An Introduction to Business Intelligence (BI)

What is Business Intelligence (BI)?

According to Wikipedia, Business Intelligence “…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.” This definition describes the ‘how’ of Business Intelligence, not the ‘what’ of Business Intelligence. I would define Business Intelligence as translating data into a collection of information called “intelligence.” A business or organization can use the intelligence to make decisions, improve processes, gain insights into functionality and predict future trends.

Consider the Purpose and Culture of an Organization

Business Intelligence (BI) also must consider the culture and purpose of an organization. It doesn’t make sense for a service-based business to worry about the volume of products sold. It doesn’t make sense for a manufacturing business to worry about how many emails arrived over the course of a six-month period. Instead, a service-based business, such as a call support center, could worry about how fast customers get help or how long phone calls take. A manufacturing business could worry about the inventory that has not shipped or sold over the course of a six-month period.

Use Data to Build Information

Tools and technology are important in the scope of BI, but not necessarily critical in the delivery of information as data can come from various sources. Relational Databases are common data storage repositories, and are hosted on servers so the data is accessible across an organization. There are several database server choices, as presented in the 2017 Gartner Magic Quadrant Database Management graphic from October 2016:

An Introduction to Business Intelligence (BI) - Database

These are not the only data sources but they are the ones more commonly used. Data can come from spreadsheets, text files, word processing documents, web pages and web sites. Data comes in all shapes and sizes, so management of that data is important to the overall scope of the intelligence needs of an organization.

Refine Information Into Intelligence

Once data is available to use, it needs to be refined into information, which is a two-step process. The first step is removing unwanted elements from data as fields that relate data objects are not always necessary. The second step is to improve the data by adding information to the data object to provide context. In other words, a product “key” shouldn’t be the same as a model number or series number. However, a model number and a series number are important “attributes” of a product. We also have “facts” related to a product, such as the number sold in a span of time, like a month, week or a year.

Above All Else Show the Data (Edward Tufte)

Edward Tufte is a statistician and professor who is a pioneer in information presentation, communication and design. In “The Visual Display of Quantitative Information,” he stated that “above all else, show the data.” This is the first point of the Data-Ink Ratio, an idea that information presented visually should limit the graphics used, show context of the data and should always be a true representation of data. This principle can also be applied to refining information into intelligence. Only include what is needed when refining information. Unless the color or size is important to the context of the data and the story we want to tell, it shouldn’t be included.

Tell a Story With the Intelligence

The most fundamental purpose of intelligence is to tell a story. The story should be a true and accurate representation of questions asked and answers given. If I ask a question about a billing statement, I’m not worried about choices to add on to a service. I’m worried about a line item or the total cost shown in the bill. If I ask a question about a pair of trousers bought, I’m worried about the size and the color, not necessarily the cost of the trousers or the total cost of my purchases.

Extend Your Story With Visualizations

There are also several Business Intelligence products, also presented in the 2017 Gartner BI Magic Quadrant graphic from February 2017:

An Introduction to Business Intelligence (BI) - Analytics

Keep in mind that fundamentally, these tools do the same thing and they all represent a way to present intelligence and insights for an organization. Each tool can present visualizations of data in different ways. Like most tools, they are designed for creating and building presentations. They don’t understand an organizational purpose and culture. They can’t automatically turn data into information, then refine the information into intelligence and insight. They can’t automatically decide on the context surrounding an intelligence story. They can’t discover the best visualization for an intended audience. These tools enable a human to “curate” and create business intelligence.

CURATE (The Most Important Core BI Concept)

The most important idea to take away from this article about the core of Business Intelligence is to “CURATE.”

  • Consider the purpose and culture of an organization
  • Use data to build information
  • Refine information into intelligence
  • Above all else show the data (Edward Tufte)
  • Tell a story with the intelligence
  • Extend your story with visualizations

Summary

Business Intelligence is more than just charts, graphs and grids. Business Intelligence is gathering data, transforming data into information, then turning information into insights about a business. Once you have insight, you have the power to make better informed decisions. You have the power to see where you have been and predict where you are going with confidence. You have the answers to questions you didn’t know you asked. This is Business Intelligence.

Free Guide - Choosing the right custom software development partner

Stay Up-to-Date with the Latest in Custom Software With Brainspire's Monthly Newsletter