Business intelligence (BI) refers to computer-based techniques used in spotting, digging-out, and analyzing business data, such as sales revenue by products and/or departments or associated costs and incomes.
BI technologies provide historical, current, and predictive views of business operations. Common functions of Business Intelligence technologies are reporting, online analytical processing, analytics, data mining, business performance management, benchmarking, text mining, and predictive analytics.
Business Intelligence often aims to support better business decision-making. Thus a BI system can be called a decision support system (DSS).
Though the term business intelligence is often used as a synonym for competitive intelligence, because they both support decision making, BI uses technologies, processes, and applications to analyze mostly internal, structured data and business processes while competitive intelligence is done by gathering, analyzing and disseminating information with or without support from technology and applications, and focuses on all-source information and data (unstructured or structured), mostly external, but also internal to a company, to support decision making.
BI AND DATAWAREHOUSING
Often BI applications use data gathered from a data warehouse or a data mart. However, not all data warehouses are used for business intelligence, nor do all business intelligence applications require a data warehouse.
A data warehouse is a repository (collection of resources that can be accessed to retrieve information) of an organization's electronically stored data, designed to facilitate reporting and analysis.
A data mart is a subset of an organizational data store, usually oriented to a specific purpose or major data subject, that may be distributed to support business needs. Data marts are analytical data stores designed to focus on specific business functions for a specific community within an organization.
WHERE TO APPLY BI IN AN ENTERPRISE?
Business Intelligence can be applied to the following business purposes (MARCKM), in order to drive business value:
Measurement – program that creates a hierarchy of Performance metrics and Benchmarking that informs business leaders about progress towards business goals (AKA Business process management). Analytics – program that builds quantitative processes for a business to arrive at optimal decisions and to perform Business Knowledge Discovery. Frequently involves: data mining, statistical analysis, Predictive analytics, Predictive modeling, Business process modeling. Reporting/Enterprise Reporting – program that builds infrastructure for Strategic Reporting to serve the Strategic management of a business, NOT Operational Reporting. Frequently involves: Data visualization, Executive information system, OLAP.
Collaboration/Collaboration platform – program that gets different areas (both inside and outside the business) to work together through Data sharing and Electronic Data Interchange. Knowledge Management – program to make the company data driven through strategies and practices to identify, create, represent, distribute, and enable adoption of insights and experiences that are true business knowledge. Knowledge Management leads to Learning Management and Regulatory Compliance/Compliance
CRITICAL SUCCESS FACTORS OF BI IMPLEMENTATION
Although there could be many factors that could affect the implementation process of a BI system
Business-driven methodology and project management Clear vision and planning Committed management support & sponsorship Data management and quality Mapping solutions to user requirements Performance considerations of the BI system Robust and expandable framework
KEY STAGES OF BI Data Sourcing Data Analysis Situation Awareness Risk Analysis Decision Support
Business Intelligence is about extracting information from multiple sources of data. The data might be: text documents - e.g. memos or reports or email messages; photographs and images; sounds; formatted tables; web pages and URL lists. The key to data sourcing is to obtain the information in electronic form. So typical sources of data might include: scanners; digital cameras; database queries; web searches; computer file access; etcetera.
Business Intelligence is about synthesizing useful knowledge from collections of data. It is about estimating current trends, integrating and summarizing disparate information, validating models of understanding, and predicting missing information or future trends. This process of data analysis is also called data mining or knowledge discovery. Typical analysis tools might use:- probability theory - e.g. classification, clustering and Bayesian networks; statistical methods - e.g. regression; operations research - e.g. queuing and scheduling; artificial intelligence - e.g. neural networks and fuzzy logic.
Business Intelligence is about filtering out irrelevant information, and setting the remaining information in the context of the business and its environment. The user needs the key items of information relevant to his or her needs, and summaries that are syntheses of all the relevant data (market forces, government policy etc.). Situation awareness is the grasp of the context in which to understand and make decisions. Algorithms for situation assessment provide such syntheses automatically.
Business Intelligence is about discovering what plausible actions might be taken, or decisions made, at different times. It is about helping you weigh up the current and future risk, cost or benefit of taking one action over another, or making one decision versus another. It is about inferring and summarizing your best options or choices.
Business Intelligence is about using information wisely. It aims to provide warning you of important events, such as takeovers, market changes, and poor staff performance, so that you can take preventative steps. It seeks to help you analyze and make better business decisions, to improve sales or customer satisfaction or staff morale. It presents the information you need, when you need it.
SIGNIFICANCE OF BI To know about Competitors…Market…
BI applications can also help managers to be better informed about actions that a company's competitors are taking.
BI systems can also be designed to provide managers with information on the state of economic trends or marketplace factors, or to provide managers with in depth knowledge about the internal operations of a business.
To know about customers
Having access to timely and accurate information is an important resource for a company, which can expedite decision-making and improve customers' experience.
In the competitive customer-service sector, companies need to have accurate, up-to-date information on customer preferences, so that the company can quickly adapt to their changing demands.
BI enables companies to gather information on the trends in the marketplace and come up with innovative products or services in anticipation of customer's changing demands.
For avoiding guess works
BI can be used to help analysts and managers determine which adjustments are most likely to respond to changing trends.
BI systems can help companies develop a more consistent, data-based decision making process for business decisions, which can produce better results than making business decisions by "guesswork."
For sharing information
BI can help companies share selected strategic information with business partners.
Some businesses use BI systems to share information with their suppliers like…..
inventory levels performance metrics other supply chain data
For improving performance
BI applications can enhance communication among departments, coordinate activities, and enable companies to respond more quickly to changes (e.g., in financial conditions, customer preferences, supply chain operations, etc.).
When a BI system is well-designed and properly integrated into a company's processes and decision-making process, it may be able to improve a company's performance.
ADVANTAGES OF BI Authorize employees: If an organization allows uncomplicated data access to the user which is easy to understand and evaluative, the employees can execute in various ways that can indirectly improve performance and back the entire business plan. Business Intelligence comprises healthy, lively business score registering, investigation, and reporting equipments so that every employee across the firm can make faster and enhanced decisions.2. Unite people to access data competently and successfully: The initiation of business intelligence has made decision making a lot simpler. Opinion leaders can access and evaluate data at any given point of time and place. The latest information is accessible on the users' desktop or over the internet.
3. Simplify teamwork and allocation: Business intelligence and partnership expertise enhances managerial efficiency. Firm incorporation of BI enables the employee to share data in a security improved, administered web ambiance with the team members, clients, and associates. They even have a centralized site to supervise their KPIs, access accounts, evaluate information as well as share texts, and connect to pertinent subject matter.4. Convey business intelligence to the entire firm: BI backs the width of the firm's business intelligence requirements. Premeditated planning is uncomplicated when familiar equipments are used, data supervision is easier and expansion is more lucrative. 5.Examine and increase insight: The fully integrated Business Intelligence tools enable employees to increase insight simply by utilizing well-known and accessible tools. When data is obtained easily and people interact freely, they are better able to investigate and assess information and then make knowledgeable, astute business plans.
6. Enhance association: Business Intelligence enhances association across the firm. Expressive approach, pre-set goals, aims, supervising performance, and then making well-versed decisions that assists the entire business plan is useful for the organization. Administrators can now initiate accountability guidelines on a policy diagram and employees can line up their goals with corporate goals.7. Lessen training requirements: With Business Intelligence people can interconnect with information they desire to access to. Using business tools that are common, easily accessible, and extensively backed, reduce the training costs of the firm.8. Transport refined investigation and reporting: Impressive scorecard practicality backed by accounts diagrams, graphs and assessments, signifies that employees can voluntarily follow key performance indicators (KPIs) aligned with key business objectives. Accepting and examining the association between KPIs and corporate goals can lead to better comprehension of daily business performance, so that the firm can act on it faster.
DISADVANTAGES OF BI 1.Piling of Historical Data The major objective of Business intelligence system is to stockpile past data about a firm's deals and reveal it in such a way that it permits professionals in decision making. On the flip side, this information generally amounts to a small portion of what the firms actually require to function, besides its restrained worth. While in other situations, the user may not have interest in historical data as many markets that the company regulates are in frequent alteration.2. Cost Business intelligence at times can be a little too much for small as well as for medium sized enterprises. The use of such system can be expensive for basic business transactions.
3.Complexity Another disadvantage of BI could be its complexity in implementation of data. It can be so intricate that it can make business techniques rigid to deal with. In the view of such premise, many business experts have predicted that these intricacies can ultimately throttle any business.4.Muddling of commercial settings Business Intelligence can cause commercial settings to turn out to be much more muddled.5.Limited use Like all improved technologies, business intelligence was first established keeping in consideration the buying competence of affluent firms. Even today BI system cannot be afforded by most of the companies. Although, traders in the past few years have started modifying their services towards medium and small sized industries, but the fact is that many of such firms does not consider them to be highly essential, for its complexity.
6.Time Consuming Implementation Many firms in today's fast paced industrial scenario are not patient enough to wait for the execution of Business intelligence in their organization. It takes around 18 months for data warehousing system to completely implement the system.
POPULAR BI TOOLS The most popular business intelligence tools are listed below in accordance to their rising worth, rising business intelligence intricacy, rising functionality, and diminishing number of total clients. Excel Excel as a business intelligence tool is useful because of several reasons. Some of them are its reasonability, easy accessibility and comprising most of the functions that user can use to demonstrate information. One can easily deliver an excel sheet to another user without being bothered whether the user knows how to interpret the data or not. Excel is best utilized for business functions treatment and objectives tracking and is popular than all OLAP equipments that have an "export to Excel" application. Even for domestic clarifications, the competence to export numbers to Excel usually requires to be created.
Reporting tool Both personalized reporting tools and the business reporting tools provide some suppleness in contexts of the aptitude for each client to generate, program, and operate their own accounts. The standard applications for a reporting tool are dashboard and commercial operations reporting. The various functionalities of reporting tools are information source link competence, programming and distribution capacity, security feature such as "single sign-on" policy and other in-house verification, personalization, export competence and incorporation with the Microsoft Office surroundings. Popular Reporting tools are Business Objects, Actuate and Cognos.
OLAP tool Generally used by highly developed users, OLAP tools make information simpler for them so that they can interpret it from manifold dimensions. In other words, OLAP tools are utilized for multidimensional study. The various functionality of OLAP equipments are aptitude to control parallelism delivered by hardware and RDBMS, personalization endeavors, performance, security applications and Metadata assistance.There are two kinds of OLAP tools. They are:a) MOLAP (Multidimensional OLAP): When user creates an account request, the MOLAP tool speedily create all information because all the information is before handedly arranged within the dice. b) ROLAP (Relational OLAP): The ROLAP tool classically comes with a 'Designer' part, where the information stockroom manager can identify the association between the relational desks, along with the measurements, characteristics, and chain of command map to the fundamental catalog tables.
Data mining tool Data mining is the technique of removing patterns from information and is becoming a progressively more significant equipment to alter this data into information. It is normally used in a diverse range of outlining processes, such as advertising, supervision, fraud finding and scientific invention.Data mining tools are generally for particular users. In a firm, whether small or large, only few expert professionals use data mining equipment. These tools are used for identifying association between various factors.
TECHNOLOGIES SUPPORTING BI Database systems and database integration Data warehousing, data stores and data marts Enterprise resource planning (ERP) systems Query and report writing technologies (MS-Access, SQL) Data mining and analytics tools Decision support systems Customer relation management software (CRM) Product lifecycle and supply chain management systems (SCM).