A phrase that was first defined in 1958, business intelligence (BI) is an umbrella term that covers a range of processes that involve collecting data and using it to contribute towards achieving particular strategic goals. The concept was developed by Hans Peter Luhn, a researcher at technology giant IBM, who described BI as being “the ability to apprehend the interrelationships of presented facts in such a way as to guide action towards a desired goal”. It may seem like a simple enough idea, but there are several key elements that BI is made up of that ensure it is an effective and efficient practice. These are:
- Data mining
- Data quality and interpretation
- Predictive analysis
The process of BI is carried out by following these five steps in the above order. Firstly, data is accessed, formatted and then delivered to the relevant internal and external teams.
Next, the data is studied so that trends are identified and relationships between different groups of information are recognised. After this, data mining occurs, where original insight is put together based around the information that has already been gathered, before this is then put into hypothetical real-world situations to determine if there is a correlation between the data and the operations taking place within the company.
Finally, predictive analysis takes place, where attempts are made to predict future probabilities and how this can be used to benefit the organisation. The data itself can come from a range of sources, from customer interaction and management of employees to financial administration. As a result, the use of customer relationship management software and similar programs that relate to HR or resources is critical to BI. One of the most important aspects of BI is to maintain a strategic focus, as this is where most failed processes fall foul. If you would like to learn more about how to refine your own techniques in this area, then perhaps one of our corporate training courses can help.