What Is Business Intelligence, And How Does It Work?
The term business intelligence can be defined in simple terms as transforming data into business insights. It encompasses the strategies and technologies that are used by enterprises to analyse business information for the best possible results.
BI technologies reveal historical, current, and predictive views of business operations. Business intelligence software has a sound impact on an organization’s strategic, tactical, and operational business decisions. Here’s how business intelligence works, illustrated in the following 3 simple stages:
Stage 1- First of all, the raw data is collected from corporate databases. The data could be spread across several heterogeneous systems.
Stage 2- The next stage is to clean and transform collected information into the data warehouse. Appropriate data tables can be created and linked as per the goal of the data collected. For example, data can be collected for information, advertisement, future project assessment, and/or sales.
Step 3- The BI system user can ask queries, request reports, or conduct any other analysis as per requirement relatively faster than traditional business analysis without a BI system.
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Business Analytics In Brief
Business analytics is a process of combining the methodologies or tools for data analysis, which help the management of businesses to make a well thought and researched decision based on the facts for the best possible results.
Business Intelligence and analytics software and systems provide options that include comprehensive platforms, embedded software applications, data visualization, location intelligence software, and self-service software built for non-tech users.
Business intelligence tools analyze the data sets and provide the analytical findings in reports, graphs, charts, summaries, and dashboards to provide users with detailed intelligence about the scenario of the business.
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Evolution Of Business Intelligence And Analytical Reporting
In 1865, Richard Millar Devens coined the term Business Intelligence in the context of a certain banker. Using business intelligence services, the banker was rapidly maximizing profits by making decisions based on information collected in advance.
History suggests that early humans would use stones and sticks to help predict the sales trends of new inventions. Then, later used various forms of materials to store the data like paper and books and analyze the data to make fruitful decisions.
In fact, BI is becoming easier to use as the technology progresses like using computers and software. It is moving to the cloud and is becoming embedded in broader CRM software and ERP software suites, and it is encompassing AI and machine learning currently.
According to 2020 market share numbers from IDC, the total worldwide business intelligence and analytics market hit $19.2 billion despite pandemic-related economic situations.
Although BI cannot really tell the users what to do or predict the future if they take a certain course of action. BI is not only about generating the reports but also provides a way for people to analyze the data and understand trends to make concrete business decisions.
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Business Intelligence And Analytical Reporting: Past
Using data to make data-driven decisions can be traced back to ancient times, when people collected the data and analyzed it manually to make the best decisions for the business.
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Business Intelligence And Analytical Reporting: Present
Enterprises are flooded with data these days, as there is a large volume of data related to customers, suppliers, products, and business partners which have never been so extensive but are still important. Data mining is more effective at collecting information at scale, and data warehouses are better at storage. Effective management and utilization of this data often require specialized expertise, making Data Warehousing Consulting essential for businesses.
The current modern BI tools using computers and software matter precisely, because they promise to make real sense of the data and uncover the insights within through strategic methods like reverse ETL that are very important to winning in the market share.
While the predictions and advice derived from business analytics require data science professionals to analyze and interpret, the primary goal of the BI is that it should be easy for non-technical end-users to dive into the data and create new reports.
In the past, IT professionals had been the primary users of BI software. However, BI tools have advanced to be more user-friendly and also enable a large number of users across organizational domains. Nevertheless, because, BI is essential to making strategic business decisions, some of organization still struggle to figure out and implement effective BI strategies. This leads to poor data practices, factual mistakes, etc.
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BI And Analytical Reporting: Future
The future of the BI and Analytical reporting is of self-service of BI and Analytical reporting. The drive is to make it possible for just anyone to get useful information out of business intelligence tools by people who are relatively from a non-technical background. Business intelligence and analytics software use artificial intelligence and machine learning to make accurate and faster results. Moreover, these self-service BI tools help organizations make internal data reports easily available. A certain amount of training will be required, but if the advantages of the tools are high when compared to the training costs, employees will be eager to get on board.
A wide variety of tools fall under business intelligence.
- Dashboards
- Visualizations
- Reporting
- Data mining
- OLAP (online analytical processing)
Tableau, is more of a self-service analytics solution that provides data visualization and can also help integrate with Microsoft Azure SQL Data Warehouse and Excel
- Splunk, is a “guided analytics platform” that is capable to provide enterprise-grade BI and business analysis services
- Alteryx, can blend analytics from a wide range of sources to simplify the workflows as well as provide BI insights
- Qlik, which is into data visualization, BI, and analytics, help in providing a scalable BI platform
Summing it Up
Business intelligence tools analyze the data sets and provide the analytical findings in reports, graphs, charts, combo charts, summaries, and dashboards to provide users with detailed intelligence about the scenario of the business. BI, data, and analytics have evolved a lot over the last few years. With the right data and analytical reports, an organization can optimize its performance by focusing on its vision and boosting efficiency across the business.
