Business Intelligence 101
By Robert Flanglin |
The goal of every business is to be successful by gaining new customers and
retaining old customers. A crucial way of achieving this end is through
“Business Intelligence.” Business intelligence is also known as simply BI.
Business intelligence can be defined as a process of collecting information in
the area of business. An essential idea of business is that data is enhanced
into information and then into knowledge. Business use BI to gain an advantage
in the marketplace by understanding their customer’s needs, customer’s
decision-making processes, and economic, cultural, and technological trends.
Business intelligence involves analyzing not only the customer but the entire
industry as a whole. Finally, business intelligence is driven by a goal set by
the company. The goal can be short term or long term.
History of
Business Intelligence
Business intelligence was first referred
to in Sun Tzu’s “Art of War.” Tzu claimed that in order to win a war you had to
have complete knowledge and understand of your strengths and weaknesses as well
as those of your enemy. This is the core idea behind modern business
intelligence. A company must know itself better than anyone else, and know its
customers and competitors better than anyone else. It is ironic how much
business and warfare are alike. In BI, one must sift through heaps of data (both
external and internal) for management to then device strategies for marketing
and where to take the business.
Key Performance
Indicators
In BI, the present state of business is assessed by
the use of Key Performance Indicators (KPI). Data is becoming available to
businesses faster as more organizations implement KPI. In the past, data was
available after one or two months, which did not help businesses adjust their
strategies in a timely manner. More recently, however, banks have tried to make
data available sooner and with shorter intervals, especially for businesses that
have higher operational/credit risk loading (I.E. wealth management and credit
cards). Some companies can get data weekly, which helps them adjust their
strategies more efficiently than ever before.
Business
Intelligence Tools
Business intelligence involves collecting
quite a bit of information and analyzing it. Many business use tools to achieve
this. A few of the data tools are data modeling, data warehouses, and data
mining. Data tools help employees collect the data and analyze it efficiently.
Data tools are for organizational purposes mostly. Online Analytical Processing
(OLAP) is used in the analyzing process. OLAP is sometimes simply referred to as
Analytics, which is based on the hypercube or “cube” and dimensional analysis.
Some businesses also use software vendors for BI tools. There are quite
a few enterprises offering BI technology. If a business does not get the BI
tools themselves, then software vendor will provide a business with tools, and
sometimes software support and BI professionals who will help the company
analyze results and collect data. Some companies providing BI software are
Siebel Systems, Microsoft, Altius Consulting, Business-Soft, and SAS Institute.
Conclusion
Businesses understand that knowing
the customer is the key to success. Business intelligence is the path through
which a business can collect data about the customer and analyze it. Business
intelligence is also about knowing the market, including competitors and market
trends. A business that has the most accurate understanding of its marketplace
will be more adequately prepared for the continual changes that inevitable occur
in markets. Business intelligence is an important concept for any company to
understand, because it will help them to gain new customers, retain old
customers, and see a positive ROI.
About the Author
Robert
Flanglin is facinated by business topics and enjoys writing about them. Robert
Flanglin writes articles mostly concerning Business Intelligence.
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