What is business intelligence?
Business Intelligence (BI, for short) according to Forrester Research 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.
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Why is business intelligence important?
It is crucial for any business to understand what is happening at any point of time. Good business intelligence highlights useful information, and tells a story. Instead of going just by the gut, BI helps in building data driven organizations. It can provide valuable and more importantly, actionable insight into any data.
In this era of big data, businesses need a versatile Business Intelligence software that would solve all their requirements. BI software has become a vital component of any business and its processes. The effectiveness of any BI software lies in how easy it is to deploy, how easy it is for business users to use, how much value it provides by uncovering hidden insights, and how cost effective it is.
Broad goals of business intelligence
Any BI software should be able to address needs relevant to specific business requirements, especially in terms of improving operational efficiency, revenue growth, gaining competitive advantage and enhancement of customer service.
Be it top-level executives, mid-level managers or other employees, they should be able to easily find the insights they look for. This calls for Business Intelligence tools to be intuitive, user-friendly and most importantly, supportive of ad-hoc exploratory analysis.
Hence, for any BI software, the major goals are:
Tracking Business Performance: To achieve desirable business outcomes, it is imperative to facilitate timely decision-making, which is possible through monitoring and benchmarking key performance indicators.
Easier Insights Consumption: Presenting data in the form of easy-to-digest dashboards and reports, shall definitely aid in extracting the best meaning out of the business performance insights available.
Collaborative Analytics: Insights available in the form of BI dashboards and reports, should be easily shareable with the stakeholders across the organizational hierarchy.
How business intelligence works?
For any kind of Business Intelligence to work, it needs a proper systemic framework in place, to seamlessly churn and deliver business relevant insights.
A break-down of this framework shall be seen as follows:
- Data Collection: Business data of any nature, that lies scattered across flat files, feeds, databases, cloud storage and business applications is gathered for further analysis and reporting.
- Data Preparation: Data collected from different sources goes through a sequence of steps : integration, modelling, cleansing, preparation and enrichment, before organizing it into an analytics-ready format.
- Intelligent Analytics: Derive maximum value out of the available data, by doing analysis to uncover insights about - 1.what had happened 2. why and how did it happen and even go ahead to predict 3. What might happen.
- Data Visualisation: Analytical insights can be made easily consumable through dashboards and reports, that shall be built with an easy-to-use drag-and-drop interface.
- Sharing and Collaboration: The insightful reports and dashboards can be shared with each other, for collaborative analytics and informed decision-making.
Types of business intelligence software and tools
Business intelligence domain encompasses a diverse range of software and tools, catering to various business needs and usage preferences. Some common types include:
Traditional BI
tools which would require the intervention of skilled IT workers to analyze and prepare reports/dashboards.
Self-service BI
tools that allow line-of-business users to build interactive, shareable reports/dashboards by using a drag-and-drop interface
Cloud BI
tools offer the BI & Analytics capabilities natively on cloud platforms, thereby enabling users to access them via the internet.
Open-source BI
Tools provide the required capabilities for analysis, reporting and visualization without the constraints of a proprietary software.
Examples of Business Intelligence
In the traditional way, computing business intelligence manually isn't sustainable anymore. Companies now handle large volumes of data and that demands highly automated analytics tools that offer self-service business intelligence, which can facilitate faster decision-making, across the organisation's stretch.
Using the latest self-service BI tools, tracking essential business KPIs in real-time is now made easier through rich and powerful data visualisations. Here are a few examples of how business intelligence finds its usage across different disciplines
- Sales
- Marketing
- Finance
Sales
Business Intelligence for Sales involves monitoring the effectiveness of Sales Pipeline, Sales Operations and Sales Team Performance across all relevant segments. The insights shall also aid in forecasting and prediction of future outcomes, thereby helping sales leaders to set and revise targets continually. Learn more about Sales BI and Analytics.
Marketing
A continuous understanding of customer behaviour is paramount for planning and tweaking marketing activities. Subsequently it is important to track the marketing impact in terms of audience engagement, conversion-rates and cost-effectiveness of various channels.These are a few highlights of what marketing business intelligence can offer.Learn more about Marketing BI and Analytics.
Finance
The enumeration of in-depth financial data enables better financial planning and tracking of financial performance. The insights at hand shall also be used to forecast key-indicators, notably Cash-flow, expenditure, revenue and profitability, for continuous planning and execution. Learn more about Finance BI and Analytics.
How do companies use business intelligence?
Organizations use business intelligence(BI) to convert raw data into actionable insights that'll be useful for decision-making and improving business performance.
Some of the key situations in which companies use business intelligence are:
Data analysis & reporting
involves the process of collection, cleansing, transformation and interpretation of data to visualize patterns, trends, and correlations and present them in easily consumable formats for business stakeholders
Performance monitoring
involves continuous evaluation and tracking of key performance indicators(KPIs) at different levels(i.e overall, departments, teams and individuals) of an organization.
Strategic planning
involves the understanding of internal business factors and external market factors to eventually draw the strategoc business roadmap.
Customer Intelligence
refers to understanding the different group segments and individual personas of the organization's customers to the finest detail possible.
Predictive analytics
leverages historical data to make highly accurate forecast about the possible future business outcomes.
Human resources management
leverages business intelligence to understand finer details about employees for their rewards & recognitions, upskilling and retention.
Transform your data using Business Intelligence
A self-service BI pioneer for over a decade, Zoho Analytics is now used by more than 10 million business users, and 100,000 businesses in 120+ countries around the world.
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Sign up for freeFrequently Asked Questions
Why business intelligence is important
- Business Intelligence (BI) is important for organizations across industries to drive:
- Informed decision-making
- Operational efficiency
- Business performance
- Competitive advantage
Business intelligence best practices
- Some of the key business intelligence practices that organizations should consider:
- Implementation of robust data management practices that include data cleansing, transformation, and enrichment to ensure the accuracy, completeness and reliability of data.
- Develop meaningful reports/dashboards that align with business objectives and stakeholder requirements.
- Continuously monitor the performance of BI dashboards and reports and resolve bottlenecks to ensure timely information access.
- Implement robust security measures to protect sensitive data and also ensure regulatory compliance
What are business intelligence software and tools
- Business Intelligence (BI) software enables the collection, integration, and transformation of raw data into meaningful insights. A typical BI tool offers a range of features like data integration, preparation, analytics & reporting, sharing and collaboration etc.
What you should look for in a business intelligence solution
- Here are some key factors to consider when evaluating a suitable BI solution:
- Robust data integration capabilities with the availability of extensive pre-built connectors.
- An easy-to-use drag and drop visualization builder that can leverage a wide variety of data visualization elements to create interactive reports/dashboards
- Effectiveness of advanced analytics features like predictive analytics and AI-powered capabilities
- Accessibility to BI reports/dashboards anytime from anywhere
- Scalability to match with growing volumes, and business requirements.