Business intelligence, or BI, is an umbrella term that refers to a variety of software applications used to analyze an organization’s raw data. BI as a discipline is made up of several related activities, including data mining, online analytical processing, querying and reporting.
Companies use BI to improve decision making, cut costs and identify new business opportunities. BI is more than just corporate reporting and more than a set of tools to coax data out of enterprise systems. CIOs use BI to identify inefficient business processes that are ripe for re-engineering.
With today’s BI tools, business folks can jump in and start analysing data themselves, rather than wait for IT to run complex reports. This democratization helps users back up—with hard numbers—business decisions that would otherwise be based only on gut feelings and anecdotes.
The BI Market is expected to reach $20.8 billion by 2018, at an estimated CAGR of 8.3% from 2013 to 2018.
A broad range of applications for BI has helped companies rack up impressive ROI figures. Business intelligence has been used to identify cost-cutting ideas, uncover business opportunities, roll ERP data into accessible reports, react quickly to retail demand and optimize prices.
Besides making data accessible, BI software can give companies more leverage during negotiations by making it easier to quantify the value of relationships with suppliers and customers.
Within the walls of the enterprise, there are plenty of opportunities to save money by optimizing business processes and focusing decisions. BI yields significant ROI when it sheds light on business bloopers. For example, employees of the city of Albuquerque used BI software to identify opportunities to cut cell phone usage, overtime and other operating expenses, saving the city $2 million during three years. Likewise, with the help of BI tools, Toyota realized it had been double-paying its shippers to the tune of $812,000 in 2000. Companies that use BI to uncover flawed business processes are in a much better position to successfully compete than companies that use BI merely to monitor what's happening.