What is Business Intelligence (BI)

Business Intelligence is the key to the success of the enterprise. BI provides real-time reporting on the state of the business at any given time, including sales, production, profits, and losses.

Businesses organizations can create a massive amount of data on a daily basis. This data represents a record of daily operations and how they affect an organization. Data can include information about inventory usage, resource allocation, financial information and more.

Business Intelligence (BI) refers to any number of tools and methods that an organization can use to access this data and analyze it in order to make decisions about how an organization is performing or should be performing.

Business Intelligence is most effective when internal data is combined with external market data to develop strategies and goals for the future operation of an organization. Business Intelligence can be compared to Military Intelligence. It gives the decision makers, or commanders, a real-time view of the battlefield and what their various options are, as well as the pros and cons and probable effects of exercising each option.

How Business Intelligence works in today’s world

  1. Understanding how Business Intelligence works in today’s world of business is best accomplished with knowledge of the history of Business Intelligence itself.
  2. A business operation in the 1980’s included data entry from accounting operations, order entry and manufacturing operations. The data from these operations was reported weekly, monthly, quarterly and yearly.
  3. The management of resources began to become automated, first with Manufacturing Resource Planning (MRP) then Enterprise Resource Planning (ERP) systems that combined the management of manufacturing resources, accounting and sales force operations.
  4. These software based solutions were capable of storing – and did on a daily basis – large amounts of data that had to be mined and filtered in order to gain usable intelligence.

The amount of data that was stored sometimes made simple queries into massive data analysis problems that were prone to shutting down critical operations as the system dealt with the query. Often times the results of the query contained so much data that it was impossible to interpret. This problem led to the practice of copying Business Intelligence data to dedicated data storage “warehouses”, where queries could run without interfering with the rest of the system or the original data. Dedicated “data miners” were used to handle simple and complex queries, zeroing in on just the results that were relevant. Business Intelligence systems now focus on two primary functions: The querying of data and the reporting of results. Rather than running batches of data at the end of the day or on a weekend, a system needs to be capable of querying data in an almost real-time environment in order to report the most relevant results.

BI systems now also have a source of data that was not present in the 1980’s and 90’s, and data is generated by interfacing with customers over the internet. In order to bring customer data into the intelligence gathering, Customer Relationship Modules (CRMs) were added to business intelligence systems, and became an important sales resource, as well a source of information about quality.

BI systems can be generally placed into one of two categories: those that are model-driven and those that are data-driven.

  • Model-driven business intelligence utilizes analytics to provide sales, production, and cash flow forecasting, the running of optimization algorithms and simulations, and analysis of decision trees to identify optimum performance solutions. This approach to BI focuses on information processes and analytics that can be either simple or difficult to interpret.
  • Data-driven BI also utilizes analytics, but it is focused on storing and mining large pools of data in data warehouses and databases. This approach to BI can result in large amounts of technical data or reports that can only be interpreted by certain individuals in an organization.

BI Dashboard

The early forms of business intelligence BI utilized a “dashboard” to give the uppermost levels of management a graphical picture of key performance indicators for an organization. A dashboard could consist of an onscreen set of charts, graphs, or even raw data that could be used to indicate how the different components of an organization were performing at one particular point in time, or snapshot.

Modern Business Intelligence

Modern BI systems utilize dashboards that can be customized to fit individual lower level managers. A manager in charge of installing glass in windows on a production line may have a dashboard view of the number of inbound glass deliveries, window frames coming off of the assembly line, number of pieces of glass that are currently being installed per hour and managers have a dashboard that indicates the number of window frames to be cut, the feet of framing material available and the average saw time per piece.


Modern Business Intelligence techniques can take raw data and turn it into graphical information that can be used to make decisions that optimize performance at the lowest levels of an organization’s management structure.

 Features of Business Intelligence (BI)

1. Business Intelligence systems can be expensive to implement and use. Many organizations utilize professional consultants to guide them through the implementation process and to provide ongoing advice on the use of the system.

2. A consultant observes and analyzes the organizational management, its structure, and the existing data to make recommendations for an adequate BI system.

3. One of the most critical factors in implementing a BI solution is the staff’s absolute commitment to both its use and the accuracy of the data is collected and reported.

4. The commitment to maintaining a BI system starts at the uppermost levels of an organization’s management structure and is filtered down through lower levels of management as a culture. The successful implementation and use of BI also require both initial and ongoing training for managers and employees.

5. Many Business Intelligence systems are implemented successfully in organizations. Business intelligence (BI) system provides the analytics data that it collects and analyzes the performance of organizations