampling:
Descriptive analytics. Analyzing data to find out what is happening right now.
Statistical analysis. Using results from descriptive analytics to determine why trends happen.
Querying. Using a BI tool to ask your data-specific questions and pull the answers.
Data preparation. Gathering data from multiple sources, identifying its characteristics, and preparing it for analysis.
Data mining. Using tools like machine learning to track trends in large data sets.
Benchmarking. Comparing performance data to historical data to determine whether or not teams or individuals are meeting goals.
Reporting. Sharing analysis with stakeholders.
Data visualization. Using visuals like charts and graphs to make data analysis results easier to understand.
Why is business intelligence important?
Organizations sit on huge amounts of data. Business intelligence helps organizations stay competitive by putting that data to good use. With BI, anyone can pull data insights and use them to inform decisions.
Businesses across industries that prioritize business intelligence experience significant return on investment (ROI) and improved performance. Those that don’t invest in business intelligence leave data unused and the decision-making process incomplete.
Benefits of business intelligence.
Most business intelligence tools feature a dashboard interface that makes insights available to any stakeholder, not just those with analytics backgrounds. This increased transparency and data access keeps teams on the same page and improves decision making from the ground up.
BI tools help organizations run more efficiently by identifying areas for optimization where outcomes are lagging behind competitors and discovering issues or problems that have been overlooked.
With insights gained from business intelligence, stakeholders can identify ways to increase profits by better analyzing customer behaviors and spotting market trends.
How does business intelligence work?
As organizations operate, they create raw data. That data is collected, processed, and stored as part of data integration. It could be stored in a data warehouse or directly within a tool like Domo. With the data consolidated in one repository, stakeholders can now initiate analysis to answer their business questions.
Simply put, every organization has goals, and every organization has questions — most about how to reach the goals. Business intelligence answers these questions by gathering data, analyzing it, and presenting the finding in an understandable way so that stakeholders can decide what steps they should take to meet their goals.
Traditional BI vs. Modern BI.
Traditional business intelligence tools were driven by IT departments and relied on static reporting. If a stakeholder had a follow-up question about the report they received from IT, they would have to initiate an entirely new data request. This process was slow and frustrating.
Modern BI tools are designed for interactivity and accessibility. Stakeholders can customize dashboards and create automated reports that give them the insights they need without having to go through IT.
Domo’s modern BI puts the power of data into more people’s hands throughout your organization, taking just minutes or even seconds to get the information they need. It also helps unlock dark data — data that has been inaccessible in the past. And, data governance is simple as administrators control who can access what data. Remember, modern business intelligence modernizes your business and helps you rise above your competition.
What tools do I need for better business intelligence?
There are many types of business intelligence tools available to organizations today. Some of these tools focus on one specific area of the business intelligence process, while others present a more holistic, end-to-end solution. Here are a few of the most popular types of business intelligence tools.
Online analytical processing (OLAP). Computing that handles multi-dimensional analytical queries.
Data visualization software. Provides visual representation of patterns and correlations.
Location intelligence (LI). Brings together business data and geographic context.
ETL tools. Gathers data into one location and prepares it for analysis.
Ad hoc analytics. Answers specific analysis questions on the spot.
Mobile BI. Optimizes desktop BI for mobile devices.
Real-time BI. Delivers real-time information to stakeholders.
Software-as-a-service BI (SaaS BI). A cloud-hosted, subscription-based delivery model for BI solutions.
Open source BI (OSBI). BI software that doesn’t require a software license purchase.
Operational BI. Integrates real-time data into an operational system so it can be used immediately.
Collaborative BI. Brings BI software together with collaboration tools for seamless sharing.
Choosing business intelligence tools.
Your business intelligence solution should do more than make pretty charts and graphs. It should interact with the entire business intelligence process from raw data to acting on insights. You should be able to see the data and act on it within the BI software itself, instead of moving to another system before you can get started. And remember, your BI tool is only as good as your data.
How do different industries use business intelligence?
Every industry benefits from business intelligence. There are countless areas where BI solutions or capabilities could come into play. BI tools have proven especially useful during times of crisis in helping organizations identify problems and solutions and then quickly implement those solutions. Here are a few examples of how different industries use BI.
Identifying where delays happen most frequently and where glitches exist in the shipping process
Discovering which products often face delays or which form of transportation is delayed the most
Sales and Marketing
Tracking new client acquisition and retention
Generating sales and delivery reports from CRMs
Illustrating where prospective clients are on the sales pipeline
Examining data on attendance rates and pass rates
Analyzing and tracking student performance
Viewing data from multiple branches or offices together in one place
Predicting trends and how they will affect clients
Improving operational efficiency to reduce overspending
Streamlining the insurance claims process to optimize patient billing
How will business intelligence evolve in the future?
Business intelligence platforms will continue to offer more and more customization for organizations. Instead of opening up a company-wide dashboard, stakeholders will be able to access a custom app built specifically for their department. This approach will help streamline and automate workflows.
Also, the move toward self-service BI will give more individuals the ability to access information without involving the IT department. Modern BI will enable organizations to go beyond accessing data and move to actually take action on the data insights they see, whether that’s through custom apps where users can access and act in the same interface or through automating actions in other business systems.
We’ll also see better ways to share BI beyond its original organization. Domo customers can share BI within their organization as well as with customers or partners by embedding visualizations in their own app or website or by letting customers upload and combine data.
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