A Guide to Business Intelligence Tools

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contentThe amount of data in the world is growing bigger every day and, in order to use it for better decision making, companies are using business intelligence tools to access and analyse the data. Here we look at what business intelligence tools are and what they do, and describes some real world examples of their uses.

What is business intelligence?

Business intelligence (BI) is a discipline that involves the use of various computer technologies to turn raw data into useful information, that could help a business make more informed decisions, cut costs, identify inefficiencies and uncover opportunities.

Business intelligence includes several related activities such as querying, reporting, analytical processing and data mining

What are business intelligence tools?

Business intelligence tools are those used in business intelligence to perform these data handling activities. They include commercially developed tools that can be bought off the shelf, and also customised tools that are developed for specific industries and designed to perform particular tasks.

Data is often stored in a data warehouse, which is a database that combines information from various systems in one central location. The data is stored in a logical structure including columns and summary tables to make extraction faster and easier. Business intelligence tools can extract the data and display it in intuitive ways that can help to identify trends, relationships and anomalies.

Before attempting to use business intelligence tools, an organisation needs to make sure that its data is ‘clean’ (i.e. accurate, complete and unduplicated). It also needs to know what kind of data it wants to extract, how that data will be collected meaningfully and how it will be analysed so that it is of maximum use to the organisation.

The types of BI tools required will ultimately depend on the condition of your organisation’s data. If it’s scattered across different databases at various locations, you’ll need to build a central data warehouse and invest in management tools to move and restructure the data. If your data is already warehoused and clean, then you’ll need data discovery tools that include analytical processing, data mining and reporting capabilities.

Types of business intelligence tools

There are a wide range of different business intelligence tools. The very simplest of these is the humble Excel spreadsheet, which continues to be used by many due to its ease of use and ability to be understood by everyone. Other more sophisticated types of business intelligence tools include:

  • Querying tools – These are tools that are used to administer and execute queries against common database management systems.
  • Reporting tools – Reporting tools display data in a way that it can be best understood, such as in graph form and other visualisations. Common applications for reporting tools include business operations reporting and dashboards.
  • Analytical tools – These include any tools that analyse data (examine its elements) in an attempt to find meaningful patterns.
  • OLAP tools – OLAP tools are multi-dimensional analysis tools that allow the user to view the data from multiple angles or dimensions. This method makes it easier to discover the causes of problems, to identify trends, and to compare performance levels across different groups
  • Data mining tools – These tools are used to discover associations and correlations among different factors in data. They are usually only employed by highly specialised users.

Business intelligence is big business these days, and some of the biggest names are involved in the development of BI tools, including IBM, Oracle and Microsoft.

Today’s BI tools are all about ease of use as much as functionality. That’s because the majority of people now using BI tools are not IT staff – as was previously the case – but rather by business people wanting to explore their own data.

And rather than traditional on-premise software, BI tools are being accessed more and more in the cloud because they are cheaper, faster and easier to use in this manner.

Business intelligence examples

Business intelligence is used by all sorts of organisations to improve their decision making and ultimately their bottom line. Notable examples include:

  • Wendys – This huge US restaurant chain uses business intelligence to select its new menu items, to negotiate contracts with its suppliers and to identify and eliminate inefficiencies within the group.
  • New England Patriots – This popular US football team uses business intelligence to select its players, to analyse game statistics and even to build its fan base. It won the Super Bowl three times in four years.
  • Walmart, Amazon and Yahoo – These giant organisations all use business intelligence tools extensively to maintain their positions as leading players in their respective fields.

Future business intelligence

Dollarphotoclub_59476097The benefits of decision making based on facts drawn from data are now being realised in all major industries, from marketing and finance to manufacturing and engineering.

As the use of business intelligence tools grows, the emphasis is predicted by many to be shifting away from purely reporting tools and more towards the use of analytical tools in a wide range of situations.

Big Data is also very much at the forefront of BI innovation. Big Data is the term used to describe data sets that are just too big and too complex to be interrogated or manipulated by normal business intelligence tools. Conventional BI tools are simply not fast enough, so a number of vendors are now developing business intelligence tools specifically designed to handle Big Data.

One possible application for Big Data analytics is event data streams. Some experts believe that in the not-too-distant future, event data streams generated by sensors will be analysed by BI tools to produce insights from real-time environments. If that eventuates, then Big Data  analytics will have succeeded in pervading every corner of our society and business intelligence will have truly come of age.

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