What is Business Intelligence – and Can Your Company Benefit?
“Business intelligence” has become a hot buzzword in management circles recently. But what exactly does this term mean? CIO.com defines business intelligence as the “leveraging of software and services to transform data into actionable intelligence that informs an organization’s strategic and tactical business decisions.”1
More specifically, business intelligence — also sometimes referred to as descriptive analytics — accesses and analyzes data sets and presents analytical findings in a wide range of different formats, notes CIO.com. These include charts, maps, graphs, reports, summaries and, perhaps most notably, dashboards to provide owners and entrepreneurs with detailed information about their business enterprises.
Business Intelligence vs. Business Analytics: What’s the Difference?
It’s common for business intelligence (BI) to be confused with business analytics (BA). One way to understand the difference is to realize that business intelligence is more focused on scrutinizing past results and the current state of the business. In contrast, business analytics uses technologically advanced software to try to predict what will happen in the future — a process referred to as predictive analytics. It also uses technology to try to predict what could happen in the future if certain actions are taken — a process referred to as prescriptive analytics.1
While BI isn’t necessarily future-focused, this doesn’t mean that owners and entrepreneurs can’t gain tremendous value from practicing business intelligence. BI is particularly helpful when it comes to examining data to better understand current trends and gain more insights. BI makes it easier for managers to obtain data required for them to make better business decisions.
BI tools and capabilities can be especially helpful in supply chain management — for example, by helping organizations find the source of supply chain delays and variations in shipping processes. By using business intelligence tools and processes, you can determine not only where delays are occurring, but also the kinds of shipping and transportation modes that are causing delays.
Common Business Intelligence Tools
BI platforms are usually chosen based on such factors as the size and complexity of the organization and the company’s existing technology platform. Among the high-end BI tools are Cognos, Hyperion and SAS. But these tools are expensive and generally only available to large organizations.
Other popular BI tools accessible to middle-market and smaller companies include Zoomdata, Information Builders, Qlik, Tableau, Sisense and the Microsoft “Power Suite” that consists of Power Query, Power Pivot and Power BI. With the Microsoft Power Suite, any business that has Excel 2010 or newer has access to a full-fledged business intelligence tool.
Modern business intelligence tools and applications have expanded the world of BI beyond just the IT department to include employees across the whole organization. These employees can use BI to more easily analyze business data faster and more thoroughly while gaining insight into fast-changing dynamics. Meanwhile, the IT department continues to use classic business intelligence tools to generate a wide range of financial and regulatory reports.
Software vendors, meanwhile, are re-engineering BI offerings and platforms by adding multiple functionalities so they can be used company wide. Even with so-called “self-service” BI, however, the IT department will continue to play a key role by managing governance, policies and access to critical business data.
Is Business Intelligence Still Relevant?
With so much focus today on big data, advanced analytics and artificial intelligence (or AI), some have begun to question the relevance of business intelligence, at least when looking ahead to the future. But there’s no question that BI not only remains relevant today – it will remain relevant for many years to come.
One of the biggest challenges faced by many organizations when it comes to successfully implementing business intelligence initiatives is getting a handle on their data, so they can get the most bang out of their BI bucks. For example, instead of having one BI platform across the enterprise, many organizations have isolated pockets of business intelligence capabilities. One of the biggest keys to successful BI implementation is the adoption of business intelligence tools across the entire enterprise, instead of in isolated silos.
And despite the importance of predictive and prescriptive analytics, it’s just as important that organizations keenly understand what has happened in the past — and what’s happening right now. Also, business intelligence can help confirm and validate the accuracy and relevance of data generated by these advanced analytics tools.
Concluding Thoughts
Business intelligence (or BI) has become a hot buzzword in management circles recently. BI accesses and analyzes data sets and presents analytical findings in a wide range of different formats to help improve business decision-making. Different from business analytics, BI is particularly helpful when it comes to examining data to better understand current trends and gain greater business insights. An outsourced CFO services provider can help you implement business intelligence capabilities and tools at your organization.
1 What is BI? Business intelligence strategies and solutions; Mary K. Pratt; CIO.com; September 1, 2017
www.cio.com/article/2439504/business-intelligence/business-intelligence-definition-and-solutions.html
Arthur F. Rothberg, Managing Director, CFO Edge, LLC
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