What is Business Intelligence (BI)?
What are the benefits of BI software for you?
To be successful, business decisions must be made faster and faster. But that’s not so easy in an uncertain environment. Business Intelligence (BI) tools help you make such decisions based on accurate data and analyses. We’ll explain exactly what BI is and what benefits using a BI solution can bring you.
What is BI?
The term BI refers to all the 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, and developing and executing queries. Reports, dashboards, and data visualizations are created and made available to decision-makers and operational staff within a company.
A company-wide BI strategy integrates data to identify connections across all business units and draw conclusions. To this end, data is centrally collected, aggregated, analyzed, and prepared. In this way, it serves as the foundation for important strategic decisions.
>> With the help of BI, data is collected, analyzed, insights are derived, the data is presented visually in an easy-to-understand way, and the insights are translated into concrete actions. <<
The term “business intelligence” first appeared in 1958 in Hans Peter Luhn’s article “A Business Intelligence System.” However, it was primarily popularized in the 1990s by the Gartner Group and has since evolved significantly. While initially it was mainly data analysts and IT experts who performed the analyses and created reports, there are now a large number of tools that allow any employee to conduct analyses on their own. Traditional areas of application are primarily the corporate departments of controlling and finance. However, many managers and employees now use self-service BI to gain an overview of and understand the ever-increasing volume of data without relying on IT. Self-service BI means that a user can run queries and generate reports or ad hoc analyses on their own, without extensive knowledge of statistics. Such tools are therefore intuitive to use, user-friendly, and offer real-time access to all necessary data.
Why is BI important for companies?
BI tools can be used to improve and accelerate decision-making processes. Internal business processes can be optimized, leading, for example, to increased profits. In addition, BI can be used to recognize trends and identify problems.
On the one hand, this works by analyzing data collected in the past—in other words, through reporting. On the other hand, the data is also used to project into the future for planning purposes, thereby generating new insights. For example, various future scenarios can be analyzed.
Business intelligence is often divided into two areas: data analysis and advanced analytics.
Data analysis involves the collection and evaluation of company and market data. This allows, for example, information on customer behavior or marketing campaigns to be gathered and analyzed. This aids in operational decision-making. In contrast, advanced analytics help identify market developments and trends at an early stage, enabling appropriate actions to be taken.
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 analyzed and correlated with one another. This allows problems to be identified quickly and processes to be optimized.
- Exploit potential savings: with the help of BI, resource planning can be improved and productivity increased.
- Fast Reporting: Real-time reports featuring up-to-date, high-quality data are available at any time with the click of a button. Data preparation is simple and enables visually appealing and easy-to-understand presentations.
- Identifying Trends: A BI system can identify data trends and patterns. This enables decision-making, the setting of priorities, and the allocation of resources accordingly. Since external data can also be analyzed and correlated, important market trends can be identified as well.
- 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): This is the core of BI and enables the analysis of large volumes of historical data across various dimensions using drill-down functions.
- Operational BI: Helps process incoming data in real time, ensuring transparency at all times. These insights enable rapid responses.
- 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 regular intervals that you define, or when key thresholds 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.
Conclusion
Business intelligence can help you gain a decisive competitive advantage over your competitors, make the right decisions, and take appropriate action.
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