Business intelligence (BI), is a term that refers to a variety of
software applications used to analyze an organization’s data to
improve decision making, cut costs, identify inefficient business
processes and new business opportunities.
Business intelligence or a decision support
system (DSS) is made up of several related
activities, including data mining, online
analytical processing, querying and
The purpose of business intelligence is to support
better business decisions based on facts and data rather
than on intuition and anecdotes.
The implementation of business intelligence is
challenging because of technical information flaws and
resistance. Management must make sure that the data
collected is accurate and consistent.
Business intelligence can be used to identify
improvement opportunities, analyze business data into
accessible reports, react quickly to retail demand and
Business intelligence can give companies better position
and leverage during negotiations by quantifying the value
of relationships with suppliers and customers.
Business intelligence can save money
by optimizing business processes and
focusing on decisions.
Business intelligence often uses key performance indicators
(KPIs) to assess the present state of business and to prescribe a
course of action.
Companies that use BI to uncover defective business processes are in a
much better position to successfully compete than companies that use BI
merely to monitor what's happening.
Business Intelligence Dashboards
Data mining, Data warehouse, Data marts
Data mining: The process of sorting through large amounts of
data to select relevant information for a specific purpose.
Data warehouse: A database designed to support decision making in an organization.
Data from the business operation databases are copied to the data warehouse to
enable queries to be performed without disturbing the performance or the stability of
the operation systems.
Data marts: Data warehouses can become enormous with
hundreds of gigabytes of transactions. As a result, subsets, known
as "data marts," are often created to divide one department or
Information System Management Must
Analyze how executives make decisions.
Consider what information executives need in order to facilitate quick, accurate decisions.
Pay attention to the quality of data.
Establish performance metrics that are most relevant to the business.
Provide the context that influences performance metrics.
Business Intelligence is more than just decision support. It has the potential to transform organizations.