Business Intelligence is not just Information

in Business Management
Business Process Management

BI Includes the Technologies, Applications and Practices Used

Business analytics, reporting, dashboard, performance management, data mining, process mining, OLAP, spreadsheets and other software tools all fall under the term BI.

Business decisions are usually made on the basis of past experience, though they can also be based on qualitative considerations or rules of thumb. Past experience typically consist of an overwhelming mass of data.

BI tools and techniques are used to mine this data and extract meaningful information out of it.

Business Analytics and Reporting

Many different tools are used for data analysis and information reporting. Before the arrival of computers, it was middle managers who collected data from operating levels, analyzed it and reported to higher levels of management.

When computers arrived, they were helped by tools like spreadsheets in this task.

However, computers began to automate the task and middle managers tended to get displaced by laptops and tablets of senior managers.

Data were recorded in databases, and were analyzed when queried to generate information reports. Networked computers made it possible for managers to access even data generated in other departments.

Enterprise reporting systems extended the capabilities by integrating data generated anywhere in the global enterprise. Business dashboards presented a higher level overview and managers could now select any item and drill down to operational level details residing in some distant computer.

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The emphasis was on analysis. For example, it is not OLTP – Online Transaction Processing – but OLAP – Online Analytic Processing – that fall under business intelligence.

Data warehouses enabled data mining that could detect hidden patterns such as customer profiles by analyzing the huge volume of customer data. It was now possible to generate distinct customer profiles for customers in different geographical regions, for example.

Another BI function was process mining. Process mining typically involved analyzing event logs to develop business process profiles. This is particularly useful when processes are difficult to define or where process documentation is not of satisfactory quality.

Business Performance Management

Business intelligence ultimately aims at business performance management. It forces attention to all aspects involved in performance, such as goals, resources, plans, methodologies, processes, metrics, business data and systems.

Tools such as six sigma, balanced scorecard and TQM adopt a total picture of the business and seek to control performance by attending to every critical issue.

BPM involves in essence setting clear and measurable goals, developing plans to achieve the goals, organizing resources to implement the plans, and keeping track of what is going on through measuring everything, analyzing the data and providing reports to managers.

The reports will highlight any deviations from desired results and analyze the specific factors that caused the deviations.

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Each level of manager is presented with summarized reports on the areas under his or her control, and can drill down to details to get meaningful insights. Under such an environment, it becomes possible to base business decisions on experience, instead of hunches. Business performance tends to improve.

Business intelligence covers both the business information, and the technologies, applications, tools and practices used to generate that information. Information is obtained by analyzing the large quantities of data that are generated in the course of business operations.

Modern BI tools enable extracting customized information and drilling down from top level views into the underlying details.

Business performance management becomes more effective when a total view is taken and all aspects affecting performance are measured and reported upon.

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