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What is BI? – The Definition of Business Intelligence

  |   Business Intelligence

What is BI? – The Definition of Business Intelligence


In today’s competitive business landscape, making informed decisions based on accurate and timely information is crucial for success. This is where Business Intelligence (BI) comes into play. In this blog post, we will delve into the world of BI, starting with the definition of Business Intelligence, exploring its main role, and discussing the various solutions for small businesses available to drive business growth.

What is the definition of Business Intelligence?

Business Intelligence (BI) is a discipline that revolves around transforming raw data into actionable insights and making business information accessible to every decision maker – no matter if C-level, Sales, Logistics, or Marketing – in order for them to make fast and precise data-driven business decisions. Its main role is to provide organizations with a comprehensive view of their operations, helping them gain a competitive edge by identifying trends, patterns, and opportunities.

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Graphic 1: The Business Intelligence Process from Data Extraction to Data Visualization

What is the difference between Business Intelligence and Business Analytics?

Business Intelligence (BI) focuses on historical and current data analysis to understand business performance, identify trends, and support decision-making. Business Analytics (BA) goes beyond by utilizing advanced techniques to explore patterns, relationships, and future trends. BI provides insights into “what happened” and “why,” while BA predicts “what might happen” and “what should be done.” Both play vital roles, with BI offering historical insights and BA providing predictive and prescriptive insights. Together, they enable data-driven decision-making, uncover actionable insights, and drive business success.

Even though Business Intelligence and Artificial Intelligence share the common term ‘Intelligence’, they are two distinct concepts. As already mentioned, BI involves analyzing historical and current data to gain insights and support decision-making. AI, on the other hand, involves the development of intelligent machines that can perform tasks that typically require human intelligence. Artificial Intelligence can be rather seen as a complementary concept for Business Analytics, using advanced AI capabilities such as machine learning, natural language processing, and predictive modelling.

Is Business Intelligence Artificial Intelligence (AI)?

Is Business Intelligence Artificial Intelligence (AI)?

Even though Business Intelligence and Artificial Intelligence share the common term ‘Intelligence’, they are two distinct concepts. As already mentioned, BI involves analyzing historical and current data to gain insights and support decision-making. AI, on the other hand, involves the development of intelligent machines that can perform tasks that typically require human intelligence. Artificial Intelligence can be rather seen as a complementary concept for Business Analytics, using advanced AI capabilities such as machine learning, natural language processing, and predictive modelling.

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Graphic 2: BI, BA and AI connected through Data

What components does the Business Intelligence process consist of?

Having data visually prepared and only one click away in order to make fast business decisions sounds great, but what does the process look like in order to get there? Setting up a robust Business Intelligence (BI) structure involves four key elements: data extraction, data transformation, data storage, and data visualization.

Data Extraction

This involves gathering relevant data from various sources such as databases, spreadsheets, or APIs. The data extraction process ensures that the necessary information is collected and prepared for analysis.

Data Transformation

Once the data is extracted, it often requires cleaning, filtering, and formatting to ensure its accuracy and consistency. Data transformation involves converting raw data into a structured format that can be easily analyzed and utilized for decision-making.

Data Storage

After the data is transformed, it needs to be stored in a secure and efficient manner. This typically involves using a data warehouse, data lake, or database management system. The chosen storage solution should accommodate the volume, velocity, and variety of the data being collected.

Data Visualization

The final element is presenting the data in a visually appealing and intuitive manner. BI reporting tools and techniques enable users to explore and interpret information effectively through charts, graphs, dashboards, and reports. This enhances decision-making by providing clear insights and trends.

What are the benefits of Business Intelligence?

While implementing a Business Intelligence (BI) process may require some time and effort, the benefits it brings far outweigh the initial investment.

By adopting BI, you gain the ability to transform your raw data into valuable insights and make data-driven decisions with confidence. With BI, you can uncover patterns, trends, and correlations within your data, allowing you to identify opportunities, optimize operations, and improve overall business performance. BI empowers you to monitor key metrics, track progress, and measure the impact of your strategies and initiatives. It enables you to gain a competitive edge by staying informed about market trends, customer behaviour, and industry developments. Additionally, BI provides you with the agility and flexibility to adapt to changing business conditions, make informed forecasts, and proactively address challenges. Ultimately, implementing BI allows you to unlock the full potential of your data, enhance decision-making capabilities, and drive sustainable growth for your organization.

Better Decision-Making

Cost Saving

Competitive Advantage

Better Forecasting

BI for small businesses – How do I implement Business Intelligence in my company?

Examining the definition of Business Intelligence, it is evident that Business Intelligence is not limited to large enterprises; it is equally valuable for small businesses seeking a competitive edge. Every company, depending on its business nature, size as well as the level of digitalization, possesses a specific number of data sources and underlying complexity. So there is no one-fits-all Business Intelligence solution or Business Intelligence software which can be implemented right away without a proper analysis of the current data structure and business needs. It’s important to clarify that when we talk about Business Intelligence tools, they are not a comprehensive solution that encompasses all the steps involved in implementing a complete BI system. Business Intelligence tools, such as Amazon QuickSight or Power BI, primarily serve as powerful data visualization tools. These tools facilitate the analysis and interpretation of data, but they do not cover the entire spectrum of data extraction, transformation, storage, and other aspects required for a complete BI system.

Setting up a Business Intelligence structure and an effective Business Intelligence Strategy requires time and experience. Most small- and medium-sized companies need external support because of the lack of resources as well as insufficient knowledge in-house. We specialize in offering end-to-end Business Intelligence solutions, tailored to the dynamic and fast-changing environment of smaller-sized companies. We work with you to choose the right tools based on your specific needs and budget, providing continuous support before, during, and after the project. Additionally, we offer personalized training sessions, empowering you to independently navigate and utilize your business intelligence strategy and tools effectively.

Conclusion

In conclusion, Business Intelligence (BI) is an indispensable tool in today’s fiercely competitive business environment, enabling organizations of all sizes to thrive by harnessing the power of data. By exploring the definition of Business Intelligence, its role, and the distinction between BI and Business Analytics, we’ve gained a comprehensive understanding of how BI works.

The BI process comprises key components like data extraction, transformation, storage, and visualization, ensuring that data is accessible, accurate, and actionable. The benefits of BI are significant, including better decision-making, cost savings, a competitive edge, and improved forecasting.

Crucially, Business Intelligence is not restricted to large enterprises. It is equally valuable for small businesses aiming to gain a competitive edge. While implementing BI may seem complex, especially for smaller-sized companies, there are solutions and external support available to guide you through the process, ensuring that you can leverage BI tools effectively to drive your business growth. With the right guidance and tailored solutions, small businesses can harness the power of BI to make informed decisions, optimize operations, and adapt to changing market dynamics, ultimately propelling them toward sustainable growth and success.

CURIOUS ABOUT WHAT YOUR JOURNEY COULD LOOK LIKE?

Tired of just a theoretical definition of Business Intelligence? Well, it’s time to dive into the real-world impact of our services. Welcome to our case studies and hypothetical stories, where we take you on a journey into a world of endless possibilities. In this creative space, we craft scenarios that illustrate how our Business Intelligence services can be applied in practical situations. Discover how we blend challenges with cutting-edge technology to achieve remarkable outcomes. Explore all the thrilling opportunities that await when you partner with us, and witness firsthand how we can help you turn data into action.

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