What is business intelligence?
Business intelligence (BI) is a technology-driven process for analyzing data and delivering actionable information that helps executives, managers and workers make informed business decisions. As part of the BI process, organizations collect data from internal IT systems and external sources, prepare it for analysis, run queries against the data and create data visualizations, BI dashboards and reports to make the analytics results available to business users for operational decision-making and strategic planning.
The ultimate goal of BI initiatives is to drive better business decisions that enable organizations to increase revenue, improve operational efficiency and gain competitive advantages over business rivals. To achieve that goal, BI incorporates a combination of analytics, data management and reporting tools, plus various methodologies for managing and analyzing data.
How does the business intelligence process work?
A business intelligence architecture includes more than just BI software. Business intelligence data is typically stored in a data warehouse built for an entire organization or in smaller data marts that hold subsets of business information for individual departments and business units, often with ties to an enterprise data warehouse. In addition, data lakes based on Hadoop clusters or other big data systems are increasingly used as repositories or landing pads for BI and analytics data, especially for log files, sensor data, text and other types of unstructured or semistructured data.
BI data can include historical information and real-time data gathered from source systems as it’s generated, enabling BI tools to support both strategic and tactical decision-making processes. Before it’s used in BI applications, raw data from different source systems generally must be integrated, consolidated and cleansed using data integration and data quality management tools to ensure that BI teams and business users are analyzing accurate and consistent information.
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From there, the steps in the BI process include the following:
data preparation, in which data sets are organized and modeled for analysis;
analytical querying of the prepared data;
distribution of key performance indicators (KPIs) and other findings to business users; and
use of the information to help influence and drive business decisions.
Initially, BI tools were primarily used by BI and IT professionals who ran queries and produced dashboards and reports for business users. Increasingly, however, business analysts, executives and workers are using business intelligence platforms themselves, thanks to the development of self-service BI and data discovery tools. Self-service business intelligence environments enable business users to query BI data, create data visualizations and design dashboards on their own.
BI programs often incorporate forms of advanced analytics, such as data mining, predictive analytics, text mining, statistical analysis and big data analytics. A common example is predictive modeling that enables what-if analysis of different business scenarios. In most cases, though, advanced analytics projects are conducted by separate teams of data scientists, statisticians, predictive modelers and other skilled analytics professionals, while BI teams oversee more straightforward querying and analysis of business data.
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