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Business intelligence (BI) consists of strategies, methodologies, and technologies used by enterprises for
data analysis Data analysis is the process of inspecting, Data cleansing, cleansing, Data transformation, transforming, and Data modeling, modeling data with the goal of discovering useful information, informing conclusions, and supporting decision-making. Da ...
and management of business
information Information is an Abstraction, abstract concept that refers to something which has the power Communication, to inform. At the most fundamental level, it pertains to the Interpretation (philosophy), interpretation (perhaps Interpretation (log ...
. Common functions of BI technologies include reporting,
online analytical processing In computing, online analytical processing (OLAP) (), is an approach to quickly answer multi-dimensional analytical (MDA) queries. The term ''OLAP'' was created as a slight modification of the traditional database term online transaction proces ...
,
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, which also falls under and directly relates to the umbrella term, data sc ...
,
dashboard A dashboard (also called dash, instrument panel or IP, or fascia) is a control panel (engineering), control panel set within the central console of a vehicle, boat, or cockpit of an aircraft or spacecraft. Usually located directly ahead of the ...
development,
data mining Data mining is the process of extracting and finding patterns in massive data sets involving methods at the intersection of machine learning, statistics, and database systems. Data mining is an interdisciplinary subfield of computer science and ...
, 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 Project management triangle, quality, time and cost. Benchmarking is ...
, text mining,
predictive analytics Predictive analytics encompasses a variety of Statistics, statistical techniques from data mining, Predictive modelling, predictive modeling, and machine learning that analyze current and historical facts to make predictions about future or other ...
, and prescriptive analytics. BI tools can handle large amounts of structured and sometimes unstructured data to help organizations identify, develop, and otherwise create new strategic business opportunities. They aim to allow for the easy interpretation of these
big data Big data primarily refers to data sets that are too large or complex to be dealt with by traditional data processing, data-processing application software, software. Data with many entries (rows) offer greater statistical power, while data with ...
. Identifying new opportunities and implementing an effective strategy based on
insight Insight is the understanding of a specific causality, 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 se ...
s is assumed to potentially provide
business Business is the practice of making one's living or making money by producing or Trade, buying and selling Product (business), products (such as goods and Service (economics), services). It is also "any activity or enterprise entered into for ...
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 Business process, process whereby a business sets and displays 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 ...
. Strategic business decisions involve priorities,
goal A goal or objective is an idea of the future or desired result that a person or a group of people envision, plan, and commit to achieve. People endeavour to reach goals within a finite time by setting deadlines. A goal is roughly similar to ...
s, and directions at the broadest level. In all cases, Business Intelligence (BI) is considered most effective when it combines data from the market in which a company operates (external data) with data from internal company sources, such as financial and operational information. When integrated, external and internal data provide a comprehensive view that creates ‘intelligence’ not possible from any single data source alone. Among their many 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.
/ref> BI applications use data gathered from a
data warehouse In computing, a data warehouse (DW or DWH), also known as an enterprise data warehouse (EDW), is a system used for Business intelligence, reporting and data analysis and is a core component of business intelligence. Data warehouses are central Re ...
(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 A decision support system (DSS) is an information system that supports business or organizational decision-making activities. DSSs serve the management, operations and planning levels of an organization (usually mid and higher management) and ...
.


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 Hans Peter Luhn (July 1, 1896 – August 19, 1964) was a German-American researcher in the field of computer science and Library & Information Science for IBM, and creator of the Luhn algorithm, KWIC (Key Words In Context) indexing, and s ...
, a researcher at
IBM International Business Machines Corporation (using the trademark IBM), nicknamed Big Blue, is an American Multinational corporation, multinational technology company headquartered in Armonk, New York, and present in over 175 countries. It is ...
, used the term ''business intelligence'' in an article published in 1958, he employed the ''
Webster's Dictionary ''Webster's Dictionary'' is any of the US English language dictionaries edited in the early 19th century by Noah Webster (1758–1843), a US lexicographer, as well as numerous related or unrelated dictionaries that have adopted the Webster's n ...
'' 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 an American research and advisory firm focusing on business and technology topics. Gartner provides its products and services through research reports, conferences, and consulting. Its clients include large corporations, gover ...
analyst) proposed ''business intelligence'' as an
umbrella term Hypernymy and hyponymy are the wikt:Wiktionary:Semantic relations, semantic relations between a generic term (''hypernym'') and a more specific term (''hyponym''). The hypernym is also called a ''supertype'', ''umbrella term'', or ''blanket term ...
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.


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 con ...
*
Knowledge management Knowledge management (KM) is the set of procedures for producing, disseminating, utilizing, and overseeing an organization's knowledge and data. It alludes to a multidisciplinary strategy that maximizes knowledge utilization to accomplish organ ...
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 Research, Inc. is a research and advisory firm. Forrester serves clients in North America, Europe, and Asia Pacific. The firm is headquartered in Cambridge, Massachusetts, Cambridge, MA with global offices in Amsterdam, London, New D ...
, 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) is the appropriate and optimized capture, storage, retrieval, and use of information. It may be personal information management or organizational. Information management for organizations concerns a cycle of organiz ...
(
data integration Data integration refers to the process of combining, sharing, or synchronizing data from multiple sources to provide users with a unified view. There are a wide range of possible applications for data integration, from commercial (such as when a ...
,
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 plain text, text-heavy, but may contain data such ...
sources * Group consolidation, budgeting, and rolling forecasts *
Statistical inference Statistical inference is the process of using data analysis to infer properties of an underlying probability distribution.Upton, G., Cook, I. (2008) ''Oxford Dictionary of Statistics'', OUP. . Inferential statistical analysis infers properties of ...
and probabilistic simulation * Key performance indicators optimization *
Version control Version control (also known as revision control, source control, and source code management) is the software engineering practice of controlling, organizing, and tracking different versions in history of computer files; primarily source code t ...
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,
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, which also falls under and directly relates to the umbrella term, data sc ...
, 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. Competitive intelligence involves systematically collecting and anal ...
(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, competitive intelligence can be considered as a subset of business 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 university, private business school in Wellesley, Massachusetts, United States specializing in entrepreneurship education. Founded in 1919 by Roger Babson, the college was established as the Babson Institute in his We ...
argues that business intelligence should be divided into querying, reporting,
Online analytical processing In computing, online analytical processing (OLAP) (), is an approach to quickly answer multi-dimensional analytical (MDA) queries. The term ''OLAP'' was created as a slight modification of the traditional database term online transaction proces ...
(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.


Unstructured data

Business operations can generate a very large amount of
data Data ( , ) are a collection of discrete or continuous values that convey information, describing the quantity, quality, fact, statistics, other basic units of meaning, or simply sequences of symbols that may be further interpreted for ...
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, 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.


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


Generative AI

Generative business intelligence is the application of generative AI techniques, such as
large language models A large language model (LLM) is a language model trained with Self-supervised learning, self-supervised machine learning on a vast amount of text, designed for natural language processing tasks, especially Natural language generation, language g ...
, in business intelligence. This combination facilitates data analysis and enables users to interact with data more intuitively, generating actionable insights through natural language queries. Microsoft Copilot was for example integrated into the business analytics tool Power BI.


Applications

Business intelligence can be applied to the following business purposes: * Performance metrics and
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 Project management triangle, quality, time and cost. Benchmarking is ...
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 Business process discovery, discover, Business process modeling, model, Business analysis, analyze, measure, improve, optimize, and Business process auto ...
). *
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, which also falls under and directly relates to the umbrella term, data sc ...
quantify processes for a business to arrive at optimal decisions, and to perform business knowledge discovery. Analytics may variously involve
data mining Data mining is the process of extracting and finding patterns in massive data sets involving methods at the intersection of machine learning, statistics, and database systems. Data mining is an interdisciplinary subfield of computer science and ...
, process mining,
statistical analysis Statistical inference is the process of using data analysis to infer properties of an underlying probability distribution.Upton, G., Cook, I. (2008) ''Oxford Dictionary of Statistics'', OUP. . Inferential statistical analysis infers properties of ...
,
predictive analytics Predictive analytics encompasses a variety of Statistics, statistical techniques from data mining, Predictive modelling, predictive modeling, and machine learning that analyze current and historical facts to make predictions about future or other ...
, predictive modeling,
business process modeling Business process modeling (BPM) is the action of capturing and representing business processes, processes of an enterprise (i.e. modeling them), so that the current business processes may be analyzed, applied securely and consistently, improved, ...
, data lineage, 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 * Reporting, dashboards and data visualization,
executive information system An executive information system (EIS), also known as an executive support system (ESS), is a type of management support system that facilitates and supports senior executive information and decision-making needs. It provides easy access to intern ...
, and/or
OLAP In computing, online analytical processing (OLAP) (), is an approach to quickly answer multi-dimensional analytical (MDA) queries. The term ''OLAP'' was created as a slight modification of the traditional database term online transaction processi ...
* 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. The ...
both inside and outside the business by enabling data sharing and
electronic data interchange Electronic data interchange (EDI) is the concept of businesses electronically communicating information that was traditionally communicated on paper, such as purchase orders, advance ship notices, and invoices. Technical standards for EDI exist to ...
*
Knowledge management Knowledge management (KM) is the set of procedures for producing, disseminating, utilizing, and overseeing an organization's knowledge and data. It alludes to a multidisciplinary strategy that maximizes knowledge utilization to accomplish organ ...
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 deterrence theory, according to which punishing a behavior will decrease the viol ...
.


Roles

Some common technical roles for business intelligence developers are: * Business analyst *
Data analyst Data analysis is the 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, e ...
* Data engineer * Data scientist *
Database administrator A database administrator (DBA) manages computer databases. The role may include capacity planning, installation, configuration, database design, migration, performance monitoring, security, troubleshooting, as well as backup and data re ...
*
Financial analyst A financial analyst is a professional undertaking financial analysis for external or internal clients as a core feature of the job. Gartner Gartner, Inc. is an American research and advisory firm focusing on business and technology topics. Gartner provides its products and services through research reports, conferences, and consulting. Its clients include large corporations, gover ...
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
InfoWorld (1 February 2010). Retrieved 17 January 2012.


See also

* Agile Business Intelligence * Analytic applications * Arcplan * Artificial intelligence marketing * Business activity monitoring * Business Intelligence 2.0 * Business Intelligence Competency Center *
Business intelligence software Business intelligence software is a type of application software designed to retrieve, analyze, transform and report data for business intelligence (BI). The applications generally read data that has been previously stored, often - though not nece ...
*
Business process discovery Business process discovery (BPD) related to business process management and process mining is a set of techniques that manually or automatically construct a representation of an organisations' current business processes and their major process varia ...
*
Business process management Business process management (BPM) is the discipline in which people use various methods to Business process discovery, discover, Business process modeling, model, Business analysis, analyze, measure, improve, optimize, and Business process auto ...
* Customer dynamics * Decision engineering * Embedded analytics * Enterprise planning systems * Integrated business planning *
Management information system A management information system (MIS) is an information system used for decision-making, and for the coordination, control, analysis, and visualization of information in an organization. The study of the management information systems involves peo ...
* Mobile business intelligence * Operational intelligence * Process mining * Real-time business intelligence * Sales intelligence * Test and learn


References


Bibliography

* * . * *


External links

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