Business intelligence (BI) is a big buzzword in today's IT world. It is a concept understood by some, but misunderstood by many.
The purpose of this article is to clarify what BI is and to discuss its main components. It will also discuss why BI is drawing so much attention, even during this economic downturn, and why it is not only winning the hearts and minds of decision makers, but is also penetrating many functional areas like marketing, finance, and securities.
Part of the confusion about BI lies in the flurry of acronyms relating to analyzing business information. In addition to business intelligence, terms like business performance management (BPM), business process management (also BPM), corporate performance management (CPM), and business activity monitoring (BAM), have also emerged. All of these are a part of BI. They are all dependent on BI tools, but it should be noted that BI is not dependent on them.
Though the name was coined by the Gartner Group in mid nineties, business intelligence as a concept started much earlier. The concept was rooted in the reporting systems of mainframe computers in the seventies. During that period reporting systems was static, two dimensional, and had no analytical capabilities. The demand for dynamic multidimensional reporting systems for predictive and intelligent decision-making pushed BI to develop. With the advent of new technologies and applications, BI came to its present state and is continuing to grow every day. BI today is capable of multidimensional analysis of data to see 360 degree business insight, statistical analysis, and forecasting to help better decision support systems.
Based on present trends, the use of BI will become so widespread that every desktop will have a BI icon that in the future. BI will become an integral part of an enterprise's information system and, like word processing software, BI will be used by almost all end users, business users, and government officials to gauge whether their strategies are aligned with their companies' overall strategic plan.
What BI Is All About
BI is neither a product nor a system. It is an umbrella term that combines architectures, applications, and databases. It enables the real-time, interactive access, analysis, and manipulation of information, which provides the business community with easy access to business data. BI analyzes historical data—the data businesses generate through transactions or by other kinds of business activities—and helps businesses by analyzing the past and present business situations and performances. By giving this valuable insight, BI helps decision makers make more informed decisions and supplies end users with critical business information on their customers or partners, including information on behaviors and trends.
Businesses generate a sea of data. Every datum carries a small piece of the business' story. This data is scattered everywhere, in disparate systems and in different departments. It is held captive in dead hard drives, and can even be situated in geographically different regions. However, it is in data, where the true nature of business—its trends, strengths, and weaknesses—lie. BI gathers all the related data to turn it into information and information that is analyzed properly can be used for decision making which can finally go into action.
In other words, BI transforms data into information, information into decisions, and decisions into action.
How BI Evolved
Key to understanding how BI analyzes business is understanding how data is processed into information (via different technologies) and how it is analyzed. Knowing these processes and how it fits into BI's architecture, tools, and applications will also provide clarity about BI.
The purpose of this article is to clarify what BI is and to discuss its main components. It will also discuss why BI is drawing so much attention, even during this economic downturn, and why it is not only winning the hearts and minds of decision makers, but is also penetrating many functional areas like marketing, finance, and securities.
Part of the confusion about BI lies in the flurry of acronyms relating to analyzing business information. In addition to business intelligence, terms like business performance management (BPM), business process management (also BPM), corporate performance management (CPM), and business activity monitoring (BAM), have also emerged. All of these are a part of BI. They are all dependent on BI tools, but it should be noted that BI is not dependent on them.
Though the name was coined by the Gartner Group in mid nineties, business intelligence as a concept started much earlier. The concept was rooted in the reporting systems of mainframe computers in the seventies. During that period reporting systems was static, two dimensional, and had no analytical capabilities. The demand for dynamic multidimensional reporting systems for predictive and intelligent decision-making pushed BI to develop. With the advent of new technologies and applications, BI came to its present state and is continuing to grow every day. BI today is capable of multidimensional analysis of data to see 360 degree business insight, statistical analysis, and forecasting to help better decision support systems.
Based on present trends, the use of BI will become so widespread that every desktop will have a BI icon that in the future. BI will become an integral part of an enterprise's information system and, like word processing software, BI will be used by almost all end users, business users, and government officials to gauge whether their strategies are aligned with their companies' overall strategic plan.
What BI Is All About
BI is neither a product nor a system. It is an umbrella term that combines architectures, applications, and databases. It enables the real-time, interactive access, analysis, and manipulation of information, which provides the business community with easy access to business data. BI analyzes historical data—the data businesses generate through transactions or by other kinds of business activities—and helps businesses by analyzing the past and present business situations and performances. By giving this valuable insight, BI helps decision makers make more informed decisions and supplies end users with critical business information on their customers or partners, including information on behaviors and trends.
Businesses generate a sea of data. Every datum carries a small piece of the business' story. This data is scattered everywhere, in disparate systems and in different departments. It is held captive in dead hard drives, and can even be situated in geographically different regions. However, it is in data, where the true nature of business—its trends, strengths, and weaknesses—lie. BI gathers all the related data to turn it into information and information that is analyzed properly can be used for decision making which can finally go into action.
In other words, BI transforms data into information, information into decisions, and decisions into action.
How BI Evolved
Key to understanding how BI analyzes business is understanding how data is processed into information (via different technologies) and how it is analyzed. Knowing these processes and how it fits into BI's architecture, tools, and applications will also provide clarity about BI.
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