Business intelligence (BI) is a broad category of applications and technologies for gathering, storing, analyzing, and providing access to data to help enterprise users make better business decisions. BI refers to computer-based techniques used in spotting, digging-out, and analyzing business data, such as sales revenue by products and/or departments, or by associated costs and incomes. BI technologies give historical, current, and predictive views of business operations.
History or background
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 which began in the 1960s and developed throughout the mid-80s. 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." It was not until the late 1990s that this usage was widespread.
Main usage and functionalities of BI
BI has provided a roadmap to deliver solutions for business analysis which includes data models, metadata and analytical applications. By having this roadmap, superior business value through improved return on investment (ROI), time value by enabling fast solution delivery, and technical value through open database enablement can be delivered. Time savings, single version of truth, better strategies, better tactics and decisions are among the other top BI values. In a nutshell, the usage of BI has become increasingly important for organisations because of the following reasons:
Improve the competitive response and decision-making process:
The competitive advantage in business depends on two factors: access to adequate and reliable information in a short period of time and high selectivity in the creation and utilisation of quality information. According to Porter (2001), competitive advantage would be long lasting only if a firm can do the things its competitors do, but do them better, or think differently from its competitors. To realise a long lasting competitive advantage, an organisation needs to have rapid and continuous innovation and dynamic coupling of processes so that they cannot be easily duplicated. Moreover, firms also need to leverage on resources such as structural capital, human capital and relationship capital to achieve sustainable competitive advantage (Farhoomand, 2005). With BI systems connected to customer relationship management, enterprise resource planning, Human resource and finance systems, information can be produced in a more accurate and timely manner. BI systems thus make up a complex solution that allows decision makers to create, aggregate and share knowledge in an organisation easily, along with greatly improved service quality for efficient decision making
Easing corporate governance and regulatory compliance: The new rules in today’s business mandate that organisations be able to show that their data are accurate. This means an organisation must be able to verify the lineage of data, starting at its source and tracking it through its various manipulations and aggregations, which in turn means having reliable metadata and data auditing that are consistent across the enterprise. In this respect, BI assists in ensuring accuracy of data across the enterprise. It allows reporting and query results to be consistent when they are produced. This is...