Business intelligence, also known as BI, is concerned with the use of services and software to transform data into business insights that can be acted on to inform your strategic and tactical business decisions. BI tools can be used to access and analyse data sets to present analytical information in charts, dashboards, graphs, reports and summaries which can be used to present insights into the state of your business.
The term business intelligence is sometimes used to refer to a set of tools that provide users with speedy access to insights about the business based on the currently available data.
Examples of business intelligence
One of the critical parts of business intelligence is reporting, so the dashboard is perhaps the most recognisable BI tool for most people. A dashboard is a hosted software application that automatically pulls together all of the data available into a chart that gives an idea of the current state of the business.
Business intelligence is not just about creating reports; it also cannot tell business owners what to do or what will happen if they make a certain decision. Instead, BI offers business owners a way of examining their available data to derive insights and understand trends by streamlining all associated tasks – such as searching for the data, merging it, and querying it.
Business analytics vs business intelligence
So, business intelligence gives you an insight into the current state of the business, such as where our sales prospects are in the pipeline today and how many customers we have gained or lost this month. This leads us to the key distinction between business analytics and business intelligence.
Business intelligence is a descriptive strategy that tells us what is happening now and what has happened in the past to get us there. On the other hand, business analytics is a term used to describe predictive data analysis techniques – what is happening in the future – and prescriptive – they can tell you what you should be doing to create better outcomes.
This distinction between BI and business analytics gets to the heart of the question of who business intelligence is for. BI should be used to deliver snapshots of your business’s current state of affairs to your business managers. While business analytics requires data scientists to analyse and interpret the data, one of the main BI goals is to make the data easy for everyone to understand.
What makes a good business intelligence strategy?
IT professionals have traditionally used BI applications, but as they have evolved and become more user-friendly and intuitive, it has enabled a wider range of users to get involved.
Gartner has identified two types of BI:
- Classic BI – IT professionals use in-house transactional data to generate reports
- Modern BI – business users interact with agile systems to analyse data more efficiently
Many businesses automatically opt for classic BI for certain types of reports, such as financial or regulatory reports, as accuracy is key, and the data sets and questions used tend to be predictable. Modern BI tends to be used where a business needs insight into dynamics that are quickly changing, such as marketing events – where the speed of response is prized more highly than data that is 100% correct.
However, even though solid business intelligence is critical to making the right strategic business decisions, many businesses struggle to implement effective BI strategies due to tactical mistakes and poor data practices.
The key to self-service business intelligence
The mission to make it possible for anyone to get useful information from BI tools has led to the development of self-service business intelligence, a category of BI tools aimed at removing the need for your IT department to assist in generating reports.
The key to success with self-service BI is using dashboards and user interfaces that include menus and drill-down reports allowing users to find the data and transform it in easy-to-understand ways.
There are disadvantages to self-service BI as well, in that you could end up with a mix of metrics across departments, run up large SaaS bills, or even run into data security issues.
Business intelligence analysts
Any business serious about BI needs business intelligence analysts on their payroll. These analysts can use all of the features of BI tools to get the data that businesses need – such as identifying where improvements can be made to increase profits or save the company money and discovering areas of revenue loss.
Even if you rely heavily on self-service BI tools, business intelligence analysts have an important role in managing and maintaining these tolls and their vendors. They can also set up and standardize the reports your business managers need to ensure consistent and meaningful results across your business.
The future of business intelligence
Machine learning will have a disruptive impact on business intelligence as augmented analytics will be added to the software to guide users on their queries into the available data. So, if someone looks at reports from last year’s sales, they will also get predictions about next year’s sales and add a “what-if” capability. This enables BI systems to make more recommendations of a higher value and enables business owners to make more accurate, efficient and powerful decisions.