Business Intelligence (BI)
Business Intelligence refers to the technical and process infrastructure that collects, stores, and analyzes data generated from a company's activities. Business intelligence is a broad term encompassing data mining, process analysis, performance benchmarking, descriptive analysis, and more. It aims to take all data produced by a business and provide digestible metrics of performance and insights that inform better managerial decisions.
Business Intelligence Details
Business intelligence stems from the understanding that managers, with incomplete or inaccurate information, tend to make worse decisions on average than if they had more information. Financial modelers recognize this as a "garbage in, garbage out" problem. Business intelligence aims to solve this by bringing the latest data, ideally presented in a quick-metrics dashboard designed to support better decisions.
The Growing Field of Business Intelligence
For business intelligence to be useful, it needs to strive for increased accuracy, timeliness, and volume of data. This means finding more ways to capture information that wasn't previously recorded, checking data for errors, and structuring information to allow for broader analysis. In practice, however, companies have data that comes in unstructured or diverse formats, making collection and analysis difficult. As a result, software companies offer business intelligence solutions. These are organization-wide applications designed to unify and analyze a company's data.
Although software solutions are constantly evolving and becoming easier to use, there's still a need for specialists like data scientists to ensure the necessary trade-offs between speed and accuracy of reporting are made. Part of the knowledge gained from big data involves companies struggling to get all information, but data analysts can usually filter sources to get a selection of data points that represent the health of a process or business area as a unified whole. This can reduce the need to capture and reformat all information for analysis, saving time in analysis and increasing the speed of reporting.
Benefits of Business Intelligence
There are many reasons to justify the adoption of business intelligence by companies. Many use it to support functions such as hiring, compliance, production, and marketing. When the gathering and growth of business intelligence is a significant business value, it's hard to find an area that wouldn't benefit from having better information to work with.
Some of the many benefits companies can experience after adopting business intelligence in their business models include faster and more accurate reporting and analysis, improved data quality, greater employee satisfaction, reduced costs and increased profits, and the ability to make better business decisions.
For example, if you are responsible for production schedules for several beverage plants and sales figures show strong monthly growth in a particular region, you can approve further changes in the near future to ensure your plants can meet demands. Similarly, if a cooler-than-normal summer affects sales, you can quickly halt the same production. This is a limited example of how business intelligence, when used correctly, can increase profits and reduce costs.
