Anyone who deals with data analytics will inevitably come across the topic of business intelligence. More and more companies are utilising data-driven decision-making. But what exactly is business intelligence? How does it work and why do you need business intelligence?
Business Intelligence
Whoever deals with data analytics will inevitably come across the topic of business intelligence. More and more companies are using the path of data-driven decision making. But what exactly is business intelligence? How does it work and why do you need business intelligence?
Business Intelligence: Definition
Business Intelligence (BI) is software that captures, stores, analyzes and provides business data. In this way, companies are able to make their strategy as well as business decisions based on real data. Business intelligence provides insight into relevant company data and enables companies to react quickly to changes in, for example, supply chains, production or the market.
Business Intelligence versus Business Analytics
Both business intelligence and business analytics belong to data analytics. Business Intelligence evaluates historical and current data. With these, the current status quo on a topic can be understood and how it has developed. Sound business decisions can then be made on the basis of this data. The term business analytics, on the other hand, refers to analyses that deal with the evaluation of data with a view to the future.
In addition, business intelligence software should output data in as comprehensible a manner as possible so that it can be understood and used by employees without technical background knowledge. Business analytics, on the other hand, requires data scientists who analyze and prepare the data to address a specific question.
Why is business intelligence important?
Business intelligence makes it possible to collect and evaluate internal and external information. This data can then be accessed by employees of a company and support the work of both decision-makers and operational employees. Different departments of a company have the possibility to directly access data relevant to them. In doing so, the information is presented in a user-friendly, understandable manner. Data can be output in the form of reports, dashboards, charts or graphs.
Business Intelligence is able to recognize patterns and take them into account. Thus, instead of reactive decisions, proactive decisions can be made. In addition, it is possible to combine business intelligence with artificial intelligence (AI) and machine learning (ML). This allows even complex processes to be analyzed automatically and optimization potential to be found.
Using business intelligence software and data-driven decision-making has several benefits for businesses:
- Acceleration of decision-making processes
- Improving efficiency by optimizing internal processes
- Developing new revenue and business areas
- Increase revenue and ROI through targeted planning and allocation of resources
- Mapping of key performance indicators in an understandable form
- Identify competitive advantages and market trends
- Identifying business issues
How does Business Intelligence work?
The data collected in data warehouses map the entire company and come from different sources such as internal processes and documents, but also from external sources such as social media. The data volumes stored in a data warehouse are available for business intelligence software. This prepares the data in a form suitable for the user. Both historical and current data is used for this purpose.
Business Intelligence is a overarching term for various software. For successful deployment, it is important to identify the appropriate systems. The following elements can be included:
- Reporting
- Monitoring
- Online Analytical Processing (OLAP)
- Visualizations
- Integrations with other systems such as CRM