Introduction to Business Intelligence: Terms, Uses & Methods
March 17, 2023 - Aptaworks
Business intelligence, abbreviated as BI, is an umbrella term for strategies and technologies used to collect, organize, and analyze an organization’s data in order to extract valuable business insights. Popular jargons such as data analytics, mining, dashboard, and queries are all part of what a business intelligence analyst – someone tasked with all the above – deals with in their day-to-day work.
Business Intelligence Terms
Data silo is a collection of data that is only accessible to one department within an organization. For example, your finance, sales, and HR departments could all have their own data silos as they usually need different information to work on tasks.
Unfortunately, business intelligence views siloed data as a potential risk that might hinder data consistency and collaboration. Using BI techniques or tools, data silos are to be integrated and centralized so that anyone within the organization can always access the shared information.
Schema is the structure and design that defines the organization of a database, the relationship between data sets within it, or within a data set itself. Having multiple schemas within your database can be beneficial to improve the security of data sets containing sensitive information.
Data warehouse is a type of database that contains data extracted from different sources to support data analysis. In a data warehouse, analysis is performed using a duplicate of data collected from its original source so as to not interfere with processes happening in the original data source.
Business intelligence dashboard enables its user to visualize and analyze data in real-time. There are various filters and functions available there to pull specific data sets and combine reports – allowing a business intelligence analyst to make sense of the data and gain valuable business insights.
Relational Database Management System (RDBMS)
RDBMS is software used to manage and query relational databases such as data warehouses. This software typically uses SQL programming language to access databases. Popular RDBMS are Oracle Database, MySQL, and SQL Server.
Business Intelligence Uses
From daily transactions to customer feedback, businesses have access to so much data that can be further analyzed and turned into lucrative insights by employing BI methods. Here are how you can use business intelligence to improve decision-making across departments:
Sales forecasting, analyzing consumer buying behavior, sales performance tracking, identifying new sales opportunities.
Analyzing financial reports, budgeting and forecasting, detecting fraudulent acts, investment analysis.
Understanding target audience, identifying market trends, campaign performance tracking, competitor analysis.
Shortlisting candidate pool, performance tracking, improving employee satisfaction and retention.
Business Intelligence Methods
Data mining is the process of analyzing a large amount of data to discover patterns and correlations used in decision-making or predicting a business outcome. Classification, clustering, and associations are a few commonly used data mining methods.
It is always a good practice for businesses to take the time to observe what other companies within their industry are doing and analyze their strategies. In BI, benchmarking is an important process in which a company’s business processes and performance metrics are measured against industry best practices. Time, cost, and quality are usually the focus of this process.
Data querying is the process of pulling answers from data sets by asking specific questions. What sets data querying and data mining apart is the type of questions they answer: while data querying answers questions like “Which ice cream variant had the highest sales last month?”, data mining answers questions such as “Which factors affected ice cream sales during the holiday season?”
Data visualization refers to the graphical representation of data so that they can be easily consumed. Common graphics used in data visualization are charts, tables, graphs, and maps.
In BI, reporting is done by gathering and analyzing data using BI tools in order to extract actionable business insights. Defining stakeholders, choosing the right metrics, and employing the right tools to extract insights are key to creating an effective business intelligence report.