If you work in the field of business, at some point you’ve probably heard the term Business Intelligence or BI. But what does BI really mean and how is it relevant to the success of your business?
In the most simple of terms, BI is defined as the methods and technologies used by an organization to gather, store, report and analyze data so they are better able to make important decisions.
Business Intelligence is used to make a variety of business decisions, ranging from:
- Determining where to cut costs
- Analyzing performance to help improve processes
- Identifying new business opportunities & analyzing the risk of these new opportunities
- Tracking the performance of campaigns, sales, customer behaviors and buying habits
- Tracking financial performance to help budget and plan for the future
- Measuring web and ecommerce analytics to track performance and improve customer relationships
As mentioned above, there are four components to the process of BI. Each component works to deliver all the necessary information an organization needs to ensure it is performing at its top “intelligence” in the marketplace.
- Collecting Data – In this part of the process important data is gathered which will later be used to assist in making better business decisions. In today’s high tech world, data collection is usually an automated process done through software applications. These applications allow an organization to track and collect the most essential data for their business, i.e. web site traffic or point-of-sale transactions.
- Storing Data – Another important part of the BI equation involves determining the best way to store the data collected so that it can be analyzed. The more logical the storage, the easier it is to use the data. Again, software applications are used in this process as well. The software can be programmed to collect and catalogue the data into multiple data warehouses, which allows different departments at an organization easier access to information their department needs.
- Analyzing Data – In this segment of the BI process, the data that has been stored and gathered is used to provide insight into how a business is performing and where improvements can be made. The analysis can be processed in quantitative and qualitative formats. These formats usually include the utilization of statistical and visual analysis, as well as data-mining.
- Providing Access – This might seem like a small part of process, but without making it easy for people in an organization to have access to both the data and the analysis of the data, BI falls short of its “intelligence.” As in all the components of BI, software applications provide easy access to the reports and analysis that have been generated, thus allowing better business decisions to actually be executed.
BI is usually incorporated into the IT department of most companies, where implementation of the software can be properly overseen. While understanding what Business Intelligence is and which department is better prepared to properly execute it is essential, it is also important to remember that BI is more than just software applications. At its center, BI is designed to provide key insights for making better business decisions across all departments of an organization, and not just function as another software system run by IT. In the case of CE programs, the process of BI most likely falls with the staff running the day to day business.