What Is Business Intelligence? A Deep Dive into This Data-Driven Field
Human capital, shifting paradigms, touch bases—businesses today are full of seemingly odd words and phrases that might leave the unfamiliar scratching their heads. For many, the term “business intelligence” also fits that bill. Sure, you can make an educated guess that it involves helping businesses make smart decisions, but if you’re curious about what business intelligence is, then you’ve come to the right place. In this article, we’ll take a deep dive into what business intelligence is, its history and how it is used to help organizations thrive.
What is business intelligence (BI)?
Simply put, business intelligence is an umbrella term for the processes and technologies that gather, store and analyze data in order to help a business make decisions. This could take the form of studying sales figures, tracking the habits of product users, measuring operations costs or any number of inputs—if there’s data to collect, business intelligence professionals can put it to use.
This might not sound Earth-shattering—after all, businesses have been studying their markets and looking for ways to get a leg up on their competition for centuries. But our highly connected modern world and advanced computing power has helped kick this practice into overdrive. We now have more data and more analytical processing power to guide business decisions. What used to be determined by gut feelings can now be figured out by using factual data—and that’s a big deal!
Why is business intelligence important?
Businesses have no shortage of decisions to make or processes to improve. Business intelligence allows decision-makers to have an informed view of the outcomes of their potential options. This can help businesses make decisions faster, improve inefficient processes, identify market trends and gain a better understanding of their competition—all of which can be incredibly valuable.
Well-designed BI analytics systems can give executives a comprehensive view of their organizations, often with current updates and alerts that provide a strong platform for business process analysis, performance management and marketing.
How is business intelligence used?
The work of business intelligence professionals can be used in a wide variety of ways—but what does that look like, exactly? Take a look at how companies in various industries are leveraging business intelligence:
- Healthcare: Business intelligence can be used to reduce patient re-admission rates, reduce scheduled patient-visit no-shows and improve overall efficiency.
- E-commerce & retail: Business intelligence can be used to identify customers who are more inclined to buy, identify additional products customers may be interested in and quickly identify effective promotional opportunities.
- Logistics: Business intelligence can be used to monitor complex supply chains, helping logisticians predict and prepare for potential problem areas.
Though these are just a few industry examples, nearly any business can benefit from BI. If there’s an industry you’d love to work in, chances are you can apply business intelligence techniques within it.
What are business intelligence tools used for?
Now that you have a better idea of what business intelligence is and how it’s used, let’s take a look at some of the types of tools business intelligence pros have at their disposal. These tools generally cover the following categories:
Reporting: These tools can produce electronic reports that detail organizational finance planning, budgeting and performance management. Often the end product is a dashboard that can summarize large amounts of data at a glance.
Querying: These tools are often used to ask questions of and analyze data. Many of these tools automate some of the programming needed to create a query.
Predictive analysis: This includes forecasting and projecting business outcomes based upon current and historical data.
The tools used for these tasks can come in many forms—some are comprehensive suites of software that can be used broadly across industries, while others may be specifically designed for particular industries. No matter the tool used, these platforms all rely on data.
What roles are commonly associated with business intelligence?
So who are the people who actually work within this field? Aside from the executive-level decision-makers who rely on their work, there are several positions associated with business intelligence.
- Data analysts
- Business intelligence analysts
- Data scientists
- Business intelligence developers
Many of these roles can be a little “squishy” and are not consistently defined from organization to organization—for example, the work of some business intelligence analysts can look very similar to that of a data analyst and vice versa. No matter the label given, the work these professionals do all draws from a similar base of skills like programming, statistical analysis, reporting and data visualization.
Is a data-driven career in your future?
If reading about business intelligence has piqued your interest, you may want to consider exploring a career in data analysis. These data pros can play a pivotal role in an organization, with work that influences the decision-making process of a business’ leadership and management teams. Does that sound appealing to you? If so, then you’ll want to know about the abilities and characteristics that lend themselves well to a career in data analysis. Check out our article, “6 Signs You Should Consider Pursuing a Data Analyst Career,” to learn more.