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What Is Business Intelligence (BI)?

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Business Intelligence (BI) is an analytical process based on technological tools and allows executives and managers to make data-driven decisions based on business data analysis.

BI plays a vital role by filtering out all the data generated within the business and hand out easy-to-read reports, performance metrics and trends that are very useful in management decision-making.

The following are the main points to consider when it comes to BI and they are the technology framework, which is the one that is accountable for collecting, storing and processing the company data. BI procedures release reports and insights which are imperative for improving managerial decision-making efficiency. Software entities form BI solutions to address the data management requirements of companies that seek to optimize their analytics capabilities. These solutions may appear in different forms, such as spreadsheets, reporting/query software, data visualization tools, data mining applications, and online analytical processing (OLAP) systems.

Why Business Intelligence is important?

The business intelligence (BI) technology is a key factor in answering the questions such as:

Why there is a drop in sales in certain regions?

Where the excess inventory is kept, and monitoring the customer perception on the social media platforms.

Maamar Ferkoun emphasizes the role of BI in providing both retrospective and real-time insights into organizational operations.  He also describes a broad range of technologies that are used in this process that include analytics, reporting, data mining and predictive analytics. Thanks to timely analysis of the business environment, companies are able to leverage their BI capabilities to develop data-driven strategies that can improve their overall business performance.

Data-driven organizations are the end goal of BI.  It helps to build data-centric entities and thus boost performance and gain a competitive edge. Organizations which are using BI can use ROI (Return on Investment) optimally by truly understanding their operations and wisely allocating their resources in comparison with long-term objectives.

  • BI gives businesses an edge in understanding customer behavior, interests and emerging trends.
  • Moreover, BI maintains a watchful eye over business operations, allowing for prompt interventions and improvements that are backed by data-driven insights.
  • It is involved in the strengthening of supply chain management practices by monitoring activities across the supply chain eco-system and encouraging open communication with partners and suppliers.
  • Through BI-enabled insights, organizations can achieve the goal of having a more streamlined supply chain, which in turn helps them to mitigate bottlenecks and enhance overall efficiency.
  • BI enables organizations to sail through business environments that are dynamic and sharp with the needed agility and precision.

How does Business Intelligence Work?

The working mechanism of Business Intelligence (BI) is a systematic process that is supported by dedicated platforms, while the data warehouse is the foundation of the information system, used as the repository for fundamental information.

The data warehouses are the ones that combine data streams from different sources into a single, centralized system which simplifies the business analytics and reporting. Within this framework, BI software communicates with the data warehouse. This allows it to run queries for the extraction of critical insights.  In turn, these insights are presented to the users in the form of reports, charts and maps.

Online analytical processing (OLAP) is usually integrated into a data warehouse and allows for multidimensional queries; providing fine-grained analysis of datasets.

One of the main benefits of OLAP is the guarantee of the consistency of the data and calculations that help to improve the quality of a product, customer interactions and operational efficiency.

Advancements in BI solutions today might involve Hadoop to directly extract and ingest raw data, but data warehouses continue to be the main source of data in many cases. The long-standing dominance of data warehouses clearly points to their central position in providing the first-line data infrastructure base that is critical to BI operations.

Final Thoughts:

This fact cannot be denied that business today is all about data, and BI is your gate to the power of information. Through BI, you will be able to work with the data that you have and the data that you can collect and be able to make informed decisions, optimize your operations and gain an edge over your competitors. Do not forget that BI is not only about technology, it is about the shift toward a data-centric vision. As you incorporate BI into your business, make sure you promote a culture of data discovery, and allow all levels of employees to benefit from its insights. BI is full of possibilities. Therefore, you need to start making the right decisions today.

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