What Is Business Intelligence (BI)?

Business intelligence (BI) provides data that helps companies make timely and informed decisions. We explain how implementing BI software can give companies of any size a competitive edge. Plus, we share examples of how some of the most tech savvy companies are using with Business Intelligence services.

Business intelligence refers to the technology that enables businesses to organize, analyze and contextualize business data from around the company. BI includes multiple tools and techniques to transform raw data into meaningful and actionable information.

BI systems have four main parts:

A data warehouse stores company information from a variety of sources in a centralized and accessible location.

Business analytics or data management tools mine and analyze data in the data warehouse.

Business performance management (BPM) tools monitor and analyze progress towards business goals.

A user interface (usually an interactive dashboard with data visualization reporting tools) provides quick access the information.

German market research firm Statista estimates the volume of data created worldwide by 2024 will be 149 zettabytes. This vast amount of data, or "big data," has made business intelligence systems relevant for companies that want to harness its power for a competitive advantage. Many BI systems use artificial intelligence (AI) and other capabilities as a part of business analytics.

Key Takeaways:

Business intelligence offers a wide variety of tools and techniques to support reliable and accurate decision-making.

The most successful companies use BI to make sense of ever-increasing amounts of data in a fast and economical way.

BI-based, data-driven decision-making helps companies stay relevant and competitive.

Where Is BI Used?

Sales, marketing, finance and operations departments use business intelligence. Tasks include quantitative analysis, measuring performance against business goals, gleaning customer insights and sharing data to identify new opportunities.

Here are examples of how various teams and departments use business intelligence.

Data scientists and analysts:

Analysts are BI power users, and they use centralized company data paired with powerful analytics tools to understand where opportunities for improvement exist and what strategic recommendations to propose to company leadership.

Finance:

By blending financial data with operations, marketing and sales data, users can pull insights from which decisions can be acted upon and understand factors that impact profit and loss.

Marketing:

Business intelligence tools help marketers track campaign metrics from a central digital space. BI systems can provide real-time campaign tracking, measure each effort’s performance and plan for future campaigns. This data gives marketing teams more visibility into overall performance and provides contextual visuals for sharing with the company SharePoint Services Chicago.

Sales:

Sales data analysts and operation managers often use BI dashboards and key performance indicators (KPIs) for quick access to complex information like discount analysis, customer profitability and customer lifetime value. Sales managers monitor revenue targets, sales rep performance along with the status of the sales pipeline using dashboards with reports and data visualizations.

Operations:

To save time and resources, managers can access and analyze data like supply chain metrics to find ways to optimize processes. Business intelligence can also ensure that service level agreements are met and help improve distribution routes.

In a genuinely data-driven company, every department and employee can take advantage of BI-generated insights.

What Is the Value of Business Intelligence?

Business intelligence's highest value is its ability to support data-driven decisions. BI transforms pools of raw data into useful information that informs decisions and leads to actions that yield positive bottom-line impact.

BI systems drive decisions based on historical, current and potential future data.

Descriptive analytics:

These analytics reveal what has happened or is happening and are part of dashboards, business reporting, data warehousing and scorecards. When managed well, you’ll have a better understanding of problem areas in your business and can find opportunities to improve.

Predictive analytics:

These advanced analytics use data mining, predictive modeling, and machine learning to help make projections of future events and assess the likelihood that something will happen.

Prescriptive analytics:

These analytics reveal why you should take a particular action. Prescriptive analytics enable optimization, simulation, decision modeling and provide the best possible analysis for business decisions and actions.

BI software gathers sales, production, financial and many other business data sources. Many companies use industry data to benchmark performance against competitors.