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What is BI? Business intelligence definition and solutions

Mary K. Pratt | Sept. 4, 2017
Business intelligence (BI) leverages software and services to transform data into actionable intelligence that informs an organization’s strategic and tactical business decisions.

Organizations chose a BI platform based on various factors, including the size and complexity of their operations as well as what type of technology they already have (i.e. IBM, Oracle, SAS, SAP — all of which offer BI tools), Hagans says.

 

Business intelligence in action

In the past, IT professionals had been the primary users of BI applications. However, BI tools have evolved to be more intuitive and user-friendly, enabling a large number of users across a variety of organizational domains to tap the tools.

Gartner’s Howson differentiates two types of BI. The first is traditional or classic BI, where IT professionals use in-house transactional data to generate reports. The second is modern BI, where business users interact with agile, intuitive systems to analyze data more quickly.

Howson explains that organizations generally opt for classic BI for certain types of reporting, such as regulatory or financial reports, where accuracy is paramount and the questions and data sets used are standard and predicable. Organizations typically use modern BI tools when business users need insight into quickly changing dynamics, such as marketing events, in which being fast is valued over getting the data 100 percent right.

 

The rise of self-service BI

Software vendors are reacting to the organizational demand for multiple capabilities — classic and modern BI as well as descriptive and predictive — by re-engineering their products to include multiple functionalities within their platforms, Howson says.

“All vendors in this traditional world have been retooling to meet these use cases — IT driven and business user, descriptive and also diagnostic and predictive,” she says. “And if I come at it from the other side, [the vendors] on the business-user side and not IT-supported, which didn’t have reporting as a function, they’re acquiring technology and printing to do both, too.”

However, Hagans says IT still plays a vital role around BI in many organizations, even in workplaces where IT has enabled self-service BI for business users. IT still has to set and manage policies, governance and enablement around the data and access to it as well as continually work with users to ensure the BI tools are delivering the insights they seek.

 

The value of business intelligence

Although much of today’s hype is around big data and advanced analytics (as well as the next step up: artificial intelligence and machine learning), BI is still relevant for multiple reasons.

First, experts say that many organizations still struggle with how to wrangle their data and leverage BI tools to their full potential. As a result, University of Dayton’s Gorman says most organizations tend to have pockets of BI capabilities rather than an enterprise-wide platform.

“You might have an executive dashboard that gives something like prices by region and another executive using a BI tool that gives vendor performance,” he says.

 

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