Is there a succinct, conclusive answer to the question, “What is business intelligence?”
In short, no. What business intelligence is changes as smart people at successful organizations figure out new ways to use the mountains of data that have become available with the advent of more efficient techniques of data mining.
However, even as the specific meaning of business intelligence evolves, the basic definition remains constant. Business intelligence, or BI, is the raw information that, when properly channeled, allows business people to make sound decisions. It’s also the technological means by which that information is presented to decision makers.
As analysts at PricewaterhouseCoopers explain it, business intelligence is “… about getting the right information to the right decision makers at the right time. The greatest challenge of BI … is the combination of people, technology and business processes in order to transform data in valuable information and insights which will lead to business awareness and proactive decision making.”
While the precise definition of business intelligence is constantly evolving, some qualities remain constant. Business intelligence must always be:
Analysts are always on the lookout for more effective, efficient methods of gathering, storing, interpreting and sharing the data that constitutes business intelligence.
With those qualities in mind, the next important thing to know about business intelligence is how it’s acquired.
Collecting Business Intelligence
Business intelligence is only useful if the method used to gather it is efficient and comprehensive. Intelligence software must sort through mountains of data and provide accurate measurements, and that can only be done through automation.
The business intelligence software used to collect data can be proprietary or a custom version of “off the shelf” software. What it should not be is generic. Every organization has unique goals, and the data required for the decision-making process should reflect that.
Data Storage Challenges
Once the type and depth of data to be gathered is determined, it is imperative to devise a method of storage that is secure, but easily accessed by those cleared to access it. Data is virtually useless unless it is appropriately categorized and filed so that it can be reached when needed.
Large organizations employ database managers to oversee the storage process. They are responsible for structuring data files so they are most useful in support of the organization’s business goals. Common terms used to refer to data storage are “data warehouse” and “data mart.”
As those two terms indicate, data storage is intended to allow end users to easily access information. That means the storage method must be devised with the end user’s convenience in mind, as well as for optimal security.
Presenting and Analyzing Business Data
As advanced as today’s business intelligence software is, the key to its usefulness remains the human element. An organization’s decision makers might not possess the technical expertise required to organize the data, but they certainly expect to be able to access it when they need it, and they expect it to be presented in formats that are in line with the organization’s business goals.
That might mean a visual presentation, such as charts and graphs, or it might be a custom report designed specifically by and for the organization. The bottom line on data presentation is, once again, how useful and accessible it is for the end user.
Five Steps for Effective Use of Business Intelligence
Author Bernard Marr, an analytics and business intelligence expert, suggests this five-step process to ensure effective business intelligence design for your organization:
- Identify the organization’s strategic objective.
- Identify, collect and organize the right data.
- Transform the data into information and insights.
- Communicate the information and insights.
- Turn the information into actionable knowledge.
By following these steps, Marr writes, an organization can become “business intelligent,” and ensure that decision makers are provided the information they need to guide the organization toward achievement of its goals.