Who actually uses business intelligence software
BI - definition and meaning
For years, the majority of companies worldwide have been investing huge sums in business intelligence (BI) tools and platforms. BI initiatives often fail due to a lack of understanding of the software or because it does not meet the company's requirements. This article will walk you through everything you need to know about business intelligence. Everything about business intelligence on CIO.de.
Business Intelligence - what is the definition?
Business intelligence uses software and services to generate usable insights from data that support companies in making strategic decisions. BI tools use and analyze data sets and present the results of their analysis in the form of reports, dashboards, graphics, diagrams or heat maps. If this is the right tool for the company's purposes, such BI analyzes provide detailed insights into the status quo of the business.
In addition, the term business intelligence is also applied to a number of software tools that also generate business insights from existing data sets.
What does BI look like in practice?
Reporting is a fundamental aspect of business intelligence - the dashboard is something like the archetype of BI tools. These are hosted applications that automatically compile available data and display values that reflect the current status of the company in graphics or diagrams.
Of course, BI is not just about creating reports. Business intelligence software cannot say anything about what happens when companies take a certain course. But BI offers the possibility to examine data for certain trends or developments in order to be able to make better business decisions on that basis.
A company that wants to better manage its supply chain, for example, needs business intelligence skills to find out where delays occur and in which areas there is potential for optimization. However, the same company could use BI to determine which of its products or which of its delivery modes are most affected by the delays.
The example of the school system in Columbus, Ohio, USA, shows that the potential use cases of business intelligence go far beyond the usual business performance metrics (more sales, lower costs): BI tools are used there to analyze various metrics - From the attendance rate of the students to their average performance.
What is the difference to business analytics?
Business intelligence is descriptive, so it provides information about what is currently happening and how past developments have contributed to it. Business analytics, on the other hand, is an umbrella term for predictive data analysis techniques. These can provide information on how to achieve better results. Business analytics is a sub-category of data analytics (in corporate use).
However, business intelligence and business analytics differ more than just the time reference. Rather, the question revolves around who Business Intelligence is actually intended for. As this Stitchdata blog post explains, BI wants to provide management with snapshots of the company's current status quo. Business analytics require the use of data scientists who analyze and interpret the results accordingly. Business intelligence tools, on the other hand, aim to be as understandable and intuitive as possible - even for users without a technical background.
What business intelligence strategies are there?
In the past, IT professionals were the main users of business intelligence applications. This has now changed drastically due to a significantly increased user friendliness - BI users now come from all areas of the company.
Cindi Howson, Research Vice President at Gartner, distinguishes between two types of Business Intelligence: "With traditional or classic BI, IT experts generate reports based on transactional, internal data. With the modern variant of Business Intelligence, business users interact with agile, intuitive systems to analyze more data in less time. "
According to the Gartner expert, companies use classic BI specifically for certain reports that require a particular level of accuracy - for example when it comes to regulatory requirements or financial reports. According to Howson, on the other hand, modern business intelligence tools are primarily used when insights into dynamic, rapidly changing areas such as event marketing are desired. After all, speed is the measure of all things, not one hundred percent correctness.
While business intelligence is the foundation for making better, more informed business decisions, many organizations struggle to implement an effective business intelligence strategy - thanks to poor data practices and tactical errors.
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