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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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.

(Video) Business Intelligence: Transforming Data Into Insights

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.

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

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

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.)

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.

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

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.

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.

(Video) Business Intelligence - Turning data into insights.

“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.”

More on BI:

(Video) Panel Discussion: Transforming Data into Business Insights

  • 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 answer? ›

Business intelligence (BI) is a technology-driven process for analyzing data and delivering actionable information that helps executives, managers and workers make informed business decisions.

What is business intelligence insights? ›

Business intelligence (BI) is the presentation of business data through reports and dashboards that reveal key statistics about an organization. BI and analytics work hand-in-hand, because analytics turns data into insights that guide intelligent business decisions.

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 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

What is business intelligence Mcq? ›

Explanation: Business intelligence (BI) is a broad category of application programs and technologies for gathering, storing, analyzing, and providing access to data from various data sources.

What is the main purpose of business intelligence system Mcq? ›

1) The objective of B.I. is A. To support decision-making and complex problem solving.

What is business intelligence 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 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.

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.

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 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.

What is business intelligence Why effective and timely decision is important? ›

Business Intelligence (BI) is about getting the right information, to the right decision makers, at the right time. Dynamic decision making is effectively dealt with through an instinctive approach, and require precisely based on Analytical methodologies and Mathematical models.

Which of the following tools a business intelligence system will have Mcq? ›

Answer: A Explanation: Business intelligence system will have OLAP, Data mining and reporting tolls.

What is the objective of business intelligence quizlet? ›

Business Intelligence is a process of acquiring, analyzing, and publishing data with an objective of discovering or revealing patterns in data.

How many types of business intelligence users are there? ›

5 types of Business Intelligence users in your organization.

What is the business intelligence process and explain two step? ›

The general process of business intelligence is as follows: Gathering data and organizing it through reporting. Turning it into meaningful information through analysis. Making actionable decisions aimed at fulfilling a strategic goal.

How do I convert business data to business insights? ›

Collect: A large, high quality database translates into good business insight for any organization. Data on sales prospects, for example, can be gathered and collected from network engagements, forums, blogs, reviews and website click streams, and ad engagements.

How do I convert data to insights? ›

How to convert data into actionable insights?
  1. Define your goals and objectives.
  2. Invest in the right analytics and attribution tools.
  3. Use context to simplify data.
  4. Use visuals to show your findings.
25 Jan 2022

How do you turn data into insights? ›

A Step by Step Guide: How to Extract Insights from Data
  1. Formulate a question and a clear idea of a result. ...
  2. Gather, clean up, and store data. ...
  3. Conduct strategic data analysis and uncover patterns. ...
  4. Find the right model for predictive analytics and validate. ...
  5. Make decisions and communicate results.

Why is intelligence important for success? ›

IQ and Education Success

Years of research have shown us that a high IQ is associated with many known benefits. These have included creativity, income, health, social mobility and indeed life expectancy. Evidence also suggests that there is a positive relationship between IQ and grades.

How does business intelligence add value to a business? ›

Integrating business intelligence into your operations helps your company by delivering value through the following ways:
  1. Effective decision-making.
  2. Sales & marketing.
  3. Customer experience.
  4. Boosting productivity.
  5. Data accuracy and compliance.
  6. Integration.
  7. Identify your immediate goals.
  8. User-friendliness.
18 Nov 2020

How can business intelligence tools can contribute to effective decision-making? ›

Better sales decisions

Industry specific business intelligence enables companies to discover detailed sales trends based on their customers' preferences, reactions to promotions, online shopping experiences, purchasing habits, and patterns and trends which affect sales.

Which intelligence is more effective in decision-making? ›

Research shows that emotional intelligence (EI) enables us to make effective decisions. Cornell University researchers found that individuals with higher EI picked up better on critical bodily signals and used that information to avoid risky decisions.

What is business intelligence with example? ›

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 PDF? ›

Business intelligence systems combine operational data with analytical tools to present complex and competitive information to planners and decision makers. The objective is to improve the timeliness and quality of inputs to the decision process.

What is business intelligence study? ›

Business intelligence (BI) is a variety of software applications used to analyze an organization's raw data. BI can include data mining, online analytical processing, and business reporting. Most businesses use BI software to help keep track of information and rely on the software to operate effectively.

What types of data are used in business intelligence? ›

These are predictive analytics, descriptive analytics, and prescriptive analytics. Predictive analytics takes historical and real-time data and models future outcomes for planning purposes.

Where is business intelligence used? ›

Where Is BI Used? Sales, marketing, finance and operations departments use business intelligence. Tasks include quantitative analysis, measuring performance against business goals, gleaning customer insights and sharing data to identify new opportunities.

What is the best business intelligence? ›

Top 10 Business Intelligence Tools Leaders by Analyst Rating (of 576 products)
  • Advanced Analytics.
  • Augmented Analytics.
  • Dashboarding and Data Visualization.
  • Data Management.
  • Data Querying.
  • Embedded Analytics.
  • Geospatial Visualizations and Analysis.
  • Internet of Things (IoT) Analytics.

What are some of the benefits of business intelligence? ›

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 business intelligence steps? ›

Business intelligence processes include collecting data, creating models, analyzing the data with queries, creating data visualizations such as charts, and producing reports to be used by business decision-makers. BI processes can be applied to both operational and strategic decisions.

What is business intelligence skills? ›

BI consultant

This is a holistic role that needs a background in mathematics or science with fully utilizing these (tech) skills: Understand, manipulate data and statistics. Fully capable of using analysis tools and software. Expert knowledge of data visualization tools. Project management mastery.


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