Business intelligence refers to a specific class of computerized information system that supports business and organizational decision-makingactivities, technologies, applications and practices for the collection, integration, analysis and presentation of business information. The purpose of business intelligence – a term that dates back to 1958 – is to support better decision making. Thus, business intelligence if also referred to as decision support system (DSS).
For instance- a self service software that helps the employees of an organization track their payslips, tax withholdings, personal information, leaves and may or may not be integrated with the Human Resource Information System. (HRIS). Another instance is executive dashboards. A supply chain management software and clinical diagnostic systems can also be a good example. Clinical or Diagnostic Decision Support System is an interactive computer program that assists physicians and health professionals with their decision making tasks.
Business intelligence applications also tackle sales, production, financial and many other sources of business data. This includes, notably Business Performance Management. Information may be gathered of comparable companies to produce benchmarks. Thus all the decision making software may be included in the business intelligence information systems.
History of Business Intelligence
No business analyst software was available before the information age and businesses had to rely on decisions made by numbers collected painstakingly by business analysts for months. Collection of data improved with the automation of data collection. Drawbacks still existed as information collected could not be moved between or within systems. Analysis of information was slow, and often required the use of instinct.
Business intelligence was further popularized in 1989 by Howard Dresner, as an umbrella term to describe “concepts and methods to improve business decision making using fact based support systems.” Modern businesses use automation, specialized software and automation tools to gather information. This allows large volumes of data to be extracted, transformed and warehoused. It also helps to increase the speed at which information becomes available for decision making
Key Topics in Business Intelligence
Business intelligence often uses Key Performance Indicators (KPIs) to assess the present state of business and prescribe a course of action. Comparatively, performance data in the early days was not available for weeks or months. Introduction of computers and web based applications, have reduced delays. The KPI methodology was further expanded with Chief Performance Officer Methodology, which incorporated KPIs and root cause analysis into a single methodology. Some companies facing higher credit risk loading such as credit card companies and wealth management services are now able to offer daily analysis of data. The fast pace requires analysts to use IT systems to process large volumes of data.
Business intelligence has come a long way since the time it was first discovered as a tool for businesses. Computers and data management resources have played a role making it easy for companies to indulge in such activities.
