What is Business Intelligence (BI)?
What advantages does BI software offer you?
In order to be successful, business decisions must be made faster and faster. Yet this is not so easy in an uncertain environment. Business Intelligence (BI) tools help to make such decisions based on accurate data and analysis. We explain what exactly BI is and what advantages the use of a BI solution brings you.
What is BI?
The term BI covers all tools, processes, technologies, applications and methods used to make informed, data-driven business decisions. This includes collecting data from internal and external sources, preparing it for analysis, developing queries and executing them. Reports, dashboards and data visualisations are created and made available to a company’s decision-makers and operational staff.
A company-wide BI concept interlocks data in order to recognise correlations between all areas of the company and to draw conclusions. For this purpose, data is collected, aggregated, evaluated and processed centrally. In this way, the data serves as the basis for important strategic decisions.
>> With the help of BI, data is collected, analysed, findings are derived, presented visually in an easy-to-understand way and translated into concrete measures. <<
The term Business Intelligence first appeared in 1958 in the article “A Business Intelligence System” by Hans Peter Luhn. However, the term was coined primarily in the 1990s by the Gartner Group and has since evolved considerably. While initially it was mainly data analysts and IT experts who carried out the analyses and created reports, there are now a large number of tools with which every employee can create analyses themselves. Classic areas of application are especially controlling and finance. In the meantime, however, many managers and employees are using self-service BI to gain an overview and understanding of the ever-growing volume of data independently of IT. Self-service BI means that a users can run queries and generate reports or ad-hoc analyses without extensive knowledge of statistics. Such tools are therefore intuitive, user-friendly and offer real-time access to all the data needed.
Why is BI important for companies?
With the help of BI tools, decision-making processes can be improved and accelerated. Internal business processes can be optimised and, for example, profits increased. In addition, BI can be used to detect trends and identify problems.
On the one hand, this works by looking at the data collected in the past, i.e. reporting takes place. On the other hand, the data is also used to project it into the future for planning purposes and thus generate new insights. In this way various scenarios for the future can be analysed, for example.
Business intelligence is often divided into two areas: Data Analysis and Advanced Analytics.
Data analysis deals with the collection and evaluation of company and market data. This allows, for example, information on customer behaviour or marketing campaigns to be collected and analysed. This helps with operational decisions. This helps with operational decisions. Advanced analytics, on the other hand, help to identify developments and trends in the market at an early stage so that appropriate actions can be derived.
Benefits of BI
- Faster reactions: automated information management analyses data in real time, improving management responsiveness.
- Better decisions: significant data and analysis result in reliable information that facilitates decision-making.
- Increased efficiency: Business processes can be analysed and related to each other. This allows problems to be identified quickly and processes to be optimised.
- Exploit potential savings: with the help of BI, resource planning can be improved and productivity increased.
- Fast reporting: Real-time reports with up-to-date, high-quality data are available at any time at the touch of a button. The preparation of the data is simple and enables visually appealing as well as easily understandable presentations.
- Detect trends: a BI system can detect data trends and patterns. This allows decisions to be made, priorities to be set and resources to be allocated accordingly. Furthermore, since external data can also be analysed and correlated, important market trends can be identified.
- Satisfied customers: through optimised processes, improved strategy decisions as well as a constant overview of the most important key figures, you can ensure the satisfaction of your customers in the long term.
Areas of application
- Strategic planning
- Resource management
- Product development / Product Lifecycle Management
- Production planning
- Sales planning
- Marketing planning
The most important functions of BI tools
- OLAP (Online Analytical Processing): Is the core of BI and enables the analysis of large amounts of historical data in different dimensions with drill-down functions.
- Operational BI: Helps process incoming data in real time to ensure transparency at all times. With these insights, quick reactions are possible.
- Ad-hoc-analyses: Reports that can be created by any user of the tool at any time.
- Reporting: An active system generates automatic reports at periodic intervals defined by you or when important threshold values are exceeded.
- Advanced Analytics: Enable the prediction of future outcomes and the making of recommendations.
- Self-Service-BI: Enables users to query, report and gain valuable insights through interactive dashboards without extensive training.
- Integration: To gain meaningful insights, BI systems should be integrated with different data sources, such as CRM or ERP systems.
Business Intelligence can help you to achieve a decisive competitive advantage over your competitors, to make the right decisions as well as to take appropriate measures.
Would you like to get to know myPARM BIact in a demo presentation? Then make an appointment with us right away!