In order to be successful, managers must make important business decisions faster and more carefully than ever before. However, with the right strategies and tools and on the basis of exact data, this can be done very easily thanks to Business Intelligence. But what exactly is BI, what are the advantages, and how do companies find the right BI solutions?
Business Intelligence (BI) refers to processes, technologies, knowledge, and applications that are used to make well-founded, data-driven business decisions. BI includes data collection, data aggregation and analysis, and meaningful presentation for effective decision-making.
Data-driven organizations use different BI tools to access historical data and real-time information in a data repository. These are used to carry out queries, create individual reports, and predict future developments. The tools include advanced analyzes performed by trained data scientists as well as insights generated independently by machine learning algorithms. Data repositories for BI applications include data warehouses (centralized or decentralized), production databases, operational data stores, and data marts. In data analysis, however, data sets are analyzed in order to gain knowledge from them. There are two types of data analysis:
- Predictive Analysis: This involves analyzing historical data to determine the most likely outcome.
- Prescriptive Analysis: This involves running hypothetical scenarios to determine the most likely outcome of a particular action.
Data analysis is an essential part of BI and BA, but only part of the overall system. BA is a similar but separate process with a different function. It collects historical data on trends and insights to drive business change. BI, on the other hand, uses historical data and real-time information to support current decision-making: that is, to evaluate what works and what does not and then to decide on the best course of action. While BI primarily supports current business decisions, BA is mainly used for future prognoses.
What Are The Functions Of Business Intelligence?
Business Intelligence (BI) comes in the aim of which is to support decision-making in companies. Although Business Intelligence (BI) has now established itself on the market, there are still different views as to how the term should be interpreted. The first definition for BI is a process that transforms data into information and this in turn through the application of experience into knowledge. This classic approach consequently includes all processes and systems with which market, competition, and company data can be systematically analyzed. Another definition describes the BI from an IT-based and company-specific point of view. According to this definition, BI means the decision-oriented collection, processing, and presentation of business-relevant information. A dashboard is generally used for data visualization. The following aspects are included in this definition:
- Decision-making
- Collection of data using data mining methods
- Preparation of data
- Presentation of business-relevant information
The aim of Business Intelligence is to generate economic knowledge about the current status and future perspectives of both your own company and the respective business environment.
Business Intelligence In A Wide Range Of Companies
In the meantime, BI is used not only by large companies but increasingly also by medium-sized companies. BI simplifies the application significantly. Self-Service BI enables users without any knowledge of statistics to analyze the data obtained. With self-service BI, simple inquiries are sufficient to carry out analyzes.
As an analytical information system, BI is based on the operational company systems. The area of application of a BI system extends across the entire management level and reaches upper, middle, and lower management. In general, the support provided by the BI system is based on Online Analytical Processing (OLAP). This makes the data immediately available for reporting. Since several dimensions are displayed simultaneously using an OLAP cube, they can also be combined with one another for analysis.
The use of business intelligence for decision support is not a one-time project, but an ongoing cycle, which consists of several phases. During the first phase, the collected data is quantified and qualified. This means that the data quality of the data is recorded and the data is then analyzed using mathematical methods. The results of the analysis are then used to derive insights that support the business processes. The next phase is concerned with evaluating these findings. The assessment is based on the company’s objectives. In the last phase, the findings are implemented in concrete measures. These conversions in turn provide the input information for the next BI cycle.
Business Intelligence Tools: 7 Key Features and Functions
Efficient business intelligence requires the right tools. There are several types of BI tools designed for different parts of the overall BI process and based on different standards. These tools can be used on their own or as part of an integrated product suite.
- Online Analytical Processing (OLAP): BI tools that are used to analyze large amounts of historical data with a drill-down function. The information obtained is stored in OLAP cubes – i.e. with a multidimensional view of the data – and made accessibly.
- Reporting: BI tools that visually present data such as charts, maps, and graphs extracted from a query. The benefits of BI reporting tools include the speed, efficiency, and accuracy of reports.
- Advanced Analytics: BI tools used by data scientists in building predictive and prescriptive analytical models.
- Operational BI: BI tools that process incoming files in real-time and thus ensure high visibility and transparency as well as faster access to information for decision-making. With real-time data and insights, a company can react quickly to market trends and events.
- Open-source BI: BI tools that were developed with open source code can be adapted as required. These tools usually come as a suite of products with built-in reporting and analysis functions.
- Self-service BI: BI tools that do not require training in statistical analysis or data mining. Self-service systems are configured so that users can query, generate reports, and gain valuable insights using interactive dashboards.
Why Is Business Intelligence So Important?
Modern business decisions are playing an increasingly important role due to the increasing accessibility of big data, but they are also increasingly difficult to make. An enterprise data warehouse often contains a terabyte or more raw data that needs to be processed and prepared for analysis. BI systems enable comprehensive data analysis, often within a few minutes, in order to react to specific business requirements. The advantages of BI at a glance:
- Faster response time: In-memory analyzes with cloud-based data warehouse solutions can analyze data in real-time and thus provide fact-based information in minutes.
- Better business decisions: BI extracts facts and transforms data into meaningful and reliable information.
- Improved operational efficiency: BI makes the change relationships between different components of the business are more transparent. This allows problems and inefficiencies to be identified and addressed more quickly.
- Higher ROI: BI helps to identify the resources required to achieve set goals, increase productivity through accelerated data analysis, and to develop new sources of income.
- Faster Reporting: BI enables real-time reports with up-to-the-minute, accurate data sets that give you a competitive edge in solving complex business problems.
- Precise Strategies: BI helps identify key data trends and patterns. This is a great way to prioritize and allocate resources to get the results you want.
- Satisfied Customers: BI provides data on KPIs that improve key business functions (product or service optimization, faster time to market), resulting in a higher customer satisfaction rating.
