What is business intelligence? Transforming data into business insights (2023)

Business intelligence definition

Business intelligence (BI) leverages software and services to transform data into actionable insights that inform an organization’s strategic and tactical business decisions. BI tools access and analyze data sets and present analytical findings in reports, summaries, dashboards, graphs, charts and maps to provide users with detailed intelligence about the state of the business.

The term business intelligence often also refers to a range of tools that provide quick, easy-to-digest access to insights about an organization’s current state, based on available data.



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(Video) Business Intelligence: Transforming Data Into Insights

Business intelligence examples

Reporting is a central facet of business intelligence and the dashboard is perhaps the archetypical BI tool. Dashboards are hosted software applications that automatically pull together available data into charts and graphs that give a sense of the immediate state of the company.

Although business intelligence does not tell business users what to do or what will happen if they take a certain course, neither is BI solely about generating reports. Rather, BI offers a way for people to examine data to understand trends and derive insights by streamlining the effort needed to search for, merge and query the data necessary to make sound business decisions.

For example, a company that wants to better manage its supply chain needs BI capabilities to determine where delays are happening and where variabilities exist within the shipping process, says Chris Hagans, vice president of operations for WCI Consulting, a consultancy focused on BI. That company could also use its BI capabilities to discover which products are most commonly delayed or which modes of transportation are most often involved in delays.

The potential use cases for BI extend beyond the typical business performance metrics of improved sales and reduced costs, says Cindi Howson, research vice president at Gartner, an IT research and advisory firm. She points to the Columbus, Ohio, school system and its success using BI tools to examine numerous data points — from attendance rates to student performance — to improve student learning and high school graduate rates.

BI vendors Tableau and G2 also offer concrete examples of how organizations might put business intelligence tools to use:

  • A co-op organization could use BI to keep track of member acquisition and retention.
  • BI tools could automatically generate sales and delivery reports from CRM data.
  • A sales team could use BI to create a dashboard showing where each rep’s prospects are on the sales pipeline.

Business intelligence vs. business analytics

One thing you will have noticed from those examples is that they provide insights into the current state of the business or organization: where are sales prospects in the pipeline today? How many members have we lost or gained this month? This gets to the key distinction between business intelligence and another, related term, business analytics.

Business intelligence is descriptive, telling you what’s happening now and what happened in the past to get us to that state. Business analytics, on the other hand, is an umbrella term for data analysis techniques that are predictive — that is, they can tell you what’s going to happen in the future — and prescriptive — that is, they can tell you what you should be doing to create better outcomes. (Business analytics are usually thought of as that subset of the larger category of data analytics that’s specifically focused on business.)

The distinction between the descriptive powers of BI and the predictive or descriptive powers of business analytics goes a bit beyond just the timeframe we’re talking about. It also gets to the heart of the question of who business intelligence is for. As the Stitchdata blog explains, BI aims to deliver straightforward snapshots of the current state of affairs to business managers. While the predictions and advice derived from business analytics requires data science professionals to analyze and interpret, one of the goals of BI is that it should be easy for relatively non-technical end users to understand, and even to dive into the data and create new reports.

(Video) Business Intelligence – Understanding and Transforming Data into Valuable Business Insights

For more, see “Business intelligence vs. business analytics: Where BI fits in your data strategy.”

Business intelligence strategy

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.

But while solid business intelligence is essential to making strategic business decisions, many organizations struggle to implement effective BI strategies, thanks to poor data practices, tactical mistakes and more.

For more, see “8 keys to a successful business intelligence strategy” and “9 ways you’re failing at business intelligence.”

Self-service business intelligence

The drive to make it possible for just about anyone to get useful information out of business intelligence tools has given rise to self-service business intelligence, a category of BI tools aimed at abstracting away the need for IT intervention in generating reports. Self-service BI tools enable organizations to make the company’s internal data reports more readily available to managers and other nontechnical staff.

Among the keys to self-service BI success are business intelligence dashboards and UIs that include pull-down menus and intuitive drill-down points that allow users to find and transform data in easy-to-understand ways. A certain amount of training will no doubt be required, but if the advantages of the tools are obvious enough, employees will be eager to get on board. (If you’re shopping for a self-service BI solution, CIO.com’s Martin Heller walks you through the decision making process and compares his top five choices.)

(Video) SAP Data Intelligence on Red Hat OpenShift transforms data assets into business insights

Keep in mind, though, that there are pitfalls to self-service BI as well. By steering your business users into becoming ad hoc data engineers, you can end up with a chaotic mix of metrics that vary across departments, run into data security problems, and even run up big licensing or SaaS bills if there’s no centralized control over tool rollout. So even if you are committing to self-service business intelligence within your organization, you can’t just buy an off-the-shelf product, point your staff to the UI, and hope for the best.

Business intelligence software and systems

A variety of different types of tools fall under the business intelligence umbrella. The software selection service SelectHub breaks down some of the most important categories and features:

  • Dashboards
  • Visualizations
  • Reporting
  • Data mining
  • ETL (extract-transfer-load —tools that import data from one data store into another)
  • OLAP (online analytical processing)

Of these tools, SelectHub says the dashboards and visualization are by far the most popular; they offer the quick and easy-to-digest data summaries that are at the heart of BI’s value proposition.

There are tons of vendors and offerings in the BI space, and wading through them can get overwhelming. Some of the major players include:

  • Tableau, a self-service analytics platform provides data visualization and can integrate with a range of data sources, including Microsoft Azure SQL Data Warehouse and Excel
  • Splunk, a “guided analytics platform” capable of providing enterprise-grade business intelligence and data analytics
  • Alteryx, which blends analytics from a range of sources to simplify workflows as well as provide a wealth of BI insights
  • Qlik, which is grounded in data visualization, BI and analytics, providing an extensive, scalable BI platform
  • Domo, a cloud-based platform that offers business intelligence tools tailored to various industries (such as financial services, health care, manufacturing and education) and roles (including CEOs, sales, BI professionals and IT workers)
  • Dundas BI, which is mostly used for creating dashboards and scorecards, but can also do standard and ad-hoc reporting
  • Google Data Studio, a supercharged version of the familiar Google Analytics offering
  • Einstein Analytics, Salesforce.com’s attempt to improve BI with AI
  • Birst, a cloud-based service in which multilple instances of the BI software share a common data backend.

For a deeper look at today’s most popular business intelligence systems, see “Top 12 BI tools” and “Top 10 BI data visualization tools.”

Business intelligence analyst

Any company that’s serious about BI will need to have business intelligence analysts on staff. CIO.com has an in-depth article on what that job entails; in general, they aim to use all the features of BI tools to get the data that companies need, the most important being discovering areas of revenue loss and identifying where improvements can be made to save the company money or increase profits.

Even if your company relies on self-service BI tools on a day-to-day basis, business intelligence analysts have an important role to play, as they are necessary for managing and maintaining those tools and their vendors. They also set up and standardize the reports that managers are going to be generating to make sure that results are consistent and meaningful across your organization. And to avoid garbage in/garbage out problems, business intelligence analysts need to make sure the data going into the system is correct and consistent, which often involves getting it out of other data stores and cleaning it up.

Business intelligence analyst jobs often require only a bachelor’s degree, at least at the entry level, though to advance up the ranks an MBA may be helpful or even required. As of October 2019, the median business intelligence salary is around $67,500, though depending on your employer that could range from $49,000 to $94,000.

(Video) Business Intelligence - Turning data into insights.

The future of business intelligence

Moving ahead, Howson says Gartner sees a third wave of disruption on the horizon, something the research firm calls “augmented analytics,” where machine learning is baked into the software and will guide users on their queries into the data.

“It will be BI and analytics, and it will be smart,” she says.

The combinations included in these software platforms will make each function more powerful individually and more valuable to the businesspeople using them, Gorman says.

“Someone will look at reports from, for example, last year’s sales — that’s BI — but they’ll also get predictions about next year’s sales — that’s business analytics — and then add to that a what-if capability: What would happen if we did X instead of Y,” Gorman says, explaining that software makers are moving to develop applications that will provide those functions within a single application rather than delivering them via multiple platforms as is now the case.

“Now the system delivers higher-value recommendations. It makes the decision-maker more efficient, more powerful and more accurate,” he adds.

And although BI will remain valuable in and of itself, Howson says organizations can’t compete if they’re not moving beyond only BI and adopting advanced analytics as well.

In fact, Gartner’s Magic Quadrant report predicts that by 2020 organizations offering “users access to a curated catalog of internal and external data will realize twice the business value from analytics investments than those that do not.”

Howson adds: “There is a need for reporting, but reporting alone is not enough. If you’re only doing reporting you’re behind already. Unless your reporting is smart and agile, you’re behind. You’re a laggard.”

(Video) Tableau for Business Insights & Intelligence I UBS

More on BI:

  • Top 7 business intelligence trends
  • Keys to a successful business intelligence strategy
  • Top 12 BI tools
  • 9 ways you’re failing at business intelligence
  • How to get more value from business intelligence


What is business intelligence turning data into business insights? ›

Business intelligence includes data analytics and business analytics but uses them only as parts of the whole process. BI helps users draw conclusions from data analysis. Data scientists dig into the specifics of data, using advanced statistics and predictive analytics to discover patterns and forecast future patterns.

What are the 4 concepts of business intelligence? ›

Business intelligence (BI) refers to the procedural and technical infrastructure that collects, stores, and analyzes the data produced by a company's activities. BI is a broad term that encompasses data mining, process analysis, performance benchmarking, and descriptive analytics.

What is business intelligence and how it is related to market research? ›

Business Intelligence Market Research Introduction

Business Intelligence is an emerging area of study that involves the usage of big data to identify trends, patterns and form strategies for business.

What does business intelligence really mean to a business? ›

Business intelligence is the process by which enterprises use strategies and technologies for analyzing current and historical data, with the objective of improving strategic decision-making and providing a competitive advantage.

What are the 5 stages of business intelligence? ›

The five stages of business intelligence are Data Sourcing, Data Engineering & Analysis, Situation Awareness, Decision Making, and Decision Support. In terms of complexity, it can be Reporting, Analysis, Monitoring, Predicting & Forecasting, and Predictive Modeling.

What is an example of business intelligence? ›

Most organizations do some form of business intelligence, but it's not uncommon for a lot of it to be manual work. For instance, a small startup's “data gathering” may be manually exporting CSVs from each data source. If they store all those spreadsheets on Google Drive, that's essentially their data warehouse.

What are the three core components of business intelligence? ›

There are three main components of the business intelligence infrastructure. They are the reporting schema, the set of extractions processes, and the embedded analytics, all of which come OOTB with the application.

What is the main technique of business intelligence? ›

Online Analytical Processing (OLAP) is an important business intelligence technique, that is used to solve analytical problems with different dimensions. A major benefit of using OLAP is that its multi-dimensional nature provides leniency for users to look at data issues from different views.

What is business intelligence main goal? ›

Business intelligence refers to an infrastructure that collects and analyzes large amounts of data to give organizations a clear and comprehensive picture of their data. The goal of a BI system is to give stakeholders a clear and customized view of their data to empower them to make data-driven decisions.

What is business intelligence and why is it important? ›

Business intelligence refers to the tools, techniques, strategies, applications and practices businesses employ to collect, integrate, analyze and visualize information. These tools help you make better decisions and drive competitive advantages by leveraging robust predictive analytics capabilities.

What is business intelligence and why is it important in decision-making? ›

Business Intelligence helps companies make informed decisions on strategic issues by providing crucial information on current and historical performance of the company along with future trends, expected demands, customer behavior etc.

How do businesses use business intelligence? ›

It is used to measure performance progress towards business goals, perform quantitative analysis, report/share data, identify customer insights and much more. Business Intelligence enables businesses to organize, analyze and contextualize business data from all around the company.

How does business intelligence improve business performance? ›

The growth of a business depends on the ability to analyze efficiency, identify issues, and make smart decisions moving forward. Business intelligence can help companies manage their data, understand market trends, improve products or services, and identify areas that need attention.

What are the key elements of the business intelligence system? ›

Elements of Business Intelligence
  • Data Warehousing.
  • Embedded Analytics.
  • Ad-hoc Reporting.
  • Interactive Dashboards and Reports.

What are the four 4 intelligence cycle? ›

The stages of the intelligence cycle include the issuance of requirements by decision makers, collection, processing, analysis, and publication (i.e., dissemination) of intelligence.

What are the 7 steps in the intelligence process cycle? ›

Lowenthal (2006, p 55) added two phases for seven phases of the intelligence process as (1) requirements, (2) collection, (3) processing and exploitation, (4) analysis and production, (5) dissemination, (6) consumption, and (7) feedback.

Which tool is used for business intelligence? ›

Microsoft Power BI is one of the widely-used open-source BI tools that provide an environment for the analysis, integration, and visualization of data. This tool is efficient and effective in assisting organizations to make informed business decisions.

Which tool is best for business intelligence? ›

The Best Business Intelligence Tools
  1. Power BI. Microsoft Power BI is business intelligence software to show performance metrics for further exploration and analysis. ...
  2. Oracle Analytics Cloud. ...
  3. MicroStrategy. ...
  4. TIBCO Spotfire. ...
  5. Qlik Sense.

How many stages are there in business intelligence? ›

Business Intelligence consists of the following four stages: Data Collection, Data Storage, Data Analysis and Providing Data Access.

What is the cycle of a business intelligence analysis? ›

These four stages are the “business intelligence cycle.” It starts with defining objectives, proceeds to gathering and organizing information, analyzing it, and setting parameters for measuring and monitoring business performance going forward. Let's look at these four phases of the business intelligence cycle.

What are the six elements of the business intelligence environment? ›

The six elements are data sources, data models, processing applications, computing power, analytic models, and sharing or storing of results.

What are the two primary components of business intelligence? ›

The five primary components of BI include:
  • OLAP (Online Analytical Processing) This component of BI allows executives to sort and select aggregates of data for strategic monitoring. ...
  • Advanced Analytics or Corporate Performance Management (CPM) ...
  • Real-time BI. ...
  • Data Warehousing. ...
  • Data Sources.
9 Sept 2022

What are business intelligence tools for data analysis? ›

Other popular BI tools include: Zoho Analytics, Oracle BI, SAS Visual Analytics, Domo, Datapine, Yellowfin BI, Looker, SAP Business Objects, Clear Analytics, Board, MicroStrategy, IBM Cognos Analytics, Tibco Spotfire, BIRT, Intercom, Google Data Studio, and HubSpot.

What are the six benefits of using business intelligence in an Organisation? ›

Let's examine 6 key benefits of business intelligence:
  • Enhance Business Productivity. In the race to reach and stay at the top, organizational productivity is often overlooked in business. ...
  • Improve Access to Crucial Information. ...
  • Boost ROI. ...
  • Fuel Strategic Decision-Making. ...
  • Eliminate Waste. ...
  • Identify Opportunities.

What is your insights about the 5 reasons why your business should implement business intelligence? ›

5 Reasons Why Business Intelligence Is Useful For Your...
  • Derive useful information from data. You may have all the data in the world, but it does not mean anything until you understand it. ...
  • Make smarter decisions. ...
  • Consolidated perspective - Get the big picture. ...
  • Streamline and Consolidate. ...
  • Focus on your customer.
15 Nov 2019

How does business intelligence help in problem solving? ›

Business Intelligence (BI) platforms can provide solutions for many business development, marketing, and operational issues. BI helps any organization gather, analyze, and leverage a wide variety of data in order to gain a competitive edge and increase its visibility in a crowded market.

How does business intelligence collect data? ›

Tips for Gathering Business Intelligence
  1. Get Internal Data First. Gathering data from every source is absolutely essential. ...
  2. Leverage Big Data. The World Wide Web is overflowing with data. ...
  3. Record Data with a BI platform. ...
  4. Consult With Experienced Product Managers. ...
  5. Perform Analysis With a Team. ...
  6. Create a Strategic Marketing Plan.

How does business intelligence impact business? ›

Business intelligence is the strategies and technologies used by companies to analyze data and business information. In more simple terms, it allows businesses to learn about any process or trend affecting performance, why things are happening, and what is likely to occur in the future.

How does business intelligence analyze data? ›

Here are seven steps organizations should follow to analyze their data:
  1. Define goals. Defining clear goals will help businesses determine the type of data to collect and analyze.
  2. Integrate tools for data analysis. ...
  3. Collect the data. ...
  4. Clean the data. ...
  5. Analyze the data. ...
  6. Draw conclusions. ...
  7. Visualize the data.
24 Aug 2021

What are the 4 types of business analytics? ›

Descriptive, predictive and prescriptive: three types of business analytics
  • Descriptive, predictive and prescriptive analytics. ...
  • Descriptive analytics. ...
  • Predictive analytics. ...
  • Prescriptive analytics. ...
  • A data-led future.

What is the difference between data analytics and business intelligence? ›

Business intelligence (BI) describes past occurrences using historical data. By extension, the exploration of historical data can be a crucial tool for making future business decisions. Conversely, data analytics uses elements of data science to predict future scenarios.

What is the main purpose of business intelligence system? ›

Overall, the role of business intelligence is to improve an organization's business operations through the use of relevant data. Companies that effectively employ BI tools and techniques can translate their collected data into valuable insights about their business processes and strategies.

What is the main benefit of business intelligence? ›

Business intelligence, or BI, processes help you organize your data so it can be easily accessed and analyzed. Decision-makers can then dig in and get the information they need quickly, empowering them to make informed decisions. But improved decision-making is just one benefit of business intelligence.

What are the main functions of business intelligence? ›

Business intelligence systems normally operate to collect data in the areas of customer support, market research, competitive intelligence, product performance, and other areas that benefit from statistical analysis.

What is business intelligence and how can it impact a business? ›

The term Business Intelligence (BI) refers to the technologies, applications, strategies, and practices used to collect, analyze, integrate, and present pertinent business information. The entire purpose of Business Intelligence is to support and facilitate better business decisions.

How can business intelligence help a company achieve success? ›

Business intelligence helps in:
  1. Accelerating decision-making process.
  2. Optimizing internal business processes.
  3. Increasing the operational efficiency.
  4. Driving revenues.
  5. Gaining competitive advantages.
  6. Identifying the market trends.
  7. Spotting addressable business problems.

What are the 3 major phases of data analytics? ›

These steps and many others fall into three stages of the data analysis process: evaluate, clean, and summarize.

What are the 7 analytical methods? ›

The 7 Most Useful Data Analysis Methods and Techniques
  • Regression analysis.
  • Monte Carlo simulation.
  • Factor analysis.
  • Cohort analysis.
  • Cluster analysis.
  • Time series analysis.
  • Sentiment analysis.
13 Oct 2022

What are the three main components of business analytics? ›

The two main components of business analytics can be broken down further into four types of business analytics: descriptive, decision, predictive, and prescriptive. The most effective solutions typically rely on a combination of the four to provide a comprehensive analysis of data.

Is business intelligence a part of data analytics? ›

Business intelligence (BI) and its subsets—business analytics and data analytics—are all data management solutions used to understand historical and contemporary data and create insights.

Can business intelligence become data analyst? ›

Making a transition. BI professionals have a great advantage over anyone else trying to shift into the data science domain. This is because they work with data scientists on various projects and already have the knowledge on how to handle data. In other words, they work in the first half of data science projects.

Is business intelligence the same as data visualization? ›

To recap, Data Visualization is a process that represents information visually so it can be learned quickly and easily. Business Intelligence is a process that focuses on gathering, organizing, recognizing patterns in, and deriving meaning from, the information a business gathers.


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