Business Intelligence (BI) refers to all modern technologies that provide useful information for business purposes. The word “Intelligence” in the phrase “Business Intelligence” means the ability to access insights easily.
The definition of Business Intelligence
BI integrates platforms and software solutions that enable users to view information relevant to their work in a timely, up-to-date manner. Moreover, advanced BI solutions can handle predictions, trend analysis, and data mining, tailored to the needs of each specific situation.
In addition, data integration is also an important part of BI because many of the software systems (such as ERP, invoicing, payroll, inventory tracking, SCADA systems, etc.) can be integrated with BI solutions.
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Data from integrated systems will be collected by BI in a storage centre, often called a data warehouse, and will play a key role in all future business plans. Another smart feature of BI is that it pre-calculates important data, sometimes drawn from different data sources in the enterprise. From there, executives can rely on this timely, accurate amount of data to make important decisions for their organisations.
When should an organisation need BI?
Obviously, BI offers a highly competitive advantage. However, these solutions require investment budgets, from the cost of purchasing and developing system software to user training. Therefore, the size of a company can influence the application of BI.
So, when should you consider BI solutions? Because BI primarily addresses issues with the visibility and validity of data, it enables administrators to work faster and more efficiently. Therefore, when the total cost of working with erroneous, not-updated data is too expensive, and the results are not positive, it is time to consider BI.
The benefit of Business Intelligence
In terms of data
As businesses grow to a certain level, autonomy begins to emerge. That means the CEO no longer holds all decision-making power; it is now assigned to lower levels of management. However, the CEO still has to make the decisions that have a big impact.
At this point, the data should be sent from all departments. Without a unified management system, the correct, standard data presentation and delivery will become a significant problem. In addition, there may be a personal misrepresentation, resulting in loss of valuable data and severe damage to the organisation.
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BI solutions provide a framework that automatically transfers information from the original department to stakeholders at all levels. Hence, managers can be reassured that their decisions are based on the original indexes collected without correction and that the aggregated data can even be “backwards retrieved” to view the original data. This is the display function of BI, along with the data analysis automation.
BI ways to collect and process information:
- Automate the delivery of reports, prioritise the important, and focus on organisational data.
- Use real-time data directly received from the source system, reduce risk and increase accuracy.
- Provide centralised information and role-based dashboards, and let decision makers know of important trends. (Namely, the dashboard is a personalised, customizable set of data that is tailored to the role of the user.)
In terms of time
The growth of an organisation not only adds burden on managers’ shoulders but also increases the time gap between the raw and final reports received by the enterprise’s leaders, which might result in negative consequences for the business.
Decision makers may miss promising opportunities due to old data, and the wrong financial information may lead to errors in organisational planning. Furthermore, the “getting feedback – changing – reacting” process depends very much on timely data.
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Using BI with the software platform will ensure that important metrics and information are always up-to-date. Data can be retrieved from business systems daily, weekly, monthly or even more, limited only by the features of each system and the available infrastructure. Consequently, the forecasting model, depending on the organisation’s data, can be ensured to be accurate.
Three main areas of Business Intelligence
In fact, there are many technical frameworks for BI solutions from various vendors and their counsellors are always available to advise on their products. However, there are three main areas of BI that administrators must understand to be more active when receiving consultancy on the suitable packages:
- Data integration and storage
- Data division and analysis
- Dashboards, KPIs and reports
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How BI integrates and stores data
One of the most fundamental goals of BI is to consolidate information from multiple systems into a single location. Specifically, a process will be integrated to read data from other proprietary data acquisition software systems of the organisation, and copy it to the data warehouse.
Different systems store information in a variety of formats, so the data must go through a process of conversion before being copied to the data warehouse. This process is referred to as ETL, and has three steps: Extract, Transform, and Load:
- Extract: Copies raw data from each system into a duplicate table, provides a single snapshot of the data at a specific time and minimises the impact of ETL on the performance of the original system.
- Transform: use a variety of data conversion techniques to organise data and prepare for the data warehouse.
- Load: transfer the converted data to the data warehouse.
How BI divides and analyses data
Data in the data warehouse can be queried and reported, but BI solutions also often do additional work, such as advanced reporting, forecasting and analysis. This is called the “Online Analytical Processing” (OLAP).
BI solutions can divide data into cubes, which are a structure that shows the information stored in the data warehouse and pre-calculates the required amounts, determines calculations and filters to speed up reports and dashboards. And OLAP has many advantages thanks to these data cubes.
Since departments or individuals in the organisation are granted access to certain cubes, the work can be done orderly and efficiently. Not to stop there, identifying these separate cubes of data also allows a balance between security, speed, and reporting flexibility.
Furthermore, OLAP offers the transfer of data into knowledge through data mining. Specifically, this is an automated process for seeking trends and anomalies after restructuring the raw data. Most importantly, this BI’s analytical tool can screen a data cube, and provide valuable insights that are often overlooked.
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Dashboards, KPIs and reports in BI
The actual value of BI will be identified through the dashboards, KPIs, and reports with the following specific benefits:
1. The BI report is similar to traditional paper reports, but it constantly provides important metrics (daily, weekly, or monthly).
2. The dashboard provides rights and flexibility in a variety of ways:
- Collecting and combining online interactions
- Selective privacy based on group membership
- Detailed information and perspectives
- Multiple dataset visualisations (maps, charts, etc.)
4. KPIs are elements designed to represent performance when compared to business objectives. Hence, KPI provides a key direction for the organisation’s goals, defined at the OLAP level, not at the reporting level, to provide users with timely and authoritative information.
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