BUSINESS INTELLIGENCE

What is Business Intelligence?

BI(Business Intelligence) is a set of processes, architectures, and technologies that convert raw data into meaningful information that drives profitable business actions.It is a suite of software and services to transform data into actionable intelligence and knowledge.

BI has a direct impact on organization's strategic, tactical and operational business decisions. BI supports fact-based decision making using historical data rather than assumptions and gut feeling.

BI tools perform data analysis and create reports, summaries, dashboards, maps, graphs, and charts to provide users with detailed intelligence about the nature of the business.

Why is BI important?

    • Measurement: creating KPI (Key Performance Indicators) based on historic data<
    • Identify and set benchmarks for varied processes.
    • With BI systems organizations can identify market trends and spot business problems that need to be addressed.
    • BI helps on data visualization that enhances the data quality and thereby the quality of decision making.
    • BI systems can be used not just by enterprises but SME (Small and Medium Enterprises)

How Business Intelligence systems are implemented?

Step 1) Raw Data from corporate databases is extracted. The data could be spread across multiple systems heterogeneous systems.

Step 2) The data is cleaned and transformed into the data warehouse. The table can be linked, and data cubes are formed.

Step 3) Using BI system the user can ask quires, request ad-hoc reports or conduct any other analysis.

Examples of Business Intelligence System used in Practice

Example 1:

In an Online Transaction Processing (OLTP) system information that could be fed into product database could be

    • add a product line
    • change a product price

Correspondingly, in a Business Intelligence system query that would beexecuted for the product subject area could be did the addition of new product line or change in product price increase revenues

In an advertising database of OLTP system query that could be executed

    • Changed in advertisement options
    • Increase radio budget

Correspondigly, in BI system query that could be executed would be how many new clients added due to change in radio budget

In OLTP system dealing with customer demographic data bases data that could be fed would be

    • increase customer credit limit
    • change in customer salary level

Correspondingly in the OLAP system query that could be executed would be can customer profile changes support support higher product price

Example 2:

A hotel owner uses BI analytical applications to gather statistical information regarding average occupancy and room rate. It helps to find aggregate revenue generated per room.

It also collects statistics on market share and data from customer surveys from each hotel to decides its competitive position in various markets.

By analyzing these trends year by year, month by month and day by day helps management to offer discounts on room rentals.

Example 3:

A bank gives branch managers access to BI applications. It helps branch manager to determine who are the most profitable customers and which customers they should work on.

The use of BI tools frees information technology staff from the task of generating analytical reports for the departments. It also gives department personnel access to a richer data source.

Four types of BI users

Following given are the four key players who are used Business Intelligence System:

1. The Professional Data Analyst:

The data analyst is a statistician who always needs to drill deep down into data. BI system helps them to get fresh insights to develop unique business strategies.

2. The IT users:

The IT user also plays a dominant role in maintaining the BI infrastructure.

3. The head of the company:

CEO or CXO can increase the profit of their business by improving operational efficiency in their business.

4. The Business Users"

Business intelligence users can be found from across the organization. There are mainly two types of business users

    1. Casual business intelligence user
    1. The power user.

The difference between both of them is that a power user has the capability of working with complex data sets, while the casual user need will make him use dashboards to evaluate predefined sets of data.

Advantages of Business Intelligence

Here are some of the advantages of using Business Intelligence System:

1. Boost productivity

With a BI program, It is possible for businesses to create reports with a single click thus saves lots of time and resources. It also allows employees to be more productive on their tasks.

2. To improve visibility

BI also helps to improve the visibility of these processes and make it possible to identify any areas which need attention.

3. Fix Accountability

BI system assigns accountability in the organization as there must be someone who should own accountability and ownership for the organization's performance against its set goals.

4. It gives a bird's eye view:

BI system also helps organizations as decision makers get an overall bird's eye view through typical BI features like dashboards and scorecards.

5. It streamlines business processes:

BI takes out all complexity associated with business processes. It also automates analytics by offering predictive analysis, computer modeling, benchmarking and other methodologies.

6. It allows for easy analytics.

BI software has democratized its usage, allowing even nontechnical or non-analysts users to collect and process data quickly. This also allows putting the power of analytics from the hand's many people.

BI System Disadvantages

1. Cost:

Business intelligence can prove costly for small as well as for medium-sized enterprises. The use of such type of system may be expensive for routine business transactions.

2. Complexity:

Another drawback of BI is its complexity in implementation of datawarehouse. It can be so complex that it can make business techniques rigid to deal with.

3. Limited use

Like all improved technologies, BI was first established keeping in consideration the buying competence of rich firms. Therefore, BI system is yet not affordable for many small and medium size companies.

4. Time Consuming Implementation

It takes almost one and half year for data warehousing system to be completely implemented. Therefore, it is a time-consuming process.

Business intelligence software and systems

A variety of different types of tools fall under the business intelligence umbrella. The software selection service SelectHub breaks down some of the most important categories and features:

    • Dashboards
    • Visualizations
    • Reporting
    • Data mining
    • ETL (extract-transfer-load —tools that import data from one data store into another)
    • OLAP (online analytical processing)

Of these tools, SelectHub says the dashboards and visualization are by far the most popular; they offer the quick and easy-to-digest data summaries that are at the heart of BI's value proposition.

There are tons of vendors and offerings in the BI space, and wading through them can get overwhelming. Some of the major players include:

    • Tableau, a self-service analytics platform provides data visualization and can integrate with a range of data sources, including Microsoft Azure SQL Data Warehouse and Excel
    • Splunk, a “guided analytics platform” capable of providing enterprise-grade business intelligence and data analytics
    • Alteryx, which blends analytics from a range of sources to simplify workflows as well as provide a wealth of BI insights
    • Qlik, which is grounded in data visualization, BI and analytics, providing an extensive, scalable BI platform
    • Domo, a cloud-based platform that offers business intelligence tools tailored to various industries (such as financial services, health care, manufacturing and education) and roles (including CEOs, sales, BI professionals and IT workers)
    • Dundas BI, which is mostly used for creating dashboards and scorecards, but can also do standard and ad-hoc reporting
    • Birst, a cloud-based service in which multilple instances of the BI software share a common data backend.

How is business intelligence used?

Business intelligence has as positive a impact on an organization's people as it does on sperformance, projects, and decisions. Business Intelligence is used to turn data into actionable information for leadership, management, organization and decision making. The following are some of the ways organizations are learning to use business intelligence:

 

    • Analysing customer behaviours, buying patterns and sales trends
    • Measuring, tracking and predicting sales and financial performance
    • Budgeting and financial planning and forecasting
    • Tracking the performance of marketing campaigns
    • Optimising processes and operational performance
    • Improving delivery and supply chain effectiveness
    • Web and e-commerce data analytics
    • Customer relationship management
    • Risk analysis
    • Strategic value driver analysis