Business Intelligence:
Business intelligence (BI) is a set of theories, methodologies, processes, architectures, and technologies that transform raw data into meaningful and useful information for business purposes. BI can handle large amounts of information to help identify and develop new opportunities. Making use of new opportunities and implementing an effective strategy can provide a competitive market advantage and long-term stability.
BI technologies provide historical, current and predictive views of business operations. Common functions of business intelligence technologies are reporting, online analytical processing, analytics, data mining, process mining, complex event processing, business performance management, benchmarking, text mining, predictive analytics and prescriptive analytics.
Though the term business intelligence is sometimes a synonym for competitive intelligence (because they both support decision making), BI uses technologies, processes, and applications to analyze mostly internal, structured data and business processes while competitive intelligence gathers, analyzes and disseminates information with a topical focus on company competitors. If understood broadly, business intelligence can include the subset of competitive intelligence.
History:
In a 1958 article, IBM researcher Hans Peter Luhn used the term business intelligence. He defined intelligence as: "the ability to apprehend the interrelationships of presented facts in such a way as to guide action towards a desired goal.
Business intelligence as it is understood today is said to have evolved from the decision support systems that began in the 1960s and developed throughout the mid-1980s. DSS originated in the computer-aided models created to assist with decision making and planning. From DSS, data warehouses, Executive Information Systems, OLAP and business intelligence came into focus beginning in the late 80s.
In 1989, Howard Dresner (later a Gartner Group analyst) proposed "business intelligence" as an umbrella term to describe "concepts and methods to improve business decision making by using fact-based support systems.
Business Intelligence and Data Warehousing:
Often BI applications use data gathered from a Data Warehouse or a Data Mart.A data warehouse is a copy of transactional data so that it facilitates in decision support. However, not all data warehouses are used for business intelligence, nor do all business intelligence applications require a data warehouse.
Business Intelligence and Business Analytics:
Business intelligence should be divided into querying, reporting, OLAP, an "alerts" tool, and business analytics. In this definition, business analytics is the subset of BI based on statistics, prediction, and optimization.
Applications in an Enterprise:
Business intelligence can be applied to the following business purposes, in order to drive business value.
Measurement – program that creates a hierarchy of performance metrics.
Analytics – program that builds quantitative processes for a business to arrive at optimal decisions and to perform business knowledge discovery. Frequently involves: data mining, process mining, statistical analysis, predictive analytics, predictive modeling, business process modeling, complex event processing and prescriptive analytics.
Reporting/Enterprise reporting – program that builds infrastructure for strategic reporting to serve the strategic management of a business, not operational reporting. Frequently involves data visualization, executive information system and OLAP.
Collaboration/Collaboration platform – program that gets different areas (both inside and outside the business) to work together through data sharing and electronic data interchange.
Knowledge management – program to make the company data driven through strategies and practices to identify, create, represent, distribute, and enable adoption of insights and experiences that are true business knowledge. Knowledge management leads to learning management and regulatory compliance.
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