Business Intelligence
Business Intelligence (BI) is a broad category of application programs and technologies for gathering, storing, analyzing and providing access to data to help enterprise users make better decisions (Wallace, 2015). It is an umbrella term that combines architecture, tools, databases, analytical tools, applications and methodologies to combine different data sources into information about processes in the company and provide this information to the managers at different level in appropriate manner at the right time to support them in operational, tactical and strategic decision making (Harakova & Skalska, 2013).
BI is associated with querying, reporting, online analytical processing and alerts in order to gain business advantage by answering the fundamental questions like how the customers are ranked, how the business is doing, which product is contributing more in the profitability of the company, which product is yielding negative return for the company etc. It provides back up for these answers in the form of processed information. Thus BI helps in creating a fact based decision making framework through strong computer system (Bogdan, 2013).
Working Procedure of Business Intelligence
A company has a lot of information that are dispersed in different systems. It is difficult to analyze the performance of the organization based on the scattered data. It makes the decision process lengthy and less effective. So the BI takes input in the form structured/unstructured data from internal as well as external sources. The input for the system is provided through company spreadsheet, transactional databases, web pages, social networks, business processes, data warehouse among others (Nigash, 2004). Once the data from different sources are identified, BI processes those data and brings it to a single unified view providing real time reporting, dashboards and predictive analysis. These reports helps the organization in fast decision making and effective strategic management (Know Solutions).
For example: If a clothing store located in in different parts of Nepal plans to develop a sales promotion campaign, it needs information about past promotional activities, preferences of customers residing in different locations, budget required to support the campaign, inventory necessary to execute the campaign successfully. BI, in such situation helps to develop effective sales promotion activity by providing important pieces of information and correlation among those information. Thus the major task of BI is to convert raw data into meaningful information to support decision making.
Benefits of Business Intelligence
The benefits of BI in organizations can be highlighted through following points:
Improve Management Process: BI provides real time updated data about production, sales and customer needs and preferences in organized, structured and readable format. This prevents from taking decision based on presumptions, guess works and guts. Thus it enables faster decision making, real time performance management, improved reporting speed and greater insights into customer behavior. All these collectively helps in improving the management process as the availability of consolidated and fact based information makes planning and controlling more effective (IDC Technologies).
Improve Operational Process: The organizations constantly need to look for ways to improve revenue and decrease costs. BI provides information about business activities generating higher revenue, the products or services that are not performing as expected and are not contributing in the revenue of the organization, cost consuming activities with no or less revenue, time taken for processing the order, possible frauds or delays that may take place in service delivery process. Based on that information, we can decide on the possible changes we can make in the day to day operations to enhance the performance, reduce the cost and delays involved that will increase revenue and improve the operational process.
Predict Future: BI provides information about the business activities over years in precise manner. This helps us in analyzing the trends and patterns and predict the future. For example: If we are in garment factory and the information shows that the garment has high demand during festival seasons in the last five years, we can predict that the demand will be high in this festive season too and plan the production accordingly.
References
Bogdan, N. (2013). Business Intelligence Systems. Database Systems Journal, 4 (4), 12-21.
Harakova, M., & Skalska, H. (2013). Business Intelligence and Implementation in a Small Enterprise. Journal of Systems Integration, 2 (1), 50-62.
IDC Technologies. (n.d.). The Key Advantages of Business Intelligence and Analytics. Retrieved from Communication Article: idc-online.com/technical_reference...
Business Intelligence
Business Intelligence (BI) is a broad category of application programs and technologies for gathering, storing, analyzing and providing access to data to help enterprise users make better decisions (Wallace, 2015). It is an umbrella term that combines architecture, tools, databases, analytical tools, applications and methodologies to combine different data sources into information about processes in the company and provide this information to the managers at different level in appropriate manner at the right time to support them in operational, tactical and strategic decision making (Harakova & Skalska, 2013).
BI is associated with querying, reporting, online analytical processing and alerts in order to gain business advantage by answering the fundamental questions like how the customers are ranked, how the business is doing, which product is contributing more in the profitability of the company, which product is yielding negative return for the company etc. It provides back up for these answers in the form of processed information. Thus BI helps in creating a fact based decision making framework through strong computer system (Bogdan, 2013).
Working Procedure of Business Intelligence
A company has a lot of information that are dispersed in different systems. It is difficult to analyze the performance of the organization based on the scattered data. It makes the decision process lengthy and less effective. So the BI takes input in the form structured/unstructured data from internal as well as external sources. The input for the system is provided through company spreadsheet, transactional databases, web pages, social networks, business processes, data warehouse among others (Nigash, 2004). Once the data from different sources are identified, BI processes those data and brings it to a single unified view providing real time reporting, dashboards and predictive analysis. These reports helps the organization in fast decision making and effective strategic management (Know Solutions).
For example: If a clothing store located in in different parts of Nepal plans to develop a sales promotion campaign, it needs information about past promotional activities, preferences of customers residing in different locations, budget required to support the campaign, inventory necessary to execute the campaign successfully. BI, in such situation helps to develop effective sales promotion activity by providing important pieces of information and correlation among those information. Thus the major task of BI is to convert raw data into meaningful information to support decision making.
Benefits of Business Intelligence
The benefits of BI in organizations can be highlighted through following points:
Improve Management Process: BI provides real time updated data about production, sales and customer needs and preferences in organized, structured and readable format. This prevents from taking decision based on presumptions, guess works and guts. Thus it enables faster decision making, real time performance management, improved reporting speed and greater insights into customer behavior. All these collectively helps in improving the management process as the availability of consolidated and fact based information makes planning and controlling more effective (IDC Technologies).
Improve Operational Process: The organizations constantly need to look for ways to improve revenue and decrease costs. BI provides information about business activities generating higher revenue, the products or services that are not performing as expected and are not contributing in the revenue of the organization, cost consuming activities with no or less revenue, time taken for processing the order, possible frauds or delays that may take place in service delivery process. Based on that information, we can decide on the possible changes we can make in the day to day operations to enhance the performance, reduce the cost and delays involved that will increase revenue and improve the operational process.
Predict Future: BI provides information about the business activities over years in precise manner. This helps us in analyzing the trends and patterns and predict the future. For example: If we are in garment factory and the information shows that the garment has high demand during festival seasons in the last five years, we can predict that the demand will be high in this festive season too and plan the production accordingly.
References
Bogdan, N. (2013). Business Intelligence Systems. Database Systems Journal, 4 (4), 12-21.
Harakova, M., & Skalska, H. (2013). Business Intelligence and Implementation in a Small Enterprise. Journal of Systems Integration, 2 (1), 50-62.
IDC Technologies. (n.d.). The Key Advantages of Business Intelligence and Analytics. Retrieved from Communication Article: idc-online.com/technical_reference...
Know Solutions. (n.d.). How Business Intelligence works? Retrieved from Business Intelligence: knowsolution.com.br/en/how-busines...
Nigash, S. (2004). Business Intelligence. Communications of the Association for Information Systems, 13 (1), 177-195.
Wallace, P. (2015). Introduction to Information Systems (Second ed.). New Jersey: Pearson Education Inc.