What is Business Intelligence?


Need to make sense of the data your company generates? Want to understand more about where your company stands with regard to its operations, market, and industry? You could start getting printouts but first you need something that can collect the data that you need and something that can put it all together in a way that makes sense. Business intelligence, or BI, can take care of that.

Defining Business Intelligence

Business intelligence “as a discipline is made up of several related activities, including data mining, online analytical processing, querying and reporting,” explains CIO. “Companies use BI to improve decision making, cut costs and identify new business opportunities. BI is more than just corporate reporting and more than a set of tools to coax data out of enterprise systems.”

For example, business intelligence can be used to identify areas of the business that have grown inefficient. Companies such as Wendy’s and Ruby Tuesday use business intelligence software extensively to identify which locations are underperforming, which menu items could be removed, and which flavor profiles are most popular so they can create new dishes that employ these tastes.

Data Collection

Data collection is one of the challenges with BI. After all, your business intelligence is only ever going to be as good as the information you collect. Traditional data integration (DI) requires information that is in a common format, whether it comes from the CRM, billing or ERP, and this information then has to be accessible to data warehousing. Relational databases can then be formed, and BI can draw conclusions to develop complete views of customers, business entities, and even product lines.

The best BI systems go beyond traditional data sources like accounting and HR to incorporate structured data, such as information from machine sensors, with unstructured data, such as media files. It is a complicated process. “To unlock the most analytic value, organizations must be able to bring together information from across different departments, products, and applications – regardless of structure or format,” explains Pentaho. The best BI “provides data preparation capabilities for any data source, as well as the full range of capabilities to access, shape, and blend data for analytics.”

Data Preparation

This information can be incredibly useful, but collecting the right data in the right format is tricky and using the data you collect through BI to the best advantage is another story. “Once you have all this data in the data lake, how do you bring it all together? Transforming and reconciling data, ensuring consistency across sources, checking the quality of data — this is the hard part of the big data story and where there the least automation and help are available,” writes InfoWorld.

Data blending, for instance, only works when the data is in the same format. If there is a mismatch, you could end up with duplicate entries, which could throw off your data sets completely. Any BI collected from that information is useless until those issues are resolved. “If you need to build an application on top of a specific data source or to report on top of a consistent data set, many solutions exist that will automate the process and make it seamless,” continues InfoWorld. “But cross the boundaries of sources, explore and leverage heterogeneous data, this is where you are on your own.”

Business Intelligence vs. Analytics

Business intelligence is frequently confused with business analytics (BA). They are two pieces of trending terminology that sound similar and have some overlap in usage. However, they have different focuses. “Business Intelligence is needed to run the business while Business Analytics are needed to change the business,” explains Pat Roche, Vice President of Engineering, Noetix Products.

BI is focused more on “creating operational efficiency through access to real-time data enabling individuals to most effectively perform their job functions.” In contrast, “Business Analytics relates to the exploration of historical data… to identify trends and understand the information that can drive business change.” For example, in BI you may see a dashboard of real-time data, while BA produces data visualizations that display historical trends. Business analytics may also be seen as a subset of BI in the sense that analytics are a function you can perform on business intelligence.

Benefits of Business Intelligence

Business intelligence is something any smart business is highly invested in because the benefits to operations are so clear. Identifying inefficient functions and underperforming products is going to help a business be more profitable because resources are not wasted on less profitable functions. Moreover, BI presents a way to quantitatively measure business activities so it is objective in its conclusions, and it may spot opportunities that may not be apparent otherwise.

Take the New England Patriots for example. The sports team uses statistics to determine which players to hire and at which salaries. Statistics also provide insights into how to improve fan experience at games, and their use has served the Patriots well. Over the course of four years, the Patriots won the Super Bowl three times and improved visitor satisfaction.


Decision-making and cost-cutting are necessities of modern business, but they can’t take place in a vacuum. Before you can decide where to trim costs or which opportunities to harness, you need to be able to assess your current operations. BI helps you do this, and it streamlines the process so that reports are automatically generated and dashboards continuously updated.

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