Business Intelligence (BI) describes the tools that enable businesses to collect and organize raw data in order to decipher, analyze, contextualize and derive insights and make informed business decisions. To these ends, business intelligence systems employ many technologies and techniques.
Business professionals must have a solid understanding of how BI and data analysis processes work, however, to help their enterprises thrive. An advanced business degree with a focus on business analytics can prepare professionals with these important data aptitudes.
Four Main Components of Business Intelligence Systems
There are four aspects of BI systems professionals can utilize:
- Data warehouses that store and centralize information for accessibility
- Analytics tools that mine and analyze data
- Business performance management tools that monitor and analyze key performance indicators
- The user interface or dashboard with data visualization tools
Today, the world's leading companies leverage business intelligence systems to mine data for actionable insights. However, there is no more effective way to understand internal and external operating business environments and compete with other BI-equipped businesses.
How BI Is Used to Draw Conclusions through Data Analysis
Data gathered from a wide range of sources is used to understand and improve proprietary processes in every business function, as well as market conditions and opportunities. BI systems describe past and current conditions through descriptive analytics, make projections and forecasts through predictive analytics, and point to opportunities to guide future actions through prescriptive analytics.
Each business function generates unique data, and BI provides the tools to perform analyses and draw meaningful conclusions. Some of the ways in which BI enables professionals to reach more accurate and actionable findings include:
- Visualization dashboards: Graphic representations provide contextualization of data which leads to instant insights.
- BI applications and integration: Software systems integrated across business functions improve BI system performance and enable organizations to make data accessible through queries for analysis.
- Mobility solutions: Mobile devices and software enables a mobile workforce to handle business from anywhere and capture and analyze data from more sources.
- Key performance indicator (KPI) targeting: Software assists companies in measuring actionable data and understanding trends in order to drive more profitable decisions.
How BI Drives the Decision-Making Process
BI tools allow professionals to better understand what contributes to successful candidate recruitment and employee performance in human resources (HR). It enables HR leaders to track and understand the causes of employee engagement, development, retention, regression and attrition. With BI, HR professionals can better retain top talent, extract better performance from the workforce and avoid the attrition that leads to costly personnel replacements.
In sales and marketing, BI can aggregate and organize information from disparate sources in order to form an accurate picture of success and the customer journey. BI tools track and evaluate advertising and marketing campaigns, response rates, conversion rates, customer preferences, sales trends, product trends, competitive moves and the effects of changes in pricing. They can provide real-time insights into consumer behaviors as well as track and improve key performance metrics including cost-of-customer acquisition and lifetime customer value.
In research and development, BI tools can develop a complete picture of the market, available opportunities and smart areas of investment with the lowest manufacturing costs and highest possible profitability projections. These tools can develop clear insights into consumer behavior and trends and support accurate forecasts about what will sell in the future.
In customer service, BI tools can help executives understand when interventions are necessary in the customer journey to improve the experience. These tools can identify critical pain points to improve future R&D, manufacturing and marketing efforts. They can track customer service representative performance so leaders can guide each employee's customer experience performance. They can also provide insights that lead to cost-effective ways to resolve customer complaints.
In finance, BI tools can help executives gain insights by combining data from operations, accounting, marketing and sales. They can also help identify the best financing sources for prospective projects, considering all the variables.
In the supply chain, BI can aggregate and organize vast amounts of data about vendors, shipping companies, routes and more to improve efficiencies and get products in the hands of consumers more quickly.
The Power of an Advanced Degree
Business intelligence is the present and future of business — as BI capabilities can impact everything from HR to research to finance. Its capabilities will continue to evolve at an accelerating rate, making an advanced education degree in data analytics an extraordinary asset for those with a desire to harness the growing power of BI and information analysis.
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