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."
In 1989 Howard Dresner (later a Gartner Group analyst) proposed BI as "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.
Business Intelligence (BI) is an umbrella term for a set of tools and applications that allow corporate decision-makers to gather, organize, distribute and act on critical business information. BI applications include activities of online analytical processing (OLAP), decision support systems (DSS), data warehousing and data mining. 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. Business Intelligence often aims to support better business decision-making. Thus a BI system can be called a decision support system (DSS).
Business Intelligence is a broad field of study. The major thrust of business intelligence theory looks at certain factors to make high quality decisions. These factors include customers, competitors, business partners, economic environment and internal operations.
Around five to six years ago, due to increasing automation, companies accumulated huge amounts of data. It was felt that in order to derive benefits from the data it had to be consolidated and formatted according to specific needs. This realization gave rise to applications that enabled organizations to convert data into usable formats.
Business intelligence is used to collect data from customers usually within the marketplace. There are many ways to collect data from your customers. Once this data is collected, it is up to an organization to use this data appropriately. Business intelligence is a process in which vast amounts of data can be viewed and vetted giving managers and business owner's important information that can be resourceful.
BI relies on Data Warehousing, making cost effective storing and managing of warehouse data critical to any BIDW solution. Without an effective data warehouse, organization cannot extract the data required for information analysis in time to facilitate expedient decision making.
Another way that business intelligence can help an organization is by taking into consideration key economic indicators such as consumer spending, inflation, unemployment, upturns and downturns in the economy, etc. Without business intelligence, your organization can't process information effectively in order to modify strategies that fit the current economy.
The advantages gained by implementing business intelligence are:
1. Enhanced reaction and sensitivity of the organization toward the customers
2. Identification of customer demands
3. Capability to respond to market transformations
4. Improved optimality within operations
5. Effective use and saving of wealth
6. Intricate study assisting for future prospects
7. Optimum utilization of organizational resources
Though the basic functionality of BI tools has existed for quite a long time now, BI as a concept is just picking up in the market. Over a period of time, as BI vendors showcase more success stories, the market is bound to respond in a positive way. And as more and more companies seek to find intelligence in their data and take crucial decisions based on it, BI should start looking like an increasingly wise choice.
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