Business Intelligence, or
BI, refers to applications and technology used to gather, provide access and analyse data and information about your company’s operations. BI is neither a product nor a system – it is an architecture which provides the business community with easy access to business data.
The benefits include identifying who the best and worst customers are, which products make the most or least profits, fine-tuning of marketing or pricing policies, the retention of customers and predicting market trends.
Business-intelligence tools can provide significant value, but measuring their return on investment still presents a challenge as it can take time to see the real world benefits. Some business intelligence packages have a reputation for being complex and difficult to use, so training could be a critical factor in getting people up to speed with these tools.
BI software can bring together data from disparate parts of the company. Once that happens, companies can do analysis, run reports, and make predictions based on past performance. Some BI software lets companies weave in external information, such as the price of gas or the unemployment rate in certain regions, to better understand how market swings or economic trends are affecting customer behavior and the company. This software tops the list of technology spending priorities for companies in 2009, according to a Gartner survey of more than 1,500 CIOs worldwide released in January. That priority remains, even though IT budgets are expected to be essentially flat in 2009. Expectations for increasing demand helped fuel a wave of consolidation in the BI market. Software vendors including SAP, IBM, Oracle, and Microsoft all made big BI acquisitions in recent years.
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Companies that have established business intelligence tools throughout the organization in a consistent manner stand to benefit from the ability to get high-quality information and respond more quickly. Business intelligence software can also help companies mine customer data that they already track to potentially sell new products or services.
"Large companies are like large ships that are difficult to turn," says John Colbert, vice-president for research and analysis at BPM Partners, a management consulting firm. Lots of companies use business intelligence to understand what has happened in the past, but it's really important, he says, to do strategic modeling to understand how to move forward, whether it means solidifying relationships with your most profitable clients or figuring out which employees are the least productive and how to best manage your resources.
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