Business Intelligence
Definition
Business intelligence can be defined as a collection of approaches for gathering, storing,
analysing and providing access to data that helps users to gain insights and make better fact-
based business decisions. It should be defined wider than just referring to BI software
applications and analytics to incorporate a more strategic approach to better decision-making.
Business Intelligence
Business intelligence, or BI for short, is an umbrella term that refers to competencies,
processes, technologies, applications and practices used to support evidence-based decision
making in organisations. In the widest sense it can be defined as a collection of approaches for
gathering, storing, analysing and providing access to data that helps users to gain insights and
make better fact-based business decisions.
What is BI used for?
Organisations use Business Intelligence to gain data-driven insights on anything related to
business performance. It is used to understand and improve performance and to cut costs and
identify new business opportunities, this can include, among many other things:
Analysing customer behaviours, buying patterns and sales trends.
Measuring, tracking and predicting sales and financial performance
Budgeting and financial planning and forecasting
Tracking the performance of marketing campaigns
Optimising processes and operational performance
Improving delivery and supply chain effectiveness
Web and e-commerce analytics
Customer relationship management
Risk analysis
Strategic value driver analysis
The Basics of Business Intelligence
The basic components of Business Intelligence are gathering, storing, analysing and providing
access to data
Gathering Data
Gathering data is concerned with collecting or accessing data which can then be used to
inform decision making.
Storing Data
Storing Data is concerned with making sure the data is filed and stored in appropriate ways to
ensure it can be found and used for analysis and reporting.
Analysing Data
The next component of BI is analysing the data. Here we take the data that has been gathered
and inspect, transform or model it in order to gain new insights that will support our business
decision making.
Providing Access
In order to support decision making the decision makers need to have access to the data.
Access is needed to perform analysis or to view the results of the analysis.
Becoming an 'Intelligent Company'
Business Intelligence should sit within the overall approach to enterprise performance
management and help make companies more 'intelligent' (see also our outline "What is
Performance Management" for more information or the book "The Intelligent Company").
Extensive research by the Advanced Performance Institute has identified that there are five
essential steps to becoming a more intelligent company (see Figure below):
Step 1: More intelligent strategies - by identifying strategic priorities and agreeing
your real information needs.
Step 2: More intelligent data - by creating relevant and meaningful performance
indicators as well as qualitative management information linked back to your strategic
information needs.
Step 3: More intelligent insights - by using good evidence to test and prove ideas and
by analysing the data to gain robust and reliable insights.
Step 4: More intelligent communication - by creating informative and engaging
management information packs and dashboards that provide the essential information,
packaged in a way that is targeted and easy-to-understand.
Step 5: More intelligent decision making - by fostering an evidence-based culture of
turning information into actionable knowledge and real decisions.
Which Companies use BI to become more
Intelligent?
Restaurant chains such as McDonalds, Dunkin’ Donuts have successfully applied the principles of an
intelligent company. They use BI to make strategic decisions, such as what new dishes to add to or
remove from their menus and which underperforming stores to close. They also use BI for tactical
matters such as renegotiating contracts with suppliers and identifying opportunities to improve
inefficient processes.
Yahoo Inc. is another intelligent company that used BI effectively to improve their website. The
organization receives many millions of hits to its home page each hour. To test alteration to the
home page they randomly assign one or two hundred thousand users to an experimental group and
have several million other visitors as a control group. By doing so, they can quickly see whether or
not the alterations to the home page leads to the assumed change in the behaviour of the customer.
This in turn allows them to optimize their offerings to enhance revenues and profits.
PRESENTED BY :
KASSRAOUI Mehdi
SENHAJI Kamal
MOUADDEN Nabil
