|Management of a business|
Business intelligence (BI) comprises the strategies and technologies used by enterprises for the data analysis of business information. BI technologies provide historical, current and predictive views of business operations. Common functions of business intelligence technologies include reporting, online analytical processing, analytics, data mining, process mining, complex event processing, business performance management, benchmarking, text mining, predictive analytics and prescriptive analytics. BI technologies can handle large amounts of structured and sometimes unstructured data to help identify, develop and otherwise create new strategic business opportunities. They aim to allow for the easy interpretation of these big data. Identifying new opportunities and implementing an effective strategy based on insights can provide businesses with a competitive market advantage and long-term stability.
Business intelligence can be used by enterprises to support a wide range of business decisions ranging from operational to strategic. Basic operating decisions include product positioning or pricing. Strategic business decisions involve priorities, goals and directions at the broadest level. In all cases, BI is most effective when it combines data derived from the market in which a company operates (external data) with data from company sources internal to the business such as financial and operations data (internal data). When combined, external and internal data can provide a complete picture which, in effect, creates an "intelligence" that cannot be derived from any singular set of data. Amongst myriad uses, business intelligence tools empower organizations to gain insight into new markets, to assess demand and suitability of products and services for different market segments and to gauge the impact of marketing efforts.
Often[quantify] BI applications use data gathered from a data warehouse (DW) or from a data mart, and the concepts of BI and DW combine as "BI/DW" or as "BIDW". A data warehouse contains a copy of analytical data that facilitate decision support.
- 1 History
- 2 Definition
- 3 Components of the BI landscape
- 4 Data
- 5 Applications
- 6 Marketplace
- 7 See also
- 8 References
- 9 Bibliography
- 10 External links
The earliest known use of the term business intelligence is in Richard Millar Devens' Cyclopædia of Commercial and Business Anecdotes (1865). Devens used the term to describe how the banker Sir Henry Furnese gained profit by receiving and acting upon information about his environment, prior to his competitors:
Throughout Holland, Flanders, France, and Germany, he maintained a complete and perfect train of business intelligence. The news of the many battles fought was thus received first by him, and the fall of Namur added to his profits, owing to his early receipt of the news.— Devens, p. 210
The ability to collect and react accordingly based on the information retrieved, Devens says, is central to business intelligence.
When Hans Peter Luhn, a researcher at IBM, used the term business intelligence in an article published in 1958, 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." Business intelligence as it is understood today is said to have evolved from the decision support systems (DSS) 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.
In 1989, Howard Dresner (later a Gartner analyst) proposed business intelligence as an umbrella term to describe "concepts and methods to improve business decision making by using fact-based support systems." It was not until the late 1990s that this usage was widespread.
Critics[who?] see BI merely as an evolution of business reporting together with the advent of increasingly powerful and easy-to-use data analysis tools. In this respect it has also been criticized[by whom?] as a marketing buzzword in the context of the "big data" surge.
According to Forrester Research, business intelligence is "a set of methodologies, processes, architectures, and technologies that transform raw data into meaningful and useful information used to enable more effective strategic, tactical, and operational insights and decision-making." Under this definition, business intelligence encompasses information management (data integration, data quality, data warehousing, master-data management, text- and content-analytics, et al.). Therefore, Forrester refers to data preparation and data usage as two separate but closely linked segments of the business-intelligence architectural stack.
Some elements of business intelligence are:
- Multidimensional aggregation and allocation
- Denormalization, tagging, and standardization
- Realtime reporting with analytical alert
- A method of interfacing with unstructured data sources
- Group consolidation, budgeting and rolling forecasts
- Statistical inference and probabilistic simulation
- Key performance indicators optimization
- Version control and process management
- Open item management
Compared with competitive intelligence
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.
Compared with business analytics
Business intelligence and business analytics are sometimes used interchangeably, but there are alternate definitions. Thomas Davenport, professor of information technology and management at Babson College argues that business intelligence should be divided into querying, reporting, Online analytical processing (OLAP), an "alerts" tool, and business analytics. In this definition, business analytics is the subset of BI focusing on statistics, prediction, and optimization, rather than the reporting functionality.
Components of the BI landscape
The Business Intelligence landscape reflects the complex system which data goes through in order to get processed into information. One of the first steps of starting a BI program, is to understand all components of this landscape. The particularities of this system tend to differ based on the industry and organization, but at a macro level, all BI landscapes have the same format. It’s usually composed of five pillars and five foundation blocks:
The five pillars:
- Data source(s)
- Data integration
- Data management
- Information dissemination
The five foundation blocks:
- Information security
- Data quality
- Metadata management
- Data governance
- People & culture
Business operations can generate a very large amount of information in the form of e-mails, memos, notes from call-centers, news, user groups, chats, reports, web-pages, presentations, image-files, video-files, and marketing material. According to Merrill Lynch, more than 85% of all business information exists in these forms; a company might only use such a document a single time. Because of the way it is produced and stored, this information is either unstructured or semi-structured.
The management of semi-structured data is an unsolved problem in the information technology industry. According to projections from Gartner (2003), white collar workers spend 30–40% of their time searching, finding, and assessing unstructured data. BI uses both structured and unstructured data. The former is easy to search, and the latter contains a large quantity of the information needed for analysis and decision making. Because of the difficulty of properly searching, finding and assessing unstructured or semi-structured data, organizations may not draw upon these vast reservoirs of information, which could influence a particular decision, task or project. This can ultimately lead to poorly informed decision making.
Therefore, when designing a business intelligence/DW-solution, the specific problems associated with semi-structured and unstructured data must be accommodated for as well as those for the structured data.
Unstructured data vs. semi-structured data
Unstructured and semi-structured data have different meanings depending on their context. In the context of relational database systems, unstructured data cannot be stored in predictably ordered columns and rows. One type of unstructured data is typically stored in a BLOB (binary large object), a catch-all data type available in most relational database management systems. Unstructured data may also refer to irregularly or randomly repeated (nonrepetitive) column patterns that vary from row to row within each file or document.
Many of these data types, however, like e-mails, word processing text files, PPTs, image-files, and video-files conform to a standard that offers the possibility of metadata. Metadata can include information such as author and time of creation, and this can be stored in a relational database. Therefore, it may be more accurate to talk about this as semi-structured documents or data, but no specific consensus seems to have been reached.
Unstructured data can also simply be the knowledge that business users have about future business trends. Business forecasting naturally aligns with the BI system because business users think of their business in aggregate terms. Capturing the business knowledge that may only exist in the minds of business users provides some of the most important data points for a complete BI solution.
Limitations of semi-structured and unstructured data
There are several challenges to developing BI with semi-structured data. According to Inmon & Nesavich, some of those are:
- Physically accessing unstructured textual data – unstructured data is stored in a huge variety of formats.
- Terminology – Among researchers and analysts, there is a need to develop a standardized terminology.
- Volume of data – As stated earlier, up to 85% of all data exists as semi-structured data. Couple that with the need for word-to-word and semantic analysis.
- Searchability of unstructured textual data – A simple search on some data, e.g. apple, results in links where there is a reference to that precise search term. (Inmon & Nesavich, 2008) gives an example: “a search is made on the term felony. In a simple search, the term felony is used, and everywhere there is a reference to felony, a hit to an unstructured document is made. But a simple search is crude. It does not find references to crime, arson, murder, embezzlement, vehicular homicide, and such, even though these crimes are types of felonies.”
To solve problems with searchability and assessment of data, it is necessary to know something about the content. This can be done by adding context through the use of metadata. Many systems already capture some metadata (e.g. filename, author, size, etc.), but more useful would be metadata about the actual content – e.g. summaries, topics, people or companies mentioned. Two technologies designed for generating metadata about content are automatic categorization and information extraction.
Business intelligence can be applied to the following business purposes:
- Performance metrics and benchmarking inform business leaders of progress towards business goals (business process management).
- Analytics quantify processes for a business to arrive at optimal decisions, and to perform business knowledge discovery. Analytics may variously involve data mining, process mining, statistical analysis, predictive analytics, predictive modeling, business process modeling, data lineage, complex event processing and prescriptive analytics.
- Business reporting can use BI data to inform strategy. Business reporting may involve data visualization, executive information system, and/or OLAP
- BI can facilitate collaboration both inside and outside the business by enabling data sharing and electronic data interchange
- Knowledge management is concerned with the creation, distribution, use, and management of business intelligence, and of business knowledge in general. Knowledge management leads to learning management and regulatory compliance.
In a 2013 report, Gartner categorized business intelligence vendors as either an independent "pure-play" vendor or a consolidated "megavendor". In 2012 business intelligence services received $13.1 billion in revenue.
A 2009 paper predicted these developments in the business intelligence market:
- Because of lack of information, processes, and tools, through 2012, more than 35 percent of the top 5,000 global companies regularly fail to make insightful decisions about significant changes in their business and markets.
- By 2012, business units will control at least 40 percent of the total budget for business intelligence.
- By 2012, one-third of analytic applications applied to business processes will be delivered through coarse-grained application mashups.
A 2009 Information Management special report predicted the top BI trends: "green computing, social networking services, data visualization, mobile BI, predictive analytics, composite applications, cloud computing and multitouch". Research undertaken in 2014 indicated that employees are more likely to have access to, and more likely to engage with, cloud-based BI tools than traditional tools.
Other business intelligence trends include the following:
- Third party SOA-BI products increasingly address ETL issues of volume and throughput.
- Companies embrace in-memory processing, 64-bit processing, and pre-packaged analytic BI applications.
- Operational applications have callable BI components, with improvements in response time, scaling, and concurrency.
- Near or real time BI analytics is a baseline expectation.
- Open source BI software replaces vendor offerings.
Other lines of research include the combined study of business intelligence and uncertain data. In this context, the data used is not assumed to be precise, accurate and complete. Instead, data is considered uncertain and therefore this uncertainty is propagated to the results produced by BI.
According to a study by the Aberdeen Group, there has been increasing interest in Software-as-a-Service (SaaS) business intelligence over the past years, with twice as many organizations using this deployment approach as one year ago – 15% in 2009 compared to 7% in 2008.
An article by InfoWorld's Chris Kanaracus points out similar growth data from research firm IDC, which predicts the SaaS BI market will grow 22 percent each year through 2013 thanks to increased product sophistication, strained IT budgets, and other factors.
An analysis of top 100 Business Intelligence and Analytics scores and ranks the firms based on several open variables
- Accounting intelligence
- Analytic applications
- Artificial intelligence marketing
- Business activity monitoring
- Business Intelligence 2.0
- Business intelligence software
- Business process discovery
- Business process management
- Customer dynamics
- Decision engineering
- Enterprise planning systems
- Integrated business planning
- Management information system
- Mobile business intelligence
- Operational intelligence
- Process mining
- Real-time business intelligence
- Sales intelligence
- Test and learn
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[...] traditional business intelligence or data warehousing tools (the terms are used so interchangeably that they're often referred to as BI/DW) are extremely expensive [...]
- Miller Devens, Richard. Cyclopaedia of Commercial and Business Anecdotes; Comprising Interesting Reminiscences and Facts, Remarkable Traits and Humors of Merchants, Traders, Bankers Etc. in All Ages and Countries. D. Appleton and company. p. 210. Retrieved 15 February 2014.
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BI refers to the approaches, tools, mechanisms that organizations can use to keep a finger on the pulse of their businesses. Also referred by unsexy versions -- “dashboarding”, “MIS” or “reporting.”
- Evelson, Boris (21 November 2008). "Topic Overview: Business Intelligence".
- Evelson, Boris (29 April 2010). "Want to know what Forrester's lead data analysts are thinking about BI and the data domain?".
- Kobielus, James (30 April 2010). "What's Not BI? Oh, Don't Get Me Started....Oops Too Late...Here Goes..."
“Business” intelligence is a non-domain-specific catchall for all the types of analytic data that can be delivered to users in reports, dashboards, and the like. When you specify the subject domain for this intelligence, then you can refer to “competitive intelligence,” “market intelligence,” “social intelligence,” “financial intelligence,” “HR intelligence,” “supply chain intelligence,” and the like.
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- Inmon, B. & A. Nesavich, "Unstructured Textual Data in the Organization" from "Managing Unstructured data in the organization", Prentice Hall 2008, pp. 1–13
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