What is Business Intelligence? An IT Leader’s Complete Guide

Business intelligence is one of those domains that have a slightly different definition depending on who you talk to. End users might think about the reports and interfaces they see and work with. Creators will probably think of the processing steps that transform complex business data into information. And management often considers it as a method for improving efficiency, productivity, and decision-making.

All three viewpoints are correct from the perspective of each stakeholder. However, they don’t quite get to the core of business intelligence.

The core of business intelligence is typically something that’s in the realm of IT leadership. That’s why we’ve created this guide. In the following sections, I’ll go over what business intelligence is, why it matters, and the life cycle, including various activities and tools. I’ll then talk about the differences between traditional and modern business intelligence, and who uses business intelligence tools, specifically self-service business intelligence. Finally, there’s business intelligence strategy, as related to your position as an IT leader. This includes how it relates to digital transformation within an organization, selecting and implementing the right tools, how to make the most out of your processes in an ongoing setup, and the future of business intelligence. By the end of it, you’ll hopefully be the resident expert on business intelligence in your company.

Business intelligence: do more with less effort with Plutora

Business Intelligence Defined

Simply put, business intelligence is all about turning business data into meaningful insights. This involves the infrastructure, processes, and output that collect, store, analyze, and display data produced by business activities. Therefore, business intelligence refers to both the software tools that allow users to easily understand and interpret business data, and the methods for storing the data and processing it into information.

The purpose of all of this is to facilitate data-driven decision-making. Data-driven decisions reduce the guesswork involved in business practices, helping to ensure that your business hits the target more often than not. For example, business intelligence can help you monitor sales performance, compare yourself with competitors, analyze customer behavior, identify trends, optimize logistics and operations, uncover issues, and predict the success of alternate strategies.

The Business Intelligence Life Cycle

If you’re familiar with data life cycle management, the business intelligence life cycle fits neatly into steps two, three, and four: data storage, data use, and data sharing. It makes use of online analytical processing, or OLAP, which is a method for arranging and processing data into data warehouse “cubes” for analysis. Thus, the various data stores across the business are taken, processed, and arranged, so they can be used and the insights can be shared across the business.

Common Business Intelligence Activities

  • Collecting and preparing data can include tasks such as combining various data sources, selecting dimensions of interest, and defining measurements.
  • Querying the data can be performed through database technologies (e.g., directly via SQL) in applications that expose the data to users.
  • Data mining is easiest to think of as a step up from simple queries, in which statistics and machine learning techniques are applied to larger datasets to uncover trends.
  • Historical or descriptive analysis involves interpreting collected data to understand changes that have already occurred.
  • Statistical analysis looks further into historical or descriptive analysis to uncover the how and the why.
  • Reporting is the practice of summarizing the results of the analysis so they can be quickly understood by stakeholders, allowing them to make decisions.
  • Data visualization and visual analysis are two sides of the same coin. The former turns results of the analysis into graphs and charts so they can be more easily understood, while the latter uses the graphs interactively to tell stories and allow users to draw further conclusions.

Modern Business Intelligence is Not the Business Intelligence of Old

Traditionally, business intelligence used a top-down approach with static reporting. Someone in the organization requested either a standalone or recurring report, and a member from the IT department produced it. To do so, they ran a few database queries and, if well organized, copied the results into a template. As you might imagine, this model was slow and full of potential problems. If the request wasn’t written clearly enough or the member of IT misunderstood anything, a new report had to be generated. If someone wanted to ask a follow-up question, a new report had to be generated. And if the data changed? A new customer emerged? Processes changed? You guessed it.

Modern business intelligence, on the other hand, flips the model. Instead of generating static reports, tools and processes are implemented so the end users are able to directly interact with the data and build their own interactive reports. This moves the IT department from the position of conduit-taking requests, writing queries, and delivering results-into the position of facilitator-implementing software tools and processes to expose the data in easily understood formats. With the correct software tools, such as Plutora’s business intelligence platform, users draw insights about their questions in real time.

Types of Users

  1. Business users come from all across the organization. Depending on their role, they will interact with and/or build dashboards and visualizations in software systems. You can think of business users much the same as you do for other software systems. A few will be more like “power users” who require more permissions and features, while most will simply need access to a few specific components (or, in this case, interactive reports).
  2. Data analysts and data scientists are where the picture diverges from most software systems. These users have strong statistical backgrounds and work toward generating complex and strategic insights. As a result, they will both interact with the software systems and require some input into the data processing and flow.
  3. IT users mainly play a role in building, implementing, and maintaining the business intelligence software, processes, and infrastructure. Occasionally, IT users will also utilize business intelligence software-much the same as business users do-to gather insights about IT processes.
  4. Organization leadership is the final segment of common business intelligence users. These users, generally speaking, aren’t involved in making reports or processing data. However, they have their own set of executive dashboards, which make key business metrics easy and incredibly fast to digest.

Self-Service Business Intelligence

While these tools are designed to be easy to use, there are certain pitfalls you’ll need to be aware of. First and foremost, users still require some training and instructional documentation. This is the single most effective step in preventing other problems. Training and instructions make it much more likely that users don’t misuse the data and end up with conflicting, chaotic, and misleading information that varies between users and departments. Similarly, it’s best to have a centralized approach to software licensing. This may seem like it comes with more work, but it helps to maintain proper access management and prevent high licensing fees. In addition, you’ll need to be aware of potential data security and privacy concerns with so many users having access to business data.

Common Business Intelligence Software Features

  • Visual analytics and visualization features allow users to select different graphs or visual representations with which to present the data.
  • Dashboards are a specific type of visual analytics display. They contain a set of predefined graphs and metrics. Users have limited interactivity, such as showing and hiding metrics, or changing the focus so different metrics are highlighted.
  • Drill-down features are designed to introduce details in manageable chunks. They show an overview of the data and allow users to interactively look into certain aspects in more detail.
  • Reporting features bring traditional business intelligence into modern practice. They allow users to easily generate static and periodic reports with the insights they’ve gathered.
  • Data mining, meanwhile, is more likely to be used by data analysts and scientists. It’s all about discovering patterns and trends in large data sets.
  • Extract-transfer-load (ETL) features are primarily in the domain of IT users. The features take the hassle out of importing data from one data store into another.

Business Intelligence Strategy

When considering business intelligence strategy, it’s best to take a careful and structured approach. Business intelligence tools take time to set up because of the data and processing they consume. Similarly, they’re used across the business, so they’re slow and difficult to swap out. Selecting the most popular tool and throwing data into it just won’t cut it. A bad worker may blame their tools, but even a good worker will struggle to cut down a tree with a spoon.

Selecting the Right Tools for Your Organization

  1. Define requirements. Answer the key questions that matter to your business: Why are you implementing business intelligence? What data do you have available? How tech-savvy are your users? What are you using the data for? What else could you use it for? Then, build a list of software requirements to answer these questions.
  2. Divide requirements by importance. Once you have your list of requirements, split it into must-haves and nice-to-haves. If that’s not enough, add in more importance categories.
  3. Research available tools and create a shortlist. Compare the tools to your requirements list and see which ones meet the most important requirements. In addition, look into licensing details and available pricing information.
  4. Get a demonstration of your short-listed tools. Go into the demonstration with a list of questions and things you’d like to see. Rate and compare the tools in your shortlist.
  5. Test, test, test. The vendors are there to sell. They’re going to show off the best parts of their software and be clever in the way they answer your questions. Test any software in a proof of concept to see if it does meet your needs.
  6. Negotiate a deal. Most of the modern tools follow a per-user or per-license model. Negotiate pricing or benefits to ensure that your decision makes financial business sense.

If nothing meets enough of your requirements, or the deals aren’t right, go back to step two and see if there are alternative ways of splitting requirements. You may find that you need to look at a few different types of tools.

Implementing Business Intelligence Tools

Even though business intelligence tools are designed to be user-friendly, that doesn’t mean they will be instantly accepted. With the introduction of any system, you’re asking users to change their well-worn and comfortable workflows. Success hinges on these users changing their ways. Again, we fall back to training and documentation. It might sound boring, but well-designed training will demonstrate the benefits of business intelligence tools, and documentation will allow users to check things when they’re testing the tools out.

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The Future of Business Intelligence

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Learn how to improve the speed, quality, and visibility of your software delivery. https://www.plutora.com/