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Introduction to Business Intelligence

-WAL-MART uses large amounts of data and dominates the industry.

-Amazon isn't just an e-commerce website. It follows "test and learns" approach to formulating changes in its business.

-Banks run 30,000 experiments in order to determine the customers that are valuable to the bank and come up with credit card offers.

All these examples demonstrate and allow us to understand business intelligence.

What is business intelligence?

Business intelligence has been around for a really long time. However, it gained fame only in the early 1990s.

Business intelligence is about delivering relevant and reliable information to the right people at the right time with a goal to achieve better decisions. In order to do this, business intelligence requires methods and programs to collect unstructured data and convert this data into information and present it to improve business decisions.

Business Intelligence thus takes the vast amount of data generated by business and presents it in a meaningful actionable way. It aims to allow easy interpretation of big data. Business intelligence can be used to support a wide range of business decisions ranging from operational to strategic decisions.

One can understand business intelligence through the following example ;

Imagine business intelligence as a grocery store.

When we enter a grocery store and look for specific items, say eggs, bananas, milk, vegetables etc. , we do not need to find helpers who can help us to find where the respective items are.

Instead, stores are organized into aisles. Each aisle will have signs that tell us the kind of item stored there. The items in the store are business's data. We need to collect information on production billable and sales.

We need to go to 3 different experts and ask where to find the data. Later on, we go to someone else and make them compile this information for us. This is Business Intelligence, who will compile the data for us.

Business Intelligence Tools:


This tool manages a business performance to achieve sort and long-term goals.


This type of an approach quickly answers analytical queries.


It is a tool that uses data mining to forecast business outcomes.


This tool provides techniques to discover data, control, and processes. Data mining is used to uncover patterns in large sets of data.


These are computer tools that take care of managing information in a visual format. Spreadsheets consist of rows and columns.


These are the tools which are responsible for extracting, sorting and summarising data.


This equipment is used for reporting and data analysis.


It is a framework that utilizes the best practice for organizational decision making.

Applications of Business Intelligence

Increasing customer loyalty

Business intelligence is used to increase the customer loyalty. This is done by identifying the most profitable customers. To carry out this, a lot of data regarding the customer should be correctly analyzed like age, profile, sex, marital status, number of children etc.

Detecting and correcting budget deviations

There are a lot of companies who are affected by deviations in the budget. Generally, it is the large-scale companies who are affected. An analysis of the strategies of the company can help to quickly detect the reason for such deviations. Once the cause of the deviation is known, proper corrections can be applied.

Stock optimization

If the sales of a particular product shoot up, it becomes a big challenge to store the right amount the stock to maximize the profits.

For example, some companies in the canning and preserving sector have been able to increase their profits by nearly 10% using BI technique based on the adaption of a decision support system.

Performance measurement and benchmarking

This involves determining the performance of the employees of an organization. This helps the organizations to determine its business goals.

  • Boosts productivity 
  • Improves visibility 
  • Fix accountability
  • Streamlines business processes 
  • Easy access through a single, personalized portal
  • Decreases costs and time associated with typical report writing