Business intelligence

From Wikipedia, the free encyclopedia

Business intelligence (BI) is a set of theories, methodologies, architectures, and technologies that
transform raw data into meaningful and useful information for business purposes. BI can handle large
amounts of unstructured data to help identify and develop new opportunities. Making use of new
opportunities and implementing an effective strategy can provide a competitive market advantage and long-
term stability.
[1]

Generally, Business Intelligence is increasing number of components, these are:
Multidimensional aggregation and allocation
Denormalization, tagging and standardization
Realtime reporting with analytical alert
Interface with unstructured data source
Group consolidation, budgeting and rolling forecast
Statistical inference and probabilistic simulation
Key performance indicators optimization
Version control and process management
Open item management
BI technologies provide historical, current and predictive views of business operations. Common functions
of business intelligence technologies are reporting, online analytical processing,analytics, data
mining, process mining, complex event processing, business performance
management, benchmarking, text mining, predictive analytics and prescriptive analytics.
Though the term business intelligence is sometimes a synonym for competitive intelligence (because they
both support decision making), BI uses technologies, processes, and applications to analyze mostly
internal, structured data and business processes while competitive intelligence gathers, analyzes and
disseminates information with a topical focus on company competitors. If understood broadly, business
intelligence can include the subset of competitive intelligence.
[


History[edit]
In a 1958 article, IBM researcher Hans Peter Luhn used the term business intelligence. He employed
the Webster's dictionary definition of intelligence: "the ability to apprehend the interrelationships of
presented facts in such a way as to guide action towards a desired goal."
[3]

Business intelligence as it is understood today is said to have evolved from the decision support
systems that began in the 1960s and developed throughout the mid-1980s. DSS originated in the
computer-aided models created to assist with decision making and planning. From DSS, data
warehouses, Executive Information Systems, OLAP and business intelligence came into focus
beginning in the late 80s.
In 1988, an Italian-Dutch-French-English consortium that organized an international meeting on
the Multiway Data Analysis in Rome.
[4]
The ultimate goal is to reduce the multiple dimensions down to
one or two (by detecting the patterns within the data) that can then be presented to human decision-
makers.
In 1989, Howard Dresner (later a Gartner Group analyst) proposed "business intelligence" as an
umbrella term to describe "concepts and methods to improve business decision making by using fact-
based support systems."
[5]
It was not until the late 1990s that this usage was widespread.
[6]


(Source Wikipedia for the above)
Business Intelligence - BI



Related Terms
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Adding Intelligence to the Business Process
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The term Business Intelligence (BI) represents the tools and systems that play a key role in the strategic planning
process of the corporation. These systems allow a company to gather, store, access and analyze corporate data
to aid in decision-making. Generally these systems will illustrate business intelligence in the areas of customer
profiling, customer support, market research, market segmentation, product profitability, statistical analysis, and
inventory and distribution analysis to name a few.
Most companies collect a large amount of data from their business operations. To keep track of that information,
a business and would need to use a wide range of software programs , such as Excel, Access and
different database applications for various departments throughout their organization. Using multiple software
programs makes it difficult to retrieve information in a timely manner and to perform analysis of the data.
See "What is Business Intelligence Software?" in Webopedia's Did You Know...? section
(source WEBOPEDIA WEEKLY)


What kind of companies use BI systems?
Restaurant chains such as Hardees, Wendys, Ruby Tuesday and T.G.I. Fridays are heavy
users of BI software. They use BI to make strategic decisions, such as what new products to add
to their menus, which dishes to remove and which underperforming stores to close. They also
use BI for tactical matters such as renegotiating contracts with food suppliers and identifying
opportunities to improve inefficient processes. Because restaurant chains are so operations-
driven, and because BI is so central to helping them run their businesses, they are among the
elite group of companies across all industries that are actually getting real value from these
systems.
One crucial component of BIbusiness analyticsis quietly essential to the success of
companies in a wide range of industries, and more famously essential to the success of
professional sports teams such as the Boston Red Sox, Oakland As and New England Patriots.

With an analytical approach, the Patriots managed to win the Super Bowl three times in four
years. The team uses data and analytical models extensively, both on and off the field. In-depth
analytics help the team select players and stay below the NFL salary cap. Patriots coaches and
players are renowned for their extensive study of game film and statistics, and Coach Bill
Belichick reads articles by academic economists on statistical probabilities of football outcomes.
Off the field, the team uses detailed analytics to assess and improve the "total fan experience."
At every home game, for example, 20 to 25 people have specific assignments to make
quantitative measurements of the stadium food, parking, personnel, bathroom cleanliness and
other factors.
In retail, Wal-Mart uses vast amounts of data and category analysis to dominate the industry.
Harrahs has changed the basis of competition in gaming from building megacasinos to analytics
around customer loyalty and service. Amazon and Yahoo aren't just e-commerce sites; they are
extremely analytical and follow a "test and learn" approach to business changes. Capital One
runs more than 30,000 experiments a year to identify desirable customers and price credit card
offers.


(airtcel taken from CIO)


Business Intelligence Definition and Solutions


Business Intelligence topics covering definition, objectives, systems and solutions
Who should lead the way?
Sharing is vital to the success of BI projects, because everyone involved in the process must
have full access to information to be able to change the ways that they work. BI projects should
start with top executives, but the next group of users should be salespeople. Because their job is
to increase sales and because theyre often compensated on their ability to do so, theyll be more
likely to embrace any tool that will help them do just thatprovided, of course, the tool is easy to
use and they trust the information.
With the help of BI systems, employees modify their individual and team work practices, which
leads to improved performance among the sales teams. When sales executives see a big
difference in performance from one team to another, they work to bring the laggard teams up to
the level of the leaders.
Once you get salespeople on board, you can use them to help get the rest of your organization
on the BI bandwagon. Theyll serve as evangelists, gushing about the power of the tools and how
BI is improving their lives.

How should I implement a BI system?
When charting a course for BI, companies should first analyze the way they make decisions and
consider the information that executives need to facilitate more confident and more rapid
decision-making, as well as how they'd like that information presented to them (for example, as a
report, a chart, online, hard copy). Discussions of decision making will drive what information
companies need to collect, analyze and publish in their BI systems.
Good BI systems need to give context. It's not enough that they report sales were X yesterday
and Y a year ago that same day. They need to explain what factorsinfluencing the business
caused sales to be X one day and Y on the same date the previous year.
Like so many technology projects, BI wont yield returns if users feel threatened by, or are
skeptical of, the technology and refuse to use it as a result. And when it comes to something like
BI, which, when implemented strategically, ought to fundamentally change how companies
operate and how people make decisions, CIOs need to be extra attentive to users' feelings.
Seven steps to rolling out BI systems:
1. Make sure your data is clean.
2. Train users effectively.
3. Deploy quickly, then adjust as you go. Don't spend a huge amount of time up front
developing the "perfect" reports because needs will evolve as the business evolves.
Deliver reports that provide the most value quickly, and then tweak them.
4. Take an integrated approach to building your data warehouse from the beginning. Make
sure you're not locking yourself into an unworkable data strategy further down the road.
5. Define ROI clearly before you start. Outline the specific benefits you expect to achieve,
then do a reality check every quarter or six months.
6. Focus on business objectives.
7. Don't buy business intelligence software because you think you need it. Deploy BI with
the idea that there are numbers out there that you need to find, and know roughly where
they might be.
What are some potential problems?
User resistance is one big barrier to BI success; others include having to winnow through
voluminous amounts of irrelevant data and poor data quality.
The key to getting accurate insights from BI systems is standard data. Data is the most
fundamental component of any BI endeavor. It's the building blocks for insight. Companies have
to get their data stores and data warehouses in good working order before they can begin
extracting and acting on insights. If not, they'll be operating based on flawed information.
Another potential pitfall is BI tools themselves. Though the tools are more scalable and user
friendly than they used to be, the core of BI is still reporting rather than process management,
although that's slowly beginning to change. Be careful not to confusebusiness intelligence with
business analytics.
A third impediment to using BI to transform business processes is that most companies don't
understand their business processes well enough to determine how to improve them. And
companies need to be careful about the processes they choose. If the process does not have a
direct impact on revenue or the business isn't behind standardizing the process across the
company, the entire BI effort could disintegrate. Companies need to understand all the activities
that make up a particular business process, how information and data flow across various
processes, how data is passed between business users, and how people use it to execute their
particular part of the process. And they need to understand all this before they start a BI project,
if they hope to improve how people do their jobs.
What are some benefits of business intelligence efforts?
A broad range of applications for BI has helped companies rack up impressive ROI figures.
Business intelligence has been used to identify cost-cutting ideas, uncover business
opportunities, roll ERP data into accessible reports, react quickly to retail demand and optimize
prices.
Besides making data accessible, BI software can give companies more leverage during
negotiations by making it easier to quantify the value of relationships with suppliers and
customers.
Within the walls of the enterprise, there are plenty of opportunities to save money by optimizing
business processes and focusing decisions. BI yields significant ROI when it sheds light on
business bloopers. For example, employees of the city of Albuquerque used BI software to
identify opportunities to cut cell phone usage, overtime and other operating expenses, saving the
city $2 million during three years. Likewise, with the help of BI tools, Toyota realized it had been
double-paying its shippers to the tune of $812,000 in 2000. Companies that use BI to uncover
flawed business processes are in a much better position to successfully compete than
companies that use BI merely to monitor what's happening.

What is business intelligence?
What kind of companies use BI systems?
Who should lead the way?
How should I implement a BI system?
What are some potential problems?
What are some benefits of business intelligence efforts?
More tips for getting BI right
More tips for getting BI right
Analyze how executives make decisions.
Consider what information executives need in order to facilitate quick, accurate decisions.
Pay attention to data quality.
Devise performance metrics that are most relevant to the business.
Provide the context that influences performance metrics.
And remember, BI is about more than decision support. Due to improvements in the technology
and the way CIOs are implementing it, BI now has the potential to transform organizations. CIOs
who successfully use BI to improve business processes contribute to their organizations in more
far-reaching ways than by implementing basic reporting tools.

Anything missing? Got a gripe about these pieces? Send a note to clindquist@cxo.comwith your
additions and omissions.






























8 Ways Business Intelligence Software Improves
the Bottom Line
Business intelligence experts and IT executives share their tips on how BI software can improve
your bottom line and make your organization more efficient.
CIO Can business intelligence (BI) solutions, software that helps organizations mine and
analyze big data and small, help your company improve its bottom line? To find out, CIO.com
asked dozens of BI experts and IT executives. Here are their eight top suggestions regarding
how you can get a positive return on your BI software investment.

1. Get fast answers to critical business questions. "Business intelligence provides data at the
moment of value to a company," says Jason Cook, chief architect & CTO, U.S. & Canada and
Consumer Packaged Goods, BT Global Services. "With a [BI solution] in place, companies can
extract crucial facts from a large amount of data at a rapid speed."
"With quick access to your internal data, you can more efficiently use your time to analyze
internal information and make decisions," says Ryan Mulholland, president,Connotate, a provider
of Web data monitoring and extraction solutions. For example, "as president of my company, I
can look at all trends in our sales cycle and see which are going to affect our business," he says.
"Then I can decide our course of action much more quickly and efficiently."
2. Align business activities with corporate strategy. "Companies incur a huge direct cost as
well as opportunity cost when people, and even entire departments, focus on things that are not
aligned with the company's strategy," says Myron Weber, founder of Northwood Advisors, a BI
and decision systems advisory firm.
"Establishing metrics and key performance indicators aligned with strategy, then using BI
software to provide visibility and drive accountability, brings alignment of activities and outcomes
with the desired strategic objectives," Weber says.
3. Empower employees. "The more people who have access to data, the greater value
organizations will derive as a result," says Rado Kotorov, Chief Innovation Officer at Information
Builders, a provider of business software solutions. "BI software allows businesses to maximize
information capital and turn every employee into a decision maker. Armed with relevant, real-time
information, individuals can make data-driven, informed decisions that impact the company's
bottom line."
4. Reduce time spent on data entry and manipulation. "A strong BI system, if well-configured,
can help eliminate the time spent copying and pasting data and performing calculations," says
Max Dufour, principal, Harmeda LLC, an enterprise solutions advisory to Fortune 500 and private
equity firms.
That's because with business intelligence software, workers can quickly "generate reports where
most of the leg work has already been performed behind the scenes," Dufour says. "And the time
saved preparing the report can be reallocated to analyze the outcome and drive better, more
profitable decisions."

5. Gain insights into customers. "BI software allows companies to discover patterns within
customer behaviors, offering greater visibility into what customers want, when they want it and
how they want it," explains Cook. "This inside knowledge can turn into direct profit for a company
by leveraging existing data on consumer habits and maintaining valuable customers."
You can also "apply customer insights from BI to understand who your best customers are,
where to find more like them, and, in some cases, which customers to fire," says Weber.
6. Benchmark sales channel partners. BI software can also reveal information about your
sales channel partners, "enabling your sales team to triage top and bottom performers," says Bill
Stark, head of Corporate Intelligence & Analytics at Clean Power Finance, an online SaaS
platform that creates a virtual marketplace for institutional investors and the solar industry.
7. Identify areas for cost cutting. "Your BI software investment can pay for itself over and over
by helping decision-makers identify areas for cost savings," says Dwight deVera, senior vice
president at Arcplan, a provider of BI and planning solutions.
"Cutting excessive inventory -- and thereby the cost to maintain it -- is one of the easiest changes
a company can make to immediately affect its bottom line," deVera says. And a BI solution with a
good dashboard, "that provides retailers better visibility into inventory, enables them to make
better decisions about what to order and when so goods don't sit idly on warehouse shelves."
BI software can also help manufacturers control and/or cut costs by analyzing manufacturing
processes, "allowing them to access and collect the data necessary to measure all major
productivity and production influencing factors, as well as maximize production efficiency from
the supply chain, the factory floor to the distribution network," says Wolfgang Seybold, CEO
of Cubeware, a BI software solution provider.
8. Boost productivity (by monitoring employees' use of the network/Internet)."Use business
intelligence to see all the traffic happening on a network and how much time [employees are
spending] on non-work activities," says Tom Lambotte, president of business solutions
provider GlobalMac IT.
"This can be very insightful," Lambotte says. "One of our clients learned a new intern
downloaded 24GB of Netflix in one month. Netflix was then blocked completely, ensuring she
was focused on her work. To monetize the impact, 10 users at $20/hr, at one hour/week doing
non-work adds up to $10,000 in lost productivity. Most [organizations] have no idea this is even
going on."
Jennifer Lonoff Schiff is a contributor to CIO.com and runs a marketing communications
firm focused on helping organizations better interact with their customers, employees, and
partners.
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