Business Intelligence 101
Business intelligence has become an increasingly popular field of technology, as it offers companies the ability to uncover insights from data and use them to make more informed decisions.
In this article, we will provide an overview of business intelligence and discuss the key components, as well as why it is important for businesses to consider incorporating it into their operations.
What is Business Intelligence?
Business intelligence, or BI, is the practice of turning data into insight and knowledge for business decision-making. Business intelligence spans a variety of technologies and techniques used to access, discover, and analyze company data.
It identifies trends and patterns, forecast future scenarios, and supports strategic decision-making. This is the key difference. Traditionally, managers use data to get a snapshot of what has already happened. But what differentiates BI is that it can also predict future events. Business intelligence can be applied across all industries, with companies from a range of verticals benefitting from its use.
Overall, the importance of business intelligence lies in the value of data. Data is an organization’s most valuable asset, and BI tools give you the ability to analyze that data to make smarter decisions. Data is worthless until it’s been analyzed and turned into information that can be used to make better decisions. BI tools are designed to do that.
Components of Business Intelligence
Here are some of the main components of business intelligence:
Data Warehousing: Data warehouses are the central storehouse for all the enterprise data that is leveraged by the various BI tools. They are repositories that contain all the data used by the organization — structured and unstructured data — and make it accessible for use in analytics and reporting applications.
Reporting and visualization tools: Reporting and visualization tools create and publish reports, as well as create charts, graphs, and visualizations from data. Excel and Tableau are two common examples of reporting and visualization tools.
Data mining: Data mining is the process of discovering patterns and meaning from large data sets. It can uncover insights from data, as well as identify new relations and correlations between data points. Data mining software performs data mining tasks, including predictive modeling and pattern recognition.
Data management: Data management tools design and manage the database, data warehouse, and other data-related systems. They also allow users to create and manage data extracts and data feeds.
Master Data Management (MDM): MDM tools manage a single view of the customer, product, or any other entity. They allow users to create a single, consistent view of the data to allow the data across departments and systems.
Benefits of Business Intelligence
There are hundreds of benefits to leveraging business intelligence tools in an organization. Here are some of the key reasons to use BI:
Types of Business Intelligence
There are several types of business intelligence that perform different functions. Here are the differences between them:
Traditional Business Intelligence: Traditional business intelligence refers to data that is used to create long-term forecasts and strategic plans. These forecasts are often based on data from previous years, and they are used to predict future trends in the marketplace.
Operational Business Intelligence: Operational business intelligence refers to data that is used to make operational decisions. This data is often time-sensitive and responds to events in real-time and drives operational efficiency.
Predictive Business Intelligence: Predictive business intelligence forecasts future outcomes and makes predictions based on current data. Predictive business intelligence uses advanced algorithms and machine learning to predict future trends, as well as identify risks.
Business Intelligence Methodologies
Here are some of the common methodologies to extract insights from data in business intelligence:
Challenges of Business Intelligence
Despite its numerous benefits, there tend to be challenges that organizations face when implementing business intelligence:
Data Quality: The most significant challenge businesses will face when implementing BI is ensuring that the data they use is accurate and complete. Data is the foundation of business intelligence, and if it is not accurate, businesses will not be able to make decisions based on it accurately.
Infrastructure: Another challenge businesses will face when implementing BI is ensuring that the infrastructure is able to handle the additional data and workload. Businesses may need to update their infrastructure to support the data volumes, connectivity, or security.
Data Governance: Businesses that implement BI are likely to produce a significant amount of data. Business analysts need to manage and govern this data to ensure that it is secure and usable.
Data Preparation: To create accurate and useful insights, analysts must first prepare data. This may include cleaning, organizing, and eliminating irrelevant data. This can be a time-consuming and challenging task that requires significant resources.
Data Standards: To ensure that the data across the organization is consistent, businesses must enforce data standards. This will allow for consistent analysis and the ability to compare data across departments and systems.
Data Discovery and Cleanup: Before analysts can use data, they must first discover it and clean it up. This often requires significant resources, and it can be an extremely challenging task.
Business Intelligence Strategies
Business intelligence strategies are crucial to any successful implementation of business intelligence. Successfully implementing a business intelligence strategy will rely on having clear objectives and a plan for achieving them.
Before implementing a business intelligence strategy, it is important to decide what you want to achieve and identify the data that you require to do so. There are three main business intelligence strategies that can be used to achieve these objectives.
- Analytics: This strategy leverages data to uncover insights and identify patterns that can help drive better business decisions. Analytics supports a wide range of business activities, including marketing, sales, and operations.
- Reporting: Reporting refers to the production of static data in a regular, structured format. This data can answer specific questions about a business’s past performance.
- Visualization: Visualization is the process of turning raw data into engaging visual representations to help drive action and improve decision-making.
Getting Started with Business Intelligence
The first step towards implementing a successful business intelligence strategy is to choose the right tools. The best tools will be tailored to your specific needs, offer a wide range of capabilities, and make it easy to adopt and implement them across the business.
Once you have selected the right tools for your business, you have to acquire the data to drive insights. Successfully implementing a business intelligence strategy will rely on having clear objectives and a plan for achieving them.
Before implementing a business intelligence strategy, it is important to decide what you want to achieve and identify the data that you require to do so. This can be done by conducting a data discovery exercise or audit. It is also important to understand the data that you already have to determine whether it will be useful to your business and will actually be actionable.
Business Intelligence Courses
Business intelligence courses provide students with a foundational understanding of the field of business intelligence, as well as the skills and knowledge required to implement it in the workplace. These courses are primarily aimed at professionals in a range of different industries, including marketing, sales, IT, and finance.
Business intelligence courses often cover a range of topics, including the definition of business intelligence, the importance of data in the business environment, and the tools and technologies used to acquire and analyze data. Here are some of the top business intelligence courses that we recommend:
- The 5 Best PowerBI Courses and Certification Online
- Business Analytics Courses for Online Learning
- Tableau Certification and Courses Online
Business intelligence is a broad and rapidly evolving area of technology, with a range of tools, techniques, and processes used to acquire and analyze data.
This data can drive better business decisions and improve operational efficiency. By understanding the basics of business intelligence, companies can harness the power of data to maximize their potential.