Business Intelligence
Business intelligence (BI) refers to
skills, technologies, applications and practices used to help a business
(or stakeholders)
acquire a better understanding of its commercial context. Business
intelligence may also refer to the collected information itself.
Business intelligence (BI) applications
provide historical, current, and predictive views of business
operations. Common functions of business intelligence applications are
reporting, OLAP, analytics, data mining, business performance
management, benchmarks, text mining, and predictive analytics.
Business intelligence often aims to
support better business decision-making. Thus a BI system can be called
a decision support system (DSS).
History of
Business intelligence
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 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.
Business
intelligence and data warehousing
Often BI applications use data gathered
from a data warehouse or a data mart. However, not all data warehouses
are used for business intelligence nor do all business intelligence
applications require a data warehouse.
Competitive
intelligence
The term business intelligence is often
used as a synonym for competitive intelligence. A broad definition of
Competitive Intelligence is the action of gathering, analyzing, and
applying information about products, domain constituents, customers, and
competitors for the short term and long term planning needs of an
organization. Competitive Intelligence (CI) is both a process and a
product. The process of collecting, storing and analyzing information
about the competitive arena results in the actionable output of
intelligence ascertained by the needs prescribed by an organization.
Key points of
this definitions (Competitive Intelligence):
-
Competitive Intelligence is an ethical
and legal business practice. (This is important as CI professionals
emphasize that the discipline is not the same as industrial
espionage which is both unethical and usually illegal).
-
The focus is on the external business
environment.
-
There is a process involved in
gathering information, converting it into intelligence and then
utilizing this in business decision making. CI professionals
emphasize that if the intelligence gathered is not usable (or
actionable) then it is not intelligence.
A more focused definition of CI regards it
as the organizational function responsible for the early identification
of risks and opportunities in the market before they become obvious.
This definition focuses attention on the difference between
dissemination of widely available factual information (such as market
statistics, financial reports, newspaper clippings) performed by
functions such as libraries and information centers, and competitive
intelligence which is a perspective on developments and events aimed at
yielding a competitive edge.
The term CI is often viewed as synonymous
with Competitor analysis but Competitive Intelligence is more than
analyzing competitors — it is about making the organization more
competitive relative to its existing set of competitors and potential
competitors. Customers and key external stakeholders define the set of
competitors for the organization and, in so doing, describe what could
be a substitute for the business, votes, donations or other activities
of the organization. The term is often abbreviated as CI, and most large
businesses now have some Competitive Intelligences functions with staff
involved often being members of professional associations such as the
Society of Competitive Intelligence Professionals.
The Society of Competitive Intelligence
Professionals (SCIP) is an organization for those who are interested in
learning more about Competitive Intelligence. Established in 1986, it
provides education and networking opportunities for business
professionals, and provide up to date market research and analysis.
“Members of the SCIP have backgrounds in market research, strategic
analysis, science and technology.”
The future of
business intelligence
A 2009 Gartner Group paper predicted these
developments in business intelligence market:
-
Because of lack of information,
processes, and tools, through 2012, more than 35 per cent of the top
5,000 global companies will regularly fail to make insightful
decisions about significant changes in their business and markets.
-
By 2012, business units will control
at least 40 per cent of the total budget for business intelligence.
-
By 2010, 20 per cent of organizations
will have an industry-specific analytic application delivered via
software as a service as a standard component of their business
intelligence portfolio.
-
In 2009, collaborative decision making
will emerge as a new product category that combines social software
with business intelligence platform capabilities.
-
By 2012, one-third of analytic
applications applied to business processes will be delivered through
coarse-grained application mashups.
Business
Intelligence
Business Intelligence is the process of
gathering meaningful information at any time to answer questions and
identify significant trends or patterns, giving key stakeholders the
ability to make better decisions.
Knowing exactly all the ins and outs of a
company is a primary need for a successful business, and therefore
getting the right data to the right person at the right time is
essential.
References:
http://en.wikipedia.org/wiki/Business_intelligence
http://en.wikipedia.org/wiki/Competitive_intelligence
http://www.aexis.com/ |
