What is Business Intelligence?
The general understanding of Business Intelligence is the process by which data collected by an enterprise (sales, purchases, production, etc) is compiled into summary reports for the management and executive leaders to enable to understand the overall status of their business. This data is usually stored in databases, although smaller enterprises also stores this in excel files. This data are records of core activity performed by the business. For example, a manufacturing business keeps records of raw material consumption, stock of products, payments, costs, profits and client history among others. A retail business on the other hand will keep records of sales , item stock, orders, profits, expenses and so on. Making sense of this data is one aspect of Business Intelligence. Another aspect is making sense of market data that is outside the direct sphere of influence of the enterprise. This is more difficult to obtain as it requires extensive market surveys to compile. In summary, Business Intelligence is the process by which data is transformed into information.
In the majority of enterprises, the extent to which business data is analysed and transformed into valuable information for a company’s executive management is often limited to tabular reports that answers two basic questions: How many? and How much? How many phones have we manufactured in a given period? Or, how much turnover was made from the sales of an item?
Going beyond tables…
The basic tabular reports described above are the very tip of the BI iceberg. BI analysis can be categorised into 5 groups of questions which it attempts to answer:
- How Much?
- How Many?
- How Often?
- How Likely?
- How Quickly?
This article sets out to give examples of BI analysis relating to the first 3 questions above. We will briefly review the last 2 questions, but these are beyond the scope of this article and are listed here for the information of the reader.
Next article: How Many? – BI General Question (Part 2)