Business intelligence (BI) comprises the strategies and technologies used by enterprises for the

data analysis Data analysis is a process of inspecting, cleansing, transforming, and modeling data with the goal of discovering useful information, informing conclusions, and supporting decision-making. Data analysis has multiple facets and approaches, enc ...

and management of business

information Information is an abstract concept that refers to that which has the power to inform. At the most fundamental level information pertains to the interpretation of that which may be sensed. Any natural process that is not completely random, ...

. Common functions of business intelligence technologies include reporting, online analytical processing,

analytics Analytics is the systematic computational analysis of data or statistics. It is used for the discovery, interpretation, and communication of meaningful patterns in data. It also entails applying data patterns toward effective decision-making. It ...

, dashboard development, data mining, process mining, complex event processing, business performance management,

benchmarking Benchmarking is the practice of comparing business processes and performance metrics to industry bests and best practices from other companies. Dimensions typically measured are quality, time and cost. Benchmarking is used to measure performanc ...

, text mining,

predictive analytics Predictive analytics encompasses a variety of statistical techniques from data mining, predictive modeling, and machine learning that analyze current and historical facts to make predictions about future or otherwise unknown events. In busine ...

, and prescriptive analytics. BI tools can handle large amounts of structured and sometimes unstructured data to help identify, develop, and otherwise create new strategic

business opportunities A business opportunity (or bizopp) involves sale or lease of any product, service, equipment, etc. that will enable the purchaser-licensee to begin a business. The licensor or seller of a business opportunity usually declares that it will secure ...

. They aim to allow for the easy interpretation of these

big data Though used sometimes loosely partly because of a lack of formal definition, the interpretation that seems to best describe Big data is the one associated with large body of information that we could not comprehend when used only in smaller am ...

. Identifying new opportunities and implementing an effective strategy based on

insight Insight is the understanding of a specific cause and effect within a particular context. The term insight can have several related meanings: *a piece of information *the act or result of understanding the inner nature of things or of seeing intui ...

s can provide

business Business is the practice of making one's living or making money by producing or buying and selling products (such as goods and services). It is also "any activity or enterprise entered into for profit." Having a business name does not separ ...

es with a competitive market advantage and long-term stability, and help them take strategic decisions. Business intelligence can be used by enterprises to support a wide range of business decisions ranging from operational to strategic. Basic operating decisions include product positioning or

pricing Pricing is the process whereby a business sets the price at which it will sell its products and services, and may be part of the business's marketing plan. In setting prices, the business will take into account the price at which it could acq ...

. Strategic business decisions involve priorities, goals, and directions at the broadest level. In all cases, BI is most effective when it combines data derived from the market in which a company operates (external data) with data from company sources internal to the business such as financial and operations data (internal data). When combined, external and internal data can provide a complete picture which, in effect, creates an "intelligence" that cannot be derived from any singular set of data. Among myriad uses, business intelligence tools empower organizations to gain insight into new markets, to assess demand and suitability of products and services for different market segments, and to gauge the impact of marketing efforts. Chugh, R & Grandhi, S 2013, 'Why Business Intelligence? Significance of Business Intelligence tools and integrating BI governance with corporate governance', International Journal of E-Entrepreneurship and Innovation, vol. 4, no.2, pp. 1-14. https://www.researchgate.net/publication/273861123_Why_Business_Intelligence_Significance_of_Business_Intelligence_Tools_and_Integrating_BI_Governance_with_Corporate_Governance BI applications use data gathered from a data warehouse (DW) or from a data mart, and the concepts of BI and DW combine as "BI/DW" or as "BIDW". A data warehouse contains a copy of analytical data that facilitates decision support.

History

The earliest known use of the term ''business intelligence'' is in Richard Millar Devens' ''Cyclopædia of Commercial and Business Anecdotes'' (1865). Devens used the term to describe how the banker Sir Henry Furnese gained profit by receiving and acting upon information about his environment, prior to his competitors: The ability to collect and react accordingly based on the information retrieved, Devens says, is central to business intelligence. When Hans Peter Luhn, a researcher at IBM, used the term ''business intelligence'' in an article published in 1958, he employed the ''

Webster's Dictionary ''Webster's Dictionary'' is any of the English language dictionaries edited in the early 19th century by American lexicographer Noah Webster (1758–1843), as well as numerous related or unrelated dictionaries that have adopted the Webster's ...

'' definition of intelligence: "the ability to apprehend the interrelationships of presented facts in such a way as to guide action towards a desired goal." In 1989, Howard Dresner (later a

Gartner Gartner, Inc is a technological research and consulting firm based in Stamford, Connecticut that conducts research on technology and shares this research both through private consulting as well as executive programs and conferences. Its client ...

analyst) proposed ''business intelligence'' as an

umbrella term In linguistics, semantics, general semantics, and ontologies, hyponymy () is a semantic relation between a hyponym denoting a subtype and a hypernym or hyperonym (sometimes called umbrella term or blanket term) denoting a supertype. In othe ...

to describe "concepts and methods to improve business decision making by using fact-based support systems." It was not until the late 1990s that this usage was widespread. Critics see BI merely as an evolution of

business reporting Business reporting or enterprise reporting refers to both "the public reporting of operating and financial data by a business enterprise," and "the regular provision of information to decision-makers within an organization to support them in their ...

together with the advent of increasingly powerful and easy-to-use

tools. In this respect, it has also been criticized as a marketing buzzword in the context of the "

" surge.

Definition

According to Solomon Negash and Paul Gray, business intelligence (BI) can be defined as systems that combine: * Data gathering *

Data storage Data storage is the recording (storing) of information (data) in a storage medium. Handwriting, phonographic recording, magnetic tape, and optical discs are all examples of storage media. Biological molecules such as RNA and DNA are consi ...

Knowledge management Knowledge management (KM) is the collection of methods relating to creating, sharing, using and managing the knowledge and information of an organization. It refers to a multidisciplinary approach to achieve organisational objectives by making ...

with analysis to evaluate complex corporate and competitive information for presentation to planners and decision makers, with the objective of improving the timeliness and the quality of the input to the decision process." According to

Forrester Research Forrester is a research and advisory company that offers a variety of services including research, consulting, and events. Forrester has nine North America locations: Cambridge, Massachusetts; New York, New York; San Francisco, California; McLe ...

, business intelligence is "a set of methodologies, processes, architectures, and technologies that transform raw data into meaningful and useful information used to enable more effective strategic, tactical, and operational insights and decision-making." Under this definition, business intelligence encompasses

information management Information management (IM) concerns a cycle of organizational activity: the acquisition of information from one or more sources, the custodianship and the distribution of that information to those who need it, and its ultimate disposal throug ...

( data integration,

data quality Data quality refers to the state of qualitative or quantitative pieces of information. There are many definitions of data quality, but data is generally considered high quality if it is "fit for tsintended uses in operations, decision making and ...

, data warehousing, master-data management, text- and content-analytics, et al.). Therefore, Forrester refers to ''data preparation'' and ''data usage'' as two separate but closely linked segments of the business-intelligence architectural stack. Some elements of business intelligence are: * Multidimensional aggregation and allocation * Denormalization, tagging, and standardization * Realtime reporting with analytical alert * A method of interfacing with

unstructured data Unstructured data (or unstructured information) is information that either does not have a pre-defined data model or is not organized in a pre-defined manner. Unstructured information is typically text-heavy, but may contain data such as dates, num ...

sources * Group consolidation, budgeting, and rolling forecasts *

Statistical inference Statistical inference is the process of using data analysis to infer properties of an underlying distribution of probability.Upton, G., Cook, I. (2008) ''Oxford Dictionary of Statistics'', OUP. . Inferential statistical analysis infers properti ...

and probabilistic simulation * Key performance indicators optimization *

Version control In software engineering, version control (also known as revision control, source control, or source code management) is a class of systems responsible for managing changes to computer programs, documents, large web sites, or other collections o ...

and process management * Open item management Forrester distinguishes this from the ''business-intelligence market'', which is "just the top layers of the BI architectural stack, such as reporting,

, and dashboards."

Compared with competitive intelligence

Though the term business intelligence is sometimes a synonym for

competitive intelligence Competitive intelligence (CI) is the process and forward-looking practices used in producing knowledge about the competitive environment to improve organizational performance. It involves the systematic collection and analysis of information from ...

(because they both support

decision making In psychology, decision-making (also spelled decision making and decisionmaking) is regarded as the cognitive process resulting in the selection of a belief or a course of action among several possible alternative options. It could be either ra ...

), BI uses technologies, processes, and applications to analyze mostly internal, structured data and business processes while competitive intelligence gathers, analyzes, and disseminates information with a topical focus on company competitors. If understood broadly, business intelligence can be considered as a subset of competitive intelligence.

Compared with business analytics

Business intelligence and business analytics are sometimes used interchangeably, but there are alternate definitions. Thomas Davenport, professor of information technology and management at

Babson College Babson College is a private business school in Wellesley, Massachusetts. Established in 1919, its central focus is on entrepreneurship education. It was founded by Roger W. Babson as an all-male business institute, but became coeducational in ...

argues that business intelligence should be divided into querying, reporting, Online analytical processing (OLAP), an "alerts" tool, and business analytics. In this definition, business analytics is the subset of BI focusing on statistics, prediction, and optimization, rather than the reporting functionality.

Data

Business operations can generate a very large amount of

data In the pursuit of knowledge, data (; ) is a collection of discrete values that convey information, describing quantity, quality, fact, statistics, other basic units of meaning, or simply sequences of symbols that may be further interpret ...

in the form of e-mails, memos, notes from call-centers, news, user groups, chats, reports, web-pages, presentations, image-files, video-files, and marketing material. According to

Merrill Lynch Merrill (officially Merrill Lynch, Pierce, Fenner & Smith Incorporated), previously branded Merrill Lynch, is an American investment management and wealth management division of Bank of America. Along with BofA Securities, the investment ba ...

, more than 85% of all business information exists in these forms; a company might only use such a document a single time. Because of the way it is produced and stored, this information is either unstructured or semi-structured. The management of semi-structured data is an unsolved problem in the information technology industry. According to projections from Gartner (2003), white-collar workers spend 30–40% of their time searching, finding, and assessing unstructured data. BI uses both structured and unstructured data. The former is easy to search, and the latter contains a large quantity of the information needed for analysis and decision-making. Because of the difficulty of properly searching, finding, and assessing unstructured or semi-structured data, organizations may not draw upon these vast reservoirs of information, which could influence a particular decision, task, or project. This can ultimately lead to poorly informed decision-making. Therefore, when designing a business intelligence/DW-solution, the specific problems associated with semi-structured and unstructured data must be accommodated for as well as those for the structured data.

Unstructured data vs. semi-structured data

Unstructured and semi-structured data have different meanings depending on their context. In the context of relational database systems, unstructured data cannot be stored in predictably ordered

columns A column or pillar in architecture and structural engineering is a structural element that transmits, through compression, the weight of the structure above to other structural elements below. In other words, a column is a compression membe ...

and rows. One type of unstructured data is typically stored in a BLOB (binary large object), a catch-all data type available in most

relational database A relational database is a (most commonly digital) database based on the relational model of data, as proposed by E. F. Codd in 1970. A system used to maintain relational databases is a relational database management system (RDBMS). Many relati ...

management systems. Unstructured data may also refer to irregularly or randomly repeated column patterns that vary from row to row or files of natural language that do not have detailed metadata. Many of these data types, however, like e-mails, word processing text files, PDFs, PPTs, image-files, and video-files conform to a standard that offers the possibility of metadata.

Metadata Metadata is "data that provides information about other data", but not the content of the data, such as the text of a message or the image itself. There are many distinct types of metadata, including: * Descriptive metadata – the descriptive ...

can include information such as author and time of creation, and this can be stored in a relational database. Therefore, it may be more accurate to talk about this as semi-structured documents or data, but no specific consensus seems to have been reached. Unstructured data can also simply be the knowledge that business users have about future business trends. Business forecasting naturally aligns with the BI system because business users think of their business in aggregate terms. Capturing the business knowledge that may only exist in the minds of business users provides some of the most important data points for a complete BI solution.

Limitations of semi-structured and unstructured data

There are several challenges to developing BI with semi-structured data. According to Inmon & Nesavich,Inmon, B. & A. Nesavich, "Unstructured Textual Data in the Organization" from "Managing Unstructured data in the organization", Prentice Hall 2008, pp. 1–13 some of those are: * Physically accessing unstructured textual data – unstructured data is stored in a huge variety of formats. *

Terminology Terminology is a group of specialized words and respective meanings in a particular field, and also the study of such terms and their use; the latter meaning is also known as terminology science. A ''term'' is a word, compound word, or multi-wo ...

– Among researchers and analysts, there is a need to develop standardized terminology. * Volume of data – As stated earlier, up to 85% of all data exists as semi-structured data. Couple that with the need for word-to-word and semantic analysis. * Searchability of unstructured textual data – A simple search on some data, e.g. apple, results in links where there is a reference to that precise search term. (Inmon & Nesavich, 2008) gives an example: "a search is made on the term felony. In a simple search, the term felony is used, and everywhere there is a reference to felony, a hit to an unstructured document is made. But a simple search is crude. It does not find references to crime, arson, murder, embezzlement, vehicular homicide, and such, even though these crimes are types of felonies".

Metadata

To solve problems with searchability and assessment of data, it is necessary to know something about the content. This can be done by adding context through the use of

metadata Metadata is "data that provides information about other data", but not the content of the data, such as the text of a message or the image itself. There are many distinct types of metadata, including: * Descriptive metadata – the descriptive ...

. Many systems already capture some metadata (e.g. filename, author, size, etc.), but more useful would be metadata about the actual content – e.g. summaries, topics, people, or companies mentioned. Two technologies designed for generating metadata about content are automatic categorization and information extraction.

Applications

Business intelligence can be applied to the following business purposes: *

Performance metrics A performance indicator or key performance indicator (KPI) is a type of performance measurement. KPIs evaluate the success of an organization or of a particular activity (such as projects, programs, products and other initiatives) in which it en ...

and

inform business leaders of progress towards business goals (

business process management Business process management (BPM) is the discipline in which people use various methods to discover, model, analyze, measure, improve, optimize, and automate business processes. Any combination of methods used to manage a company's business p ...

). *

Analytics Analytics is the systematic computational analysis of data or statistics. It is used for the discovery, interpretation, and communication of meaningful patterns in data. It also entails applying data patterns toward effective decision-making. It ...

quantify processes for a business to arrive at optimal decisions, and to perform business knowledge discovery. Analytics may variously involve data mining, process mining,

statistical analysis Statistical inference is the process of using data analysis to infer properties of an underlying distribution of probability.Upton, G., Cook, I. (2008) ''Oxford Dictionary of Statistics'', OUP. . Inferential statistical analysis infers propertie ...

, predictive modeling, business process modeling,

data lineage Data lineage includes the data origin, what happens to it, and where it moves over time. Data lineage gives visibility while greatly simplifying the ability to trace errors back to the root cause in a data analytics process. It also enables repl ...

, complex event processing, and prescriptive analytics. For example within banking industry, academic research has explored potential for BI based analytics in credit evaluation, customer churn management for managerial adoption *

Business reporting Business reporting or enterprise reporting refers to both "the public reporting of operating and financial data by a business enterprise," and "the regular provision of information to decision-makers within an organization to support them in their ...

can use BI data to inform strategy. Business reporting may involve dashboards,

data visualization Data and information visualization (data viz or info viz) is an interdisciplinary field that deals with the graphic representation of data and information. It is a particularly efficient way of communicating when the data or information is nu ...

, executive information system, and/or OLAP * BI can facilitate

collaboration Collaboration (from Latin ''com-'' "with" + ''laborare'' "to labor", "to work") is the process of two or more people, entities or organizations working together to complete a task or achieve a goal. Collaboration is similar to cooperation. Most ...

both inside and outside the business by enabling data sharing and electronic data interchange *

is concerned with the creation, distribution, use, and management of business intelligence, and of business knowledge in general. Knowledge management leads to learning management and

regulatory compliance In general, compliance means conforming to a rule, such as a specification, policy, standard or law. Compliance has traditionally been explained by reference to the deterrence theory, according to which punishing a behavior will decrease the viol ...

Roles

Some common technical roles for business intelligence developers are: *

Business analyst A business analyst (BA) is a person who processes, interprets and documents business processes, products, services and software through analysis of data. The role of a business analyst is to ensure business efficiency increases through their k ...

* Data analyst * Data engineer *

Data scientist Data science is an interdisciplinary field that uses scientific methods, processes, algorithms and systems to extract or extrapolate knowledge and insights from noisy, structured and unstructured data, and apply knowledge from data across a bro ...

* Database administrator

Risk

In a 2013 report,

categorized business intelligence vendors as either an independent "pure-play" vendor or a consolidated "mega-vendor". In 2019, the BI market was shaken within Europe for the new legislation of GDPR (General Data Protection Regulation) which puts the responsibility of data collection and storage onto the data user with strict laws in place to make sure the data is compliant. Growth within Europe has steadily increased since May 2019 when GDPR was brought. The legislation refocused companies to look at their own data from a compliance perspective but also revealed future opportunities using personalization and external BI providers to increase market share.SaaS BI growth will soar in 2010 , Cloud Computing
InfoWorld (1 February 2010). Retrieved 17 January 2012.

References

Bibliography

* Ralph Kimball ''et al.'' "The Data warehouse Lifecycle Toolkit" (2nd ed.) Wiley * Peter Rausch, Alaa Sheta, Aladdin Ayesh : ''Business Intelligence and Performance Management: Theory, Systems, and Industrial Applications'', Springer Verlag U.K., 2013, . * Munoz, J.M. (2017). Global Business Intelligence. Routledge : UK. *

External links

{{Authority control Financial data analysis Data management Financial technology Information management