Business Intelligence (BI) involves analyzing data to assist employees within an organization or company in making data-driven decisions to achieve better outcomes. To do this, it is essential to collect both internal and external data, enabling the extraction of information that drives meaningful actions toward the organization's objectives.
Once the data is processed, visualizations, dashboards, and reports are created to present the information in a more understandable manner. This helps in assessing the company's performance and trends, allowing for operational and strategic decisions regarding time and cost reductions and the identification of new opportunities.
Business Intelligence not only requires software that enables proper data analysis but also a business intelligence architecture. This is because the data needs to reside in an enterprise data warehouse or in small data marts linked to the general data warehouse. BI data can include not only historical information about the organization but also real-time data.
Before using the information, raw data must be cleaned, integrated, and consolidated, which is made possible through data integration and quality management tools to ensure that the utilized information is consistent and relevant. Initially, it was IT and BI specialists who used BI tools, but nowadays, the same business analysts, executives, and other employees use them, thanks to self-service tools.
Business Intelligence combines the collection of data, storage, and analysis to optimize a business's operations or activities. Over time, business intelligence tools have evolved to enhance their performance, and in doing so, some fundamental processes have been included:
- Prepare data for analysis by gathering information from various sources to ensure that the analysis includes all necessary information.
- Data mining to uncover trends among the data using information such as databases, statistics, and more.
- Descriptive analysis to understand what happened in a particular scenario using preliminary analysis.
- Statistical analysis to grasp a trend using results from descriptive and statistical analysis.
- Visual analysis to convey information in a simple manner with a visual narrative.
- Data visualization to view data analysis more easily in the form of charts, histograms, and more.
- Performance metrics to compare different time periods and assess performance based on business objectives.
- Data reports to share with different departments and make better decisions.
- Data queries to obtain answers based on the analysis of a specific dataset.
When an organization or company uses Business Intelligence, it has the ability to monitor the performance of a specific area in order to act promptly in case any issues arise that need resolution or to discover opportunities that will enhance its performance.
For instance, analyzing a company's customer data can assist in marketing strategy, improving customer service, and boosting sales. Alternatively, it can aid in gathering information about competitors to make market-based decisions.
Here are some of the benefits of Business Intelligence:
Cost Reduction: By optimizing processes and resource allocation, BI can lead to economic savings.
Improved Customer Experience: BI helps understand customer behavior and preferences, enabling more targeted marketing and better customer service.
Operational Efficiency: BI identifies bottlenecks and inefficiencies in business operations, leading to more efficient processes.
Revenue Growth: Through insights into customer behavior and market trends, BI can drive higher sales and revenue.
Market and Business Trend Analysis: It helps understand emerging market trends and adapt business strategies accordingly.
Improved Forecasting: BI provides accurate data for forecasting future trends and demand, aiding in inventory management and planning.
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