What is Business Intelligence? 2023 Guide

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.elementor-widget-text-editor.elementor-drop-cap-view-stacked .elementor-drop-cap{background-color:#69727d;color:#fff}.elementor-widget-text-editor.elementor-drop-cap-view-framed .elementor-drop-cap{color:#69727d;border:3px solid;background-color:transparent}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap{margin-top:8px}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap-letter{width:1em;height:1em}.elementor-widget-text-editor .elementor-drop-cap{float:left;text-align:center;line-height:1;font-size:50px}.elementor-widget-text-editor .elementor-drop-cap-letter{display:inline-block} Ever felt overwhelmed by the sheer volume of data your business generates? In today’s digital age, data is being produced at an unprecedented rate. This massive influx of information can be incredibly challenging to manage, let alone analyze and use effectively. Hi, my name is AJ! After building and selling my business for  multiple seven figures , I started Small Business Bonfire.  Before my company scaled to success, my team and I wasted time, energy,  and  money trying to make the best decisions. It was when I discovered  business intelligence (BI) tools  that operations really took off! Keep reading to learn more!









Key Takeaways







Business intelligence systems use historical, customer, and time data to drive decisions. 




A BI tool can improve customer experiences and boost worker efficiency. 




Business intelligence technology provides data visualization.




BI is critical because it improves decision-making and operational efficiency.








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Business intelligence is a technology-driven process for  analyzing   data  and  providing actionable insights.  Data mining is an essential aspect of business intelligence, as it involves extracting relevant patterns from large data sets , thereby enabling businesses to discover new insights and trends that might otherwise remain hidden. As a result, executives, managers, and employees can make  data-driven decisions  instead of guessing the best direction.  The business intelligence process involves the following steps:  Collecting data from internal IT systems  Collecting raw data from external sources Preparing data for analysis  Running queries against the data  Creating data visualizations  When companies use BI, their primary goal is to  make better business decisions  that do the following things:  Increase revenue  Improve operational efficiency  Gain a competitive edge of the competition How does BI work? I’ll cover that in the following section!















How does Business Intelligence Work?



Business intelligence works somewhat like a super-smart detective.  Business intelligence tools collect clues (which are bits of data) about a company’s operations from different sources (like sales reports, customer feedback, or social media).  Then, with the help of special tools or software, it  organizes these clues to make them easier to understand.  Different methods of organization can include the following visual representations:   Graphs Pie charts Dashboards  The idea is to  make it simpler to spot patterns, trends, or potential issues.  So, just like a detective uses clues to solve a case, a company can use business intelligence to  make informed decisions to improve its business! Using a customer relationship management ( CRM ) tool is a popular way companies use BI. The CRM collects information on customer interactions, such as calls and purchases, to create an integrated view of the customer.





















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Pro Tip #1: Don't get overwhelmed by the volume of data. As a new BI user, getting lost in the sea of data and metrics is easy. Begin by identifying key performance indicators (KPIs).
- AJ Silber









Why is Business Intelligence Important? 



Business intelligence is  crucial for a multitude of reasons.  However, the most prevalent reasons companies should use BI are:  To improve decisions  To improve operational efficiency Let’s look at each of these aspects in closer detail. Enhanced Decision Making One of the primary reasons why business intelligence is essential is that  it enhances decision-making processes.  By offering  actionable insights derived from data analysis , BI tools empower businesses to make informed decisions.  Further, these decisions are based on raw data rather than  assumptions  or  gut feelings. Therefore, business intelligence tools significantly  increase the chances of positive outcomes. BI is a good choice for your business if making sales or marketing-related decisions terrifies you.  With BI, you’ll  feel more confident  about the direction you lead your team down! Operational Efficiency   Business intelligence can dramatically  improve operational efficiency  within a company.  By identifying bottlenecks, inefficiencies, and wasteful practices in a company’s operations,  BI tools allow businesses to streamline their processes.  When companies streamline their operations, it can lead to the following things:  Cost savings Increased productivity A healthier bottom line It’s crucial to know that  you must continually improve business processes , even if you utilize BI recommendations.  Your company’s customer base, market, and product or service continually change, so your business processes should keep up with these shifts!















What is the Main Purpose of Business Intelligence?



The primary purpose of business intelligence is to  use data analysis to make sure each business decision is thought out  and driven by information rather than guesswork.  Business analytics provide companies with an array of information that can help improve aspects like:  Marketing campaigns  Sales strategies  Sales pipeline stages  Customer support techniques  Also, BI utilizes data visualization,  making it easier  for executives, managers, and employees  to grasp business operations fully!















Benefits of Business Intelligence  



Many  advantages come when companies utilize business intelligence  technologies.  Below, I’ve listed the most crucial benefits you must know! Data-Driven Decision Making  Data-driven decision-making enables companies to make choices based on  concrete ,  unbiased data  instead of relying on intuition or observation.  This strategic approach not only  increases the likelihood of achieving desired outcomes  but also does the following things:  Reduces risks Optimizes efficiency  Promotes a deeper understanding of market trends and business performance Faster Business Analysis  Business intelligence tools  enable faster business analysis  by automating the collection, integration, and organization of data from various sources. Without specialized BI software, these  manual processes would be time-consuming. Further, business intelligence tools provide  real-time insights and visual representations of data , allowing businesses to identify trends, patterns, and anomalies quickly. Intuitive Dashboards  Business Intelligence presents data through  intuitive dashboards. These dashboards are  graphical representations  of a company’s key performance indicators (KPIs).  Further, these dashboards are  customizable  and  interactive . Therefore, individuals can monitor, analyze, and visualize various pieces of information at a glance. Increased Organizational Efficiency  Business intelligence software  increases organizational efficiency  by identifying inefficiencies and bottlenecks within operational processes, illustrating areas of improvement.  Also, the automation of data collection and analysis  saves significant amounts of time. Therefore,  BI frees up resources  and allows personnel to focus on other critical areas of the organization. Improved Customer Experience  BI can significantly  enhance the customer experience  by providing insights into the following things: Customer behavior Shopping and communication preferences Customer needs Pain points  Businesses can  personalize their products, services, and communications  through data analysis. As a result, this fosters more substantial customer relationships and  improves overall customer satisfaction. Improved Employee Satisfaction  Another benefit of BI is that it leads to improved employee satisfaction by the following things:  Streamlining workflows Eliminating inefficiencies Reducing the time-consuming tasks of data collection and analysis Because BI handles business analytics,  employees can focus on their core responsibilities  and contribute to a more productive work environment. Trusted Data Sources  Trusted data sources are a significant benefit of BI because they ensure the  reliability  and  accuracy  of the information utilized in decision-making processes.  By drawing from credible data sources,  businesses can have confidence in the insights derived , leading to more secure and informed strategic decisions. Increased Competitive Advantage Business intelligence gives businesses a competitive edge by doing the following things:   Delivering valuable insights derived from data analysis Enabling companies to anticipate market trends Understand customer behavior Optimize operational efficiency Further, by facilitating data-driven decision-making,  BI allows business users to strategically innovate , stay ahead of industry developments, and outmaneuver their competition! Your competitors continually search for ways to improve and provide excellent customer experiences.  Therefore, you and your team must stay ahead of the curve! BI technology is the perfect way to stay ahead. 















Business Intelligence Best Practices



Here are a few best practices associated with BI: Adopt a User-Centric Approach:  Tailor the BI solution to the needs of its users, ensuring it’s intuitive and easy to understand. Ensure Data Quality:  Maintaining the accuracy and reliability of your data sources is crucial.  Promote a Data-Driven Culture:  Encourage employees at all levels to incorporate data into their decision-making processes.  Focus on Security:  Protect your data assets by implementing robust security measures.  Continually Evaluate and Adapt:  BI is not a one-time solution but an ongoing process. Regularly review your objectives, measure the results, and adjust your strategies as necessary. 

















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Pro Tip #2: Combine the power and functionalities of BI and CRM software. CRMs collect valuable historical data that help companies thrive!
- AJ Silber









Business Intelligence Examples 



Here are two real-life examples of companies analyzing data to improve business operations and customer experiences.  Example 1: Amazon – Personalized Recommendations One example of BI in action is Amazon’s personalized recommendation system.  For instance, Amazon uses sophisticated algorithms to analyze customer behavior, including the following details:   Purchase history Items in the cart Items rated and liked  What other customers are buying This data  allows Amazon to provide highly personalized product recommendations in real time , enhancing the customer experience and driving more sales.  With personalized experiences, Amazon customers feel like the company is catering to them (which most shoppers prefer)! Example 2: American Express – Predictive Analysis American Express (AMEX) uses  predictive analytics , a component of business intelligence, to analyze and interpret vast amounts of transaction data.  The intent is to  identify patterns and trends  to help make more informed decisions.  For instance, AMEX can predict customer loyalty by analyzing their spending patterns. As a result, AMEX can provide personalized services and offers to retain their customers. 















Business Intelligence vs. Business Analytics



While both  business intelligence  and  business analytics  are data-driven decision-making processes, their approach and purpose differ.  For example,  BI uses software and services to turn data into actionable insights influencing business decisions.  BI primarily focuses on  what’s happening now  and  what has happened in the past. On the other hand, business analytics systematically explores an organization’s data, emphasizing statistical analysis. Typically,  BA tools are more predictive.  Further, BA aims to answer questions like:  “Why is this happening?” “What if these trends continue?”  “What will happen next?”   “What is the best course of action?” So, while BI helps to make sense of data,  BA uses the data to predict and plan for the future.















History of Business Intelligence



Business intelligence  dates back to the 19th century , but the term was first coined by Richard Millar Devens in 1865. Yet, in the mid-20th century, Hans Peter Luhn, an IBM researcher, introduced BI as an  automatic method to share information between different departments. The technology and methodologies  evolved rapidly  with the advent of computers. In the 1970s, businesses began to use decision-support systems.  The following years saw the emergence of data warehouses, online analytical processing (OLAP), and business intelligence analysts.  In the late 80s and early 90s, modern BI took shape as desktop computers became more prevalent and  businesses started understanding the value of data-driven decision-making.  The 21st century brought advancements like:  Big data analytics Cloud computing Mobile BI Machine learning These tools  revolutionized  how businesses perceive and utilize data.  Today, BI tools can help businesses get actionable insights and strategic advantages in a competitive marketplace.















Types of Business Intelligence Tools



There are several power BI tools, so let’s see which are best for your company!  Ad Hoc Analysis  Ad hoc analysis  writes and runs queries  to analyze certain weak points in a business.  Typically, ad hoc analytics are incorporated into dashboards and reports.  Online Analytical Processing  Online Analytical Processing (OLAP) is a tool that  allows users to analyze data from multiple dimensions , enabling the following things:  Complex calculations Trend analyses Sophisticated data modeling This feature is  used to process high-level, aggregated data views. Mobile BI Mobile business intelligence is a cloud-based system that  allows users to access data and insights from anywhere , anytime, using a mobile device. Real-Time BI Real-time BI is a modern approach that  instantaneously delivers data analysis and reporting. Real-time BI enables business users to decide things based on current data. Operational Intelligence  Operational intelligence is a  real-time dynamic business analytics  category that delivers visibility and insight into data, streamlining business operations. SaaS BI Software as a Service (SaaS) BI is a cloud-based delivery model where business intelligence applications are hosted, managed by a service provider, and  made available to customers over the internet on a subscription basis. Open Source BI  Open Source BI are  freely available BI tools  that make source code public, enabling users to modify, distribute, and improve the software per their specific needs. Embedded BI Embedded BI is a  set of tools integrated within business software, applications, or portals , enabling users to perform analytics within their usual workflows. Also, embedded BI  ensures companies don’t have to switch between applications. Collaborative BI Collaborative BI tool that  combines the processes of data analysis with social media tools. Further, these tools facilitate a seamless exchange of analytical results and decisions among team members within an organization. Location Intelligence (LI) Location intelligence (LI) is a traditional business intelligence tool that  uses geographic data to gain insights  into trends, patterns, and relationships within specific locations.















Business Intelligence for Big Data 



Business intelligence and big data are intrinsically linked. For instance, BI systems are often used to  make sense of the enormous datasets  that modern businesses accumulate.  Further, big data refers to  the vast volumes of structured and unstructured data  collected by organizations, including transaction records and social media posts.  On its own, big data is just a mass of information. However, when analyzed through BI techniques, it can  provide valuable insights to drive strategic decisions.  In other words, if big data is the raw material, BI is the process that refines it into a useful product.















Business Intelligence Trends



There have been several BI trends, especially as the technology continually improves.  One BI trend includes an increase in  the number of BI specialists and positions.  For instance, BI teams can include the following people:  BI managers  BI developers  BI architects  BUI analysts  BI specialists who work closely with data engineers  These individuals and other end users are part of the BI development process.  Another trend in BI is that businesses are  shifting from traditional approaches to agile BI.  Agile BI breaks up BI tasks into smaller projects.  As a result,  functionality improves , and employees are less likely to get overwhelmed. Also, agile BI  helps companies put BI features into use quicker  and modify plans as soon as the business changes.  Additionally, trends in BI include the following things:  Low-code and no-code development : More BI vendors are adding graphical tools that allow companies to develop applications with little or no coding.  The proliferation of augmented analytics : BI capabilities are starting to use artificial intelligence to offer natural language querying and machine learning algorithms, helping companies work efficiently.  Using the cloud more : BI solutions were slow at first. Now, cloud systems ensure business information is readily accessible regardless of where employees are.  Improving data literacy : BI teams are continually improving the ways they transform raw data so users can understand it. Also, BI teams have created data literacy initiatives, ensuring users understand their data. 















Closing Thoughts on Business Intelligence



Does your company need power BI software?  It doesn’t hurt!  BI tools  collect  and  organize information , offering several forms of data visualization to help users  understand what’s happening  in their business.  As a result, companies can  make better decisions  because they’re driven by in-depth data rather than guesswork!  How will your company use BI? Let us know in the comments section!  And good luck as you browse through business intelligence vendors! 




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