What is BI?

Business intelligence (BI) has two basic different meanings related to the use of the term intelligence. The primary, less frequently, is the human intelligence capacity applied in business affairs/activities. Intelligence of Business is a new field of the investigation of the application of human cognitive faculties and artificial intelligence technologies to the management and decision support in different business problems.

The second relates to the intelligence as information valued for its currency and relevance. It is expert information, knowledge and technologies efficient in the management of organizational and individual business. Therefore, in this sense, business intelligence is a broad category of applications and technologies for gathering, providing access to, and analyzing data for the purpose of helping enterprise users make better business decisions. The term implies having a comprehensive knowledge of all of the factors that affect the business. It is imperative that firms have an in depth knowledge about factors such as the customers, competitors, business partners, economic environment, and internal operations to make effective and good quality business decisions. Business intelligence enables firms to make these kinds of decisions.

COMPONENTS OF BI

OLAP (On-line analytical processing)

 It refers to the way in which business users can slice and dice their way through data using sophisticated tools that allow for the navigation of dimensions such as time or hierarchies. Online AnalyticalProcessing or OLAP provides multidimensional, summarized views of business data and is used for reporting, analysis, modeling and planning for optimizing the business. OLAP techniques and tools can be used to work with data warehouses or data marts designed for sophisticated enterprise intelligence systems. These systems process queries required to discover trends and analyze critical factors. Reporting software generates aggregated views of data to keep the management informed about the state of their business. Other BI tools are used to store and analyze data, such as data mining and data warehouses; decision support systems and forecasting; document warehouses and document management; knowledge management; mapping, information visualization, and dash boarding; management information systems, geographic information systems; Trend Analysis; Software as a Service (SaaS).

Advanced Analytics

Iit is referred to as data mining, forecasting or predictive analytics, this takes advantage of statistical analysis techniques to predict or provide certainty measures on facts.

Corporate Performance Management (Portals, Scorecards, Dashboards)

This general category usually provides a container for several pieces to plug

 into so that the aggregate tells a story. For example, a balanced scorecard that displays portlets for financial metrics combined with say organizational learning and growth metrics.

Real time BI

 It allows for the real time distribution of metrics through email, messaging systems and/or interactive displays.

Data Warehouse and data marts

The data warehouse is the significant component of business intelligence. It is subject oriented, integrated. The data warehouse supports the physical propagation of data by handling the numerous enterprise records for integration, cleansing, aggregation and query tasks. It can also contain the operational data which can be defined as an updateable set of integrated data used for enterprise wide tactical decision-making of a particular subject area. It contains live data, not snapshots, and retains minimal history. Data sources can be operational databases, historical data, external data for example, from market research companies or from the Internet), or information from the already existing data warehouse environment. The data sources can be relational databases or any other data structure that supports the line of business applications.

A data mart is a collection of subject areas organized for decision support based on the needs of a given department. Finance has their data mart, marketing has theirs, and sales have theirs and so on. And the data mart for marketing only faintly resembles anyone else's data mart. Perhaps most importantly, the individual departments own the hardware, software, data and programs that constitute the data mart. Each department has its own interpretation of what a data mart should look like and each department's data mart is peculiar to and specific to its own needs. Similar to data warehouses, data marts contain operational data that helps business experts to strategize based on analyses of past trends and experiences. The key difference is that the creation of a data mart is predicated on a specific, predefined need for a certain grouping and configuration of select data. There can be multiple data marts inside an enterprise. A data mart can support a particular business function, business process or business unit.

Data Sources

Data sources can be operational databases, historical data, external data for example, from  market research companies or from the Internet), or information from the already existing data warehouse environment. The data sources can be relational databases or any other data structure that supports the line of business applications. They also can reside on many different platforms and can contain structured information, such as tables or spreadsheets, or unstructured  nformation, such as plaintext files or pictures and other multimedia information.

REASONS FOR BUSINESS INTELLIGENCE

Business Intelligence enables organizations to make well informed business decisions and thus can be the source of competitive advantages. This is especially true when firms are able to extrapolate information from indicators in the external environment and make accurate forecasts about future trends or economic conditions. Once business  ntelligence is gathered effectively and used proactively then the firms can make decisions that benefit the firms. The ultimate objective of business intelligence is to improve the timeliness and quality of information. Timely and good quality information is like having a crystal ball that can give an indication of what's the best course to take. 

Business intelligence reveals

• The position of the firm as in comparison to its competitors
• Changes in customer behavior and spending patterns
• The capabilities of the firm
• Market conditions, future trends, demographic and economic information
• The social, regulatory, and political environment
• What the other firms in the market are doing.

BENEFITS OF BI

• With BI superior tools, now employees can also easily convert their business knowledge via the analytical intelligence to solve many business issues, like increase response rates from direct mail, telephone, e-mail, and Internet delivered marketing campaigns.

• With BI, firms can identify their most profitable customers and the underlying reasons for those customers’ loyalty, as well as identify future customers with comparable if not greater potential.
• Analyze click-stream data to improve ecommerce trategies.
• Quickly detect warranty-reported problems to minimize the impact of product design deficiencies.
• Discover money-laundering criminal activities.
• Analyze potential growth customer profitability and reduce risk exposure through more accurate financial credit scoring of their customers.
• Determine what combinations of products and service lines customers are likely to purchase and when.
• Analyze clinical trials for experimental drugs.
• Set more profitable rates for insurance premiums.
• Reduce equipment downtime by applying predictive maintenance.
• Determine with attrition and churn analysis why customers leave for competitors and/or become the customers.
• Detect and deter fraudulent behavior, such as from usage spikes when credit or phone cards are stolen.
• Identify promising nnew molecular drug compounds.