Business intelligence (BI): What it means, why it matters, and best practices
What is business intelligence?
Business intelligence (BI) is the combination of applications, processes, and infrastructure that, as Gartner explains 1, “enables access to and analysis of information to improve and optimize decisions and performance”. From expense management to supply chain visibility, sales pipeline management and beyond, modern BI tools are focused on extending the value of data across departments, roles, and increasingly, the ecosystem of partnerships that enable organizations to effectively operate and compete in today’s fast-paced business climate.
The history and evolution of BI
The emergence of business intelligence can be traced to the decision support systems of the 1960s, evolving in three major waves of innovation over the decades. The challenge is always the same: How can businesses analyze data to make discoveries that lead to competitive edge? Each generation has come a little closer to that promise but it’s the third generation of BI we are now entering that holds the greatest potential to spread the value of BI to every business user and unlock all the value in data:
1st Generation BI – Centralized:
In the early days of BI, if a person wanted to learn something from data, they had to submit a question to a data analyst with the skills to create a query or use a complex technology stack that analyzed multi-dimensional data sets (OLAP data cubes 2). Often weeks later, they’d get a report that could be out-of-date or raised further questions. This inefficient “Ask > Wait > Answer” cycle limited BI’s value, while reaching only 25% of business users with static information.
2nd Generation BI – Decentralized:
The next wave of BI, pioneered by Qlik, introduced user-driven BI. This replaced the complex technical stack with more agile methods to prepare and load data, and intuitive ways to visualize and explore that data. Business analysts could create analytics apps for key processes, delivering interactive BI dashboards to everyday users. Eventually even more lightweight data visualization tools came to market, and while BI could now reach between 25-50% of employees, most of these visualization tools lacked governance. Because these tools focus on content authoring, low data literacy rates limited user adoption and led to the use of untrustworthy data sources.
3rd Generation BI – Democratized:
BI is entering its next phase, driven by new approaches to how we manage data, deploy analytics and improve data literacy. Trusted data is accessible to all users through governed data catalogs. Augmented intelligence (AI) accelerates discoveries and increases data literacy by suggesting insights, automating processes, and providing conversational, natural language interaction. And embedded analytics brings BI to the applications and processes that people and machines (IoT analytics) interact with daily. These innovations are enabling organizations to reach the 50-75% of employees not yet using BI, offering a huge potential increase in value from data.
Key Capabilities of Modern Business Intelligence Tools
The intense pace of change is prompting organizations of all types to reinvent how they do business. As demand for data driven insights rapidly increases, businesses that can execute a pervasive, modern approach to BI are best positioned to lead in their industry. Here are the key capabilities to look for when evaluating modern BI tools.
Data integration and management
The most successful business intelligence initiatives combine a smart analytics strategy with an effective data strategy. Raw data only gains value when it can be transformed into highly accessible, analytics-ready information.
This often begins by moving source data (ERP, CRM, etc.) into a central repository like a data lake or data warehouse. Data connectors in the analytics system load data from these repositories as well as specific applications and files so it can be prepared for use. This can be slow and tedious, requiring data experts which can create bottlenecks at scale. However, innovative data replication and data migration technologies can automate the integration process. In addition, Governed data catalogs that profile and document every data source let business users easily access, create, and share data sets on their own, combining any data they need to analyze.
“By 2020, businesses that give users access to a curated catalog of internal and external data will gain twice as much value from analytics investments.”3
Modern Business Intelligence and Analytics Technologies
At the core of the best modern business intelligence software is a next-generation data analytics engine that enables users to explore data freely while performing ultra-fast analytics calculations that remove the limits of query-based technologies which many BI tools rely on. Other key BI technologies that enable a modern approach to analytics include:
The ability to explore and interact with data makes it easier for users to explore, discover patterns, and gain insights from data. Smart visualizations make data even more actionable, revealing the shape of the data, highlighting outliers and trends, and putting data in the ideal context to answer any question.
Search and interactive selections
The best BI platforms let users freely explore data using text search and interactive selections to filter within charts, tables and other elements. This is most effective with technologies that map every data association, keeping all elements in the current context as a user interacts while revealing related and unrelated values to guide analysis.
AI and machine learning are quickly becoming an essential facet of BI, quickly processing massive volumes of data to suggest relevant insights and automate processes while letting users interact conversationally. This augments human intelligence and increases data literacy so more users can get value from business intelligence.
Open APIs and extensibility
Organizations face an ever-growing array of specific business intelligence needs and uses cases. An open platform that supports the ability to create custom applications and extensions, integrate with other technologies, and embed analytics in existing business applications processes is essential to maximize the value BI.
Collaboration and sharing
Modern BI tools offer users the ability to easily create and share data sets, analytics, and insights across an organization. The most effective BI ecosystems offer a governed, centralized hub to facilitate this collaborative process and equip users with robust interactive data storytelling capabilities to circulate their discoveries.
Governance, security and flexible deployment
Today, demand for business intelligence comes from the C-suite to the edge of every organization. Reaching this scale requires governed control, trusted security and the ability to deploy and scale analytics with any combination of infrastructure from on-premise to the most modern cloud environments.
From self-service BI and dashboards to mobile BI and conversational analytics, the most effective modern business intelligence software supports a wide range of business needs and users, allowing every employee to access the insights they need, regardless of technical skill. Here are the main ways organizations use business intelligence tools to get more from their data.
Gone are the days when business users had to wait days or weeks for data analysts to build reports. Self-service BI tools let users easily explore data and make discoveries using natural language search and interactive selections and create their own visual analytics with simple drag-and-drop tools. And AI is making these processes easier than ever.
The BI dashboard is the user’s gateway to insights, allowing them to visually explore KPIs through charts, graphs, scatter plots, maps and other elements. And with modern interactive BI dashboards, users can take a deep dive into their data using powerful search and selections to discover insights that go beyond static KPIs.
The BI dashboard is the user’s gateway to insights, allowing them to visually explore KPIs through charts, graphs, scatter plots, maps and other elements. And with modern interactive BI dashboards, users can take a deep dive into their data and discover insights that go beyond static KPIs using powerful search and selections.
Custom & Embedded Analytics
Embedding analytics into applications like CRMs and ERPs helps people find insights and deliver value faster, right where they work. BI technology that offers open APIs and developer tools let organizations embed analytics, build custom BI apps, and create visualizations and extensions to address the ever-growing demands for insights.
Work happens everywhere today. And to do their best work, employees need access to business intelligence insights whenever and wherever decisions are made. Mobile business intelligence lets users create and explore analytics and collaborate using any device. The best mobile BI solutions support interactive analytics even when users are offline.
While BI reporting is one of the most traditional forms of business intelligence, it remains an essential BI capability. While many second generation BI tools don’t offer reporting, some offer highly flexible, modern reporting capabilities. This includes drag-and-drop report creation and formatting, pixel perfect output in popular formats and flexible automated delivery.
“By 2021, conversational analytics and natural language processing will increase BI adoption from 35% of employees to more than 50%.”3
Organizations in every industry are using business intelligence to empower their employees with insights that drive better decision-making and business performance. Here are some key BI strategies frequently used across major departments in an organization:
Finance teams optimize expense management, enhance forecasting, budgeting and planning, and better manage revenue, risk and compliance.
According to BARC’s BI Survey, the top benefits of business intelligence software are faster and more accurate planning, analysis and reporting, better business decisions and improved data quality. But how do these translate to real business value? With the right business intelligence platform and strategy, here are four major ways BI can deliver value and drive digital transformation within organizations:
1. Reinvent business processes, optimizing business performance
2. Understand customers to deepen loyalty and increase lifetime value
3. Uncover unexpected new sources of revenue
4. Better balance risk with reward across business operations
What are BI best practices?
Build Data Literacy with Training and Tools
Organizations with higher data literacy rates have greater enterprise value. But only 24 percent of all workers say they can read, work with, analyze and argue with data. Close the literacy gap by giving employees access to BI tools that are easy to learn and use, build confidence, increase adoption and empower every user.
Ensure Flexible Deployment and Scalable Architecture
Scale and deploy business analytics to every corner of the organization with the help of a multi-cloud architecture. This gives users the ability to access and share data insights between on-premise and cloud deployments while keeping governance and trust standards high.
Centralize BI Governance, Security and Management
Keep data and analytics secure through a model that lets administrators set rules based on users, actions and resources. Ensure that everyone is working with the same, accurate data by implementing governed, centralized libraries of data, analytics and measures.
Extend the Value of Your BI Investment
Companies using embedded analytics are 89 percent more likely to see higher operating profits of 10 percent or more. Ensure your BI platform gives employees access to data insights in their everyday applications.
Transform your business with a new generation of BI technology.
Business intelligence is most effective when you combine an agile data strategy with a modern analytics strategy. Only Qlik offers end-to-end, real-time data integration and analytics solutions.
Go from raw to real-time, analytics-ready data, fast.
Enable DataOps for any analytics environment, from Qlik to Tableau, PowerBI and beyond. Deliver the latest, most-accurate information possible with real-time data replication and ingestion from Attunity Replicate® and automation of your data lake or data warehouse using Attunity® Compose.
Uncover bolder insights with world-class analytics.
Qlik Sense sets the benchmark for a new generation of data analytics. With its one-of-a-kind associative analytics engine, sophisticated AI, and scalable multi-cloud architecture, Qlik is built to empower people at all levels of your organization to make bigger discoveries and better decisions every day.