What is Business Intelligence?

The goal of every business is to be successful by gaining new
customers and retaining old customers. A crucial way of achieving this
end is through Business Intelligence, or simply BI.


Business intelligence can be defined as a process of collecting
information in the area of business. An essential idea of business is
that data is enhanced into information and then into knowledge. Business
use BI to gain an advantage in the marketplace by understanding their
customer’s needs, customer’s decision-making processes, and economic,
cultural, and technological trends. Business intelligence involves
analyzing not only the customer but the entire industry as a whole.
Finally, business intelligence is driven by a goal set by the company.
The goal can be short term or long term.

History of Business Intelligence

Business intelligence was first referred to in Sun Tzu s Art of War.
Tzu claimed that in order to win a war you had to have complete
knowledge and understand of your strengths and weaknesses as well as
those of your enemy. This is the core idea behind modern business
intelligence. A company must know itself better than anyone else, and
know its customers and competitors better than anyone else. It is ironic
how much business and warfare are alike. In BI, one must sift through
heaps of data (both external and internal) for management to then device
strategies for marketing and where to take the business.

Key Performance Indicators

In BI, the present state of business is assessed by the use of Key
Performance Indicators (KPI). Data is becoming available to businesses
faster as more organizations implement KPI. In the past, data was
available after one or two months, which did not help businesses adjust
their strategies in a timely manner. More recently, however, banks have
tried to make data available sooner and with shorter intervals,
especially for businesses that have higher operational/credit risk
loading (I.E. wealth management and credit cards). Some companies can
get data weekly, which helps them adjust their strategies more
efficiently than ever before.

Business Intelligence Tools

Business intelligence involves collecting quite a bit of information
and analyzing it. Many business use tools to achieve this. A few of the
data tools are data modeling, data warehouses, and data mining. Data
tools help employees collect the data and analyze it efficiently. Data
tools are for organizational purposes mostly. Online Analytical
Processing (OLAP) is used in the analyzing process. OLAP is sometimes
simply referred to as Analytics, which is based on the hypercube or cube
and dimensional analysis.


Some businesses also use software vendors for BI tools. There are
quite a few enterprises offering BI technology. If a business does not
get the BI tools themselves, then software vendor will provide a
business with tools, and sometimes software support and BI professionals
who will help the company analyze results and collect data. Some
companies providing BI software are Siebel Systems, Microsoft, Altius
Consulting, Business-Soft, and SAS Institute.

How Business Intelligence Can Help Your Business

Businesses understand that knowing the customer is the key to
success. Business intelligence is the path through which a business can
collect data about the customer and analyze it. Business intelligence is
also about knowing the market, including competitors and market trends.
A business that has the most accurate understanding of its marketplace
will be more adequately prepared for the continual changes that
inevitable occur in markets. Business intelligence is an important
concept for any company to understand, because it will help them to gain
new customers, retain old customers, and see a positive ROI.