The Origins of Business Intelligence

Now that we have a better understanding of what BI is, let’s take a brief look at its origins. This examination will help show where BI fits with other parts of the IT portfolio, such as enterprise transactional applications like enterprise requirements planning (ERP), and will help differentiate BI uses from other IT uses. It’s also important to understand that enabling BI technologies are mature, low-risk technologies that have been used successfully by major companies for more than a decade.

Although recently the term BI has become one of the new IT buzzwords, the organizational quest for BI is not new. Approaches to BI have evolved over decades of technological innovation and management experience with IT. Two early examples of BI are :

1. Decision support systems (DSSs): Since the 1970s and 1980s, businesses have used business information and structured business analysis to tackle complex business decisions. Examples include revenue optimization models in asset-intensive businesses such as the airline industry, the hotel industry, and the logistics industry, as well as logistics network optimization techniques used in industries that face complex distribution challenges. DSSs range from sophisticated, customized analytical tools running on mainframe computers to spreadsheet-based products running on personal computers. DSSs vary enormously in price and sophistication and are application-specific. Accordingly, they have not systematically addressed integration and delivery of business information and business analyses to support the range of BI opportunities available to companies today.
2. Executive information systems (EISs): These were an early attempt to deliver the business information and business analyses to support management planning and control activities. Principally used on mainframes and designed only for use by upper management, these systems were expensive and inflexible. As BI applications and high-performance ITs have come to market, EIS applications have been replaced and extended by BI applications such as scorecards, dashboards, performance management, and other “analytical applications.” These applications combine business information and business analyses to provide custom-built and/or packaged BI solutions.

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What Is Business Intelligence?

If that’s what BI is not, then what is it? BI combines products, technology, and methods to organize key information that management needs to improve profit and performance.

• A single product. Although many excellent products can help you implement BI, BI is not a product that can be bought and installed to solve all your problems “out of the box.”
• A technology. Although DW tools and technologies such as relational databases ETL tools, BI user interface tools, and servers are typically used to support BI applications, BI is not just a technology.
• A methodology. Although a powerful methodology (such as the our BI Pathway) is essential for success with BI, you need to combine that methodology with appropriate technological solutions and organizational changes.

More broadly, we think of BI as business information and business analyses within the context of key business processes that lead to decisions and actions and that result in improved business performance. In particular, BI means leveraging information assets within key business processes to achieve improved business performance. It involves business information and analysis that are:

• Used within a context of key business processes
• Support decisions and actions
• Lead to improved business performance

For business, the primary focus is to increase revenues and/or reduce costs, thereby improving performance and increasing profits. For the public sector, the primary focus is service to citizens, coping with budget constraints, and using resources wisely in support of an agency’s mission.

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Business Intelligence Definitions

Business intelligence (BI) is a technology which is based on data warehouse and it is provides a strategic advantage. BI system has four major components which is that combination of data warehouse, business analytics; a collection of tools for manipulating, mining and analyzing the data in the data warehouse, applications and methodologies.

BI’s major objective is to enable interactive access (sometimes in real-time) to data to enable manipulation of data and give business managers and analysts the ability to conduct appropriate analysis.

By analyzing historical and current data, situations and performances, decisions makers get valuable insight that enable them to make more informed and better decision. The process of BI is based on the transformation of data to information then to decisions and finally to actions.



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