Most people are familiar with the term “business intelligence.” However, with a distorted reputation as a buzzword and a definition that evolves as frequently as the technology that supports it, the meaning of business intelligence can sometimes become diluted or confused.

In this article, we discuss what, exactly, business intelligence is, as well as its importance in business.

What is Business Intelligence?

Business intelligence is the use of data and analytics to provide actionable business insights. It combines historical and current business data, industry and economic knowledge, and comprehensive analytics. The result of business intelligence is data-backed, at-a-glance information that answers important business questions and informs critical business decisions.

In simplest terms, business intelligence is the process of collecting, storing, and analyzing data from business activities. This information is then presented (usually by a BI platform) in a way that allows stakeholders to see actionable information at a glance.

There are several types of business intelligence systems and processes available, and each can–and should–be modified to meet a company’s specific needs. Typically, it includes the following capabilities:

  • Data Mining. Your business intelligence system will be able to sort through connected databases to find, identify, and organize information to use for business intelligence purposes.
  • Reporting & Data Visualization. Even though you may have a data expert helping to set up and run your business intelligence platform, your company’s C-suite will require a way to view at-a-glance actionable data from which to draw conclusions and take action. Part of any BI platform will include intelligent reporting and data visualization.
  • Benchmarking. While current data is essential, data compared to historical or projected data sets provides a more actionable performance metric. Your business intelligence platform should allow benchmarking against previous data and performance goals, and may even be able to benchmark against industry standards.
  • Querying. Querying is the ability to “ask” the data a question to receive an answer. In more detailed terms, it’s the ability to easily and effectively filter data to achieve an answer to a question.
  • Statistical & Descriptive Analysis. The purpose of business intelligence goes well beyond data culmination. BI systems will also provide analytics to explore trends, how they happened, and why.

Why is Business Intelligence Important for Businesses?

Business intelligence is important for businesses because it provides important, detailed, actionable insights to improve business efficiency and performance. It allows companies to:

  • Track performance
  • View current progress related to performance trends
  • Identify & resolve challenges more quickly
  • Make adjustments to improve profitability
  • Optimize operations for efficiency
  • Analyze customer behavior trends
  • Benchmark data against competitor & industry trends
  • More strategically plan for success

How is Business Intelligence Different from Data Analytics?

Business intelligence can sometimes be confused with data analytics. While both include the collection and analysis of information, data analytics is only a part of business intelligence. Business intelligence takes data analytics several steps further, transforming basic data and analysis into actionable data.

Business intelligence is designed to answer specific questions and provide at-a-glance information to inform business actions. Data analytics helps to support this process, but is only a part of the process.

Final Thoughts

Businesses of all sizes can benefit from business intelligence, but not all companies can afford the in-house expertise and resources to establish a simple, easy-to-use platform. If you’re interested in upgrading your company’s intelligence and analytics, reach out. We’re happy to provide a free strategy consultation.

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