Business Intelligence Technologies: Some Common Functions

Business intelligence (BI) refers to the technology and data infrastructure of an organization. BI has become a broad term that encompasses several related technologies and processes, including:

• Data mining
• Process analysis
• Performance benchmarking
• Descriptive analytics

BI parses all the data generated by a business and presents easy-to-digest reports, performance measures, and trends that inform management decisions.

Key Takeaways

• Business intelligence is the technological toolkit used by a company to collect and analyze internal data.
• These technologies may include an array of IT solutions from hardware and physical sensors to software platforms and cloud computing.
• Data collected by BI systems are often displayed visually as charts or graphs on a graphical dashboard interface.

What Is Business Intelligence?

Although business intelligence technologies have several functions, their main function is to support a company’s decision-making process and to help knowledge workers, such as managers and research analysts, make better and faster decisions.

Business intelligence represents the scope of IT tools that a firm uses to gather and analyze internal, company-specific information in order to make informed data-driven decisions. These various tools and software platforms combine to comprise robust systems that allow a company to gather, store, and analyze raw business data in a way that helps it make the right decisions.

Business intelligence systems normally operate to collect data in the areas of customer support, market research, product performance, competitive intelligence, and other areas that benefit from statistical analysis.

How Business Intelligence Is Used in Different Industries

Functions of business intelligence technologies vary by industry. For example, they are used in manufacturing for order shipment and customer support, in retail for user targeting and profiling, in financial and banking services for claims and risk analysis, in transportation for fleet management, in telecommunications for understanding customer drop-off rates, and in power and utilities for power usage analysis.

The technology-driven process of business intelligence involves a variety of functions, technology tools, applications, and methodologies that help a company collect data, prepare analyses, develop and conduct queries of databases, and create reports. Every function is used to support business decisions.

Important

The cost of business intelligence software varies, according to both the level of functionality required and the size of the organization. Prices range from as low as $89 per month for small businesses to $5,000 or more.

Business Intelligence Data

The data used in business intelligence can include historical as well as newly gathered data obtained from novel sources. Business intelligence then takes all of that data and combines it into a broad set of data analysis applications and functions.

Specific business intelligence technologies may include:

• Ad hoc analysis
• Data querying & discovery
• Data warehousing
• Enterprise reporting
• Online analytical processing
• Data visualization software
• Dashboards
• Performance scorecards
• Cloud services
• Supply chain analytics
• Machine learning and artificial intelligence

What Are the Main Types of Business Intelligence?

The main types of business intelligence are predictive analytics, descriptive analytics, and prescriptive analytics. Predictive analytic tools examine historical data to model future outcomes, while descriptive analytics identifies trends and relationships in current data. Prescriptive analytics is focused on answering the question, “What should my business do?”

What Are the Stages of Business Intelligence?

There are several steps to using business intelligence to guide effective corporate decisions. The main four steps are: (1) Collect and transform data from multiple sources; (2) Analyze data to reveal trends and inconsistencies; (3) Process data into visualizations and dashboards for easy comprehension; and (4) Take action on insights in real time.

What Does Business Intelligence Software Do?

Business intelligence software is any type of software tool that is used to collate and analyze data from many sources. This can include sales and spending figures, customer data, and information from other sources. The main goal is to assess and visualize data so that corporate leaders can use it to make effective decisions.

The Bottom Line

Overall, business intelligence is a data analysis process aimed at boosting company performance in relation to its competitors by helping end-users within the company make more informed decisions. Business intelligence applications with unique and important functions can be bought separately from third-party vendors or as part of a single business intelligence platform.