The financial services industry is rapidly changing. Factors such as globalization, deregulation, mergers and acquisitions, competition from nonfinancial institutions, and technological innovation, have forced companies to re-think their business. Many large companies have been using business intelligence (BI) computer software for some years to help them gain competitive advantage. With the introduction of cheaper and more generalized products to the market place BI is now in the reach of smaller and medium sized companies.
Defining business intelligence
“Business intelligence is the process of gathering high-quality and meaningful information about the subject matter being researched that will help the individual(s) analyzing the information, draws conclusions or make assumptions.” An ideal BI system gives an organization's employees, partners, and supplier's easy access to the information they need to effectively do their jobs, and the ability to analyze and easily share this information with others. 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. The aim of Business intelligence is to support better business decision-making. Thus a BI system can be called a decision support system (DSS).
Business intelligence and business analytics
Thomas Davenport has argued that 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. Business intelligence and data ware housing
Often BI applications use data gathered from a data warehouse or a data mart. However, not all data warehouses are used for business intelligence, nor do all business intelligence applications require a data warehouse. In order to distinguish between concepts of business intelligence and data warehouses, Forrester Research often defines business intelligence in one of two ways: Using a broad definition: "Business Intelligence is a set of methodologies, processes, architectures, and technologies that transform raw data into meaningful and useful information used to enable more effective strategic, tactical, and operational insights and decision-making." When using this definition, business intelligence also includes technologies such as data integration, data quality, data warehousing, master data management, text and content analytics, and many others that the market sometimes lumps into the Information Management segment. Forrester defines the latter, narrower business intelligence market as "referring to just the top layers of the BI architectural stack such as reporting, analytics and dashboards.
Strategic or Tactical
Business intelligence applications can be deployed either strategically i.e. across functional department or tactically i.e. within a functional department. Strategic
Strategic BI has the potential of big rewards. It can give senior managers a holistic view of the company and can identify trends and opportunities for growth. It can also be used for monitoring the company against its Key Performance Indicators (KPI’s). Because it goes across departmental boundaries it encourages collaborative working in the organization. Tactical
Can be applied to the ‘pain’ areas of your business where the extra knowledge and insight that BI can bring will bring quick and quantifiable results. It is usually a good place to start if you have had no previous experience in BI. An example of tactical BI deployment might be to look at production yield from a manufacturing process, we might want to record inputs, output, wastage, plant...