Just the other day, someone asked me this question: “What is business intelligence?” It got me thinking…I frequently write about business intelligence (BI) and why it’s important, but I’ve never really defined the term. In this post, I’d like to take a step back and give you the what, why, who, where, when, and how of business intelligence. Sound good? Okay, let’s get started…
What is business intelligence?
Most companies collect and store data covering all areas of their business. This data sits in a database and is really pretty useless in this format. What do I mean by that? If you looked at data in a database, it wouldn’t make any sense and would most definitely overwhelm you. This is where business intelligence comes into play. Business intelligence is the process of taking that (overwhelming) data in your database and presenting it in an understandable, accessible, and useful fashion.
There isn’t one application that is the “business intelligence” application. The term “business intelligence” covers a wide range of applications such as: Ad-hoc reports, interactive reports, business dashboards, pivot tables, what-if analysis, and many more. These applications are all designed for data analytics and accessed via a computer, tablet, or smartphone. Some applications are web-based while others reside within the confines of a larger BI software suite.
Why do I need business intelligence?
Business intelligence helps companies discover trends and find new business opportunities, but perhaps the biggest, most popular benefit is improved decision-making. Good BI applications let you easily analyze past data and make better, more informed decisions based on that data.
For example, suppose an electronics company analyzed past sales data and discovered that products released on Wednesdays were 10% more profitable than products released on Thursdays. With this knowledge, their products are instantly more profitable! I realize that example doesn’t apply to everyone, but the concept holds true regardless of industry: Past data is the key to informed decisions.
Who uses business intelligence?
Short answer: Everyone! Long answer: Different people use business intelligence for different tasks. For example, executives might use the dashboard component of BI for daily business monitoring or use the analytics component for decision making. A salesperson might access mobile BI apps while on the road and learn about a customer’s purchasing history. Or, anyone in the company could run ad-hoc reports if they need data pertaining to their job.
Where do I use business intelligence?
It depends on your BI solution. Some BI applications only work within the confines of a larger BI software suite. Unless that BI software suite is installed on multiple computers, it’s only accessible from work. On the flip side, other BI tools create web-based applications. These applications are accessible from anywhere, including smartphones.
When do I use business intelligence?
Every day. From monitoring business dashboards, to running reports for meetings, to general data analytics, business intelligence is a daily exercise. Regular BI use helps you keep a close eye on business and make quick, yet informed decisions.
How do I get business intelligence?
There are many, many BI solutions available. But, before you begin your BI search, you must create a detailed plan specific to your company. Here are a few questions you need to answer before you begin your search:
- Quick or customized? Do you want a pre-built BI solution, or a BI tool that lets you create BI apps quickly? The former is the quick solution, but the latter is built around your business.
- Pricing structure? Pricing is more than just setting a budget. Some solutions charge by the month, others by the year, while others charge by the user, developer, or database. Beware, some of the cheapest options quickly turn into the most expensive once all the hidden fees are flushed out. If you want some pricing advice and an explanation of software fees, check out this article.
- Needs vs. wants? Not every BI solution comes with the same capabilities. What elements of business intelligence are important to you? Figure out exactly which elements are necessary and which are just nice to have. For a quick list of essential BI elements to look for in a solution, check out this article.
To conclude, business intelligence is a very important, if not essential tool for your business. While this brief primer hopefully helps you understand BI a little better, it is by no means a comprehensive guide. If you need help with BI or have any questions, we’d be happy to help you. Just fill out this form or give us a call at 630-916-0662.