Business Intelligence Business Essay


Business Intelligence has been a result of 50 years of research from statistical reporting through MIS up till data mining and OLAP. The traditional methods of decision making through knowledge, experience and some times think work were very inefficient. This paper shows how BI has come out as an apt solution to this problem in the present competitive world. Companies like English Airways, Volkswagen AG, Shell Services International, etc. have obtained operational efficiency through BI implementation. This newspaper also shows how BI is an essential factor in almost all of the industries including airways, FMCG, services, processing, logistics, hospitality, etc. as it certainly makes you understand your business better. This newspaper discusses about how companies can enjoy a whole lot of advantages through BI implementation and the most crucial of them are: lower cost, increased revenue and better customer satisfaction. BI is becoming necessary to all size of organizations as the quantity of data is ever increasing therefore is the price. To sustain in the market a company has to put into practice BI. BI is projected to develop exponentially in the foreseeable future.

Keywords: BI, Data Mining, Data Warehouse, OLAP, predictive analysis

List of contents

Table of Contents


Business Intelligence or BI is a computer-based system which is utilized by organizations for decision making goal. It consist of huge data warehouse or data marts of business data, from which it performs mining, spotting, digging or analysing operations to create appropriate results or records. BI applications include a variety of activities for statistical examination, Data mining, querying and reporting, business performance analysis, benchmarking, Online Analytical Processing (OLAP), Decision Support System (DSS), forecasting and predictive research. It offers organizations with significant information regarding employees, customers, suppliers and other business associates, which is often found in effective decision making.

Up till 1989, a lot business decision-making system existed. In 1989, Howard Dresner coined the term "BI" which acted as an umbrella term for everyone such systems. The amount below shows the way the decision making process is affected by application of BI.

Statement of Problem

In this newspaper we will discuss, the way the use of BI will increase the decision making capacity for managers and exactly what will be its effect on earnings. We will analyse the effectiveness and performance of companies who have implemented BI. We will also discus how BI can be implemented in various areas and its advantages.

Purpose of Study

In a business a whole lot of decisions are considered daily which is very important to take effective decisions to achieve organization goals. If you attempt to identify policies for everyone decisions or seek the services of extra skilled personnel for taking decisions it only increases cost and might not lead to effective decisions. If you give you're existing employees the tools for effective decisions, it will bring about an agile organization and it will be a cost effective solution.

But before putting into action BI solutions it's important to understand your requirements and selecting the correct application. An excellent BI program for the incorrect business functions is a waste products of time and money.

BI can be custom-made for implementation in great deal of industries with regards to the specific needs of that field. Finally, we will also analyse the advantages of BI implementations to professionals and organizations.

Significance of the study

This paper gives an insight directly into business intelligence and its importance in the current competitive world. It'll answer the essential questions regarding BI like what it is, why to make use of it and the way to use it. This newspaper will organizations realize the value of BI in assisting them preserve in modern world.

Importance of good decisions

In an organization, managers have to have good entrepreneurship skills to be able to consider effective and well-timed decisions that will cause business success. The significance and magnitude of the decisions boosts as the level of managers become higher. Professionals have to constantly take decisions while employed in a business like

How much to create and where?

How much demand to expect?

How much to purchase and at what price?

When to start marketing campaign and what channel to utilize?

How much discount to offer and also to whom?

Where to market with what price?

How to measure performance and what pay back to offer?

It is very important to consider good decisions in every situations, for well-being of business. Effective decisions used have direct effect on the revenues, profitability, production and performance of employees. Any decisions used for the funding of the organization are extremely critical and have to be taken with utmost care and attention.

The quality of service or product greatly depends upon the decisions considered during making or requirement standards stage. The decisions are also considered for predicting or forecasting the demand. If effective decisions are taken in this case then it will lead to reduced wastage, delays and other hindrances.

Decisions are considered with regard to customers, suppliers, employees and other companions. A good decision making process will ensure these decisions are taken effectively, that may inturn result in cordial and permanent romance with them

Evolution of BI

Traditionally, good decisions in which a result of experience and knowledge. But it can take years to get such experience and knowledge, while some employees may never achieve it. Hence decision support systems arrived to make use of.

In 1958, IBM researcher Hans Peter Luhn was the first one to use the term BI and he defined intellect in his words: "the ability to apprehend the interrelationships of presented facts so concerning guide action towards a desired goal". The business intelligence that we understand today is progressed from the decision support systems whose development began from 1960 through 1980's. In 1989, Howard Dresner coined the word Business cleverness as an umbrella term for all those such systems.

During the 1980's, manual accounts were well prepared. Data was stored physically as each exchange occurred. These reports were used for forecasting and demand-supply management.

In the late 80's, Management Information System (MIS) originated which programmed all the business processes under a unitary construction. It provided the managers with static records needed to deal with organizations effectively. As the MIS originated increasingly more modules were added which in turn protected all the areas of business functions including people management, supply chain management, customer romantic relationship management, fund management, performance management, etc.

But these systems provided only statistic survey. These information were good for analysing past deals but they didn't aid the decision making process. Online Analytical Handling (OLAP) allowed users to analyse and manipulate data from various perspectives. It arranged the data by means of cube which allowed users to consider more dimensions for analysis. The reports generated from OLAP where faster than those from relational databases for this reason. Data Mining is a process of extracting habits from data. Data Mining from Data Warehouses was then used for predictive research. Querying and reporting techniques were used for forecasting and decision making.

The Business Intelligence was developed on the back drop of Data Mining approach. BI is a system which analysed the historical, real-time and predictive data and given answers to decision making problems.

Performance of organizations using BI

Companies of all sizes are utilizing business brains to optimise the usage of their data. According to a survey by a respected research firm, Business Brains was the most notable goal of the organizations worldwide. Below are a few of the firms who have put in place BI

Volkswagen AG: This Company has implemented BI in all of its departments like money, sales and marketing, purchasing, development and research and development. It is now the third largest car producer on the globe. It has a market show of 20 % on the planet passenger car section.

MasterCard International: It is an American multinational company, who process the obligations between finance institutions of retailers and the card-issuing banks who use credit and debit card for making buys. It has extended its BI from internal users to exterior users as well. It allows stores and advertising providers to monitor their business carefully through access to BI.

Handspring, Inc: BI has standardized their trades, report platforms, etc and led to better efficiency.

Shell Services International: The execution of BI has led to reduced working capital, increased turnover and margin and better handles customers and suppliers. Shell is now the world innovator in lubricant source.

TruServ: Implementation of BI has resulted in better efficiency in logistic functions and reduces inventory costs by $50 million.

BOC Gases: It is one of the world's leading professional gas dealer and has integrated BI using its ERP for better efficiency.

Owens & Small: It is a medical materials distributor company and implementation of BI has resulted in increased income up to $80 billion.

Ben & Jerry's: It really is an American ice-cream machine. BI has helped the corporation better understand the buyer behaviour and accordingly take up appropriate marketing or promotional strategies. It has additionally helped them in fulfilling the customer demands.

TaylorMade: The implementation of BI has helped this golfing products company empower its sales force with timely and correct information leading to increased sales revenue.

Ingram Micro: This Company is the world's greatest technology distributor and a leading technology sales, marketing and logistics company. They have used BI to achieve new levels of client satisfaction.

British Airways: The implementation of BI has led to increased profits and it offers cut costs to about $100 million.

ABN AMRO: This loan provider has integrated BI in its HR division causing better performance by employees and their contribution to business success.

Process of applying BI

Before you use business brains system it is very critical to analyse and extensively study the requirements of your business from the system. This can be done by preparing a questionnaire and taking research. Key individuals should be identified and interviewed. They might be internal (employees, managers and owners) as well as exterior (customers, suppliers and other business affiliates). It is very important to get certain requirements correct for the success of you business intelligence system.

The development of a BI system is not an entirely vendor area process. It needs initiatives from your part as well. Once an apt seller is selected, the development should improve with continuous guidance and inputs from company side.

Applications of BI

As we've seen the execution of business brains has helped organizations to accomplish their goals in an effective way. Its request is not limited to limited segments. It has a wide-spread use. It has become obligatory for organizations to apply BI to sustain and maintain their market talk about in the competitive market. A number of the industries where BI can be executed are the following

Retailing: Business Cleverness can be used to forecast the demand and analyse its fluctuations as time passes. This will help in optimizing the size of inventory in order to meet the customer demands. It will also help the firms to better understand the consumer behaviour to be able to steer their marketing promotions. It will help in enhancing romantic relationship with suppliers.

Banking: BI will help the bankers and finance institutions in identifying the customer base. This will help them in planning their marketing strategies. It will help the finance institutions in deducing performance metrics and benchmarks to be able to measure the business performance. It can also assist in knowledge management or learning management. It will help in management of large amount of data.

FMCG: BI provides predictive research to forecast demand and understand consumer behavior. Optimization of making operations and procurement functions will lead to better relationship with suppliers. Standardization will lessen the strain of transaction tracking and multiple source accounts.

Automobile: BI can help in optimization of production, research, HR, circulation, marketing and money functions by providing effective decision making tools. In a nutshell Business Cleverness has enterprise extensive applications in every departments.

Distribution and Logistics: BI will enhance communication with business partners which will lead to effective and coordinated operations. BI will provide intelligent accounts to optimize the complete operations of the business.

Airways: BI will remove hindrances in the solution management system. BI can be used to analyse the consumer behaviour structure and predict future behaviour patterns to be able to increase functions efficiency by enhancing airfare management and improve sales income. Consumer requirements can be satisfied efficiently.

Manufacturing: BI will improve marketing communications with suppliers and standardize all the orders developing with them hence increasing efficiency. BI will forecast the demand for product that will optimize inventory, development and procurement size. BI applied in HR division can help in understanding the worker needs and challenges and for their performance appraisal.

Hospitality: BI can help Hospitality companies to act in response quickly to problematic situations. It will help them in controlling problems in an efficient and timely manner. It will also give them an advantage over their opponents by notifying them of new market opportunities and help them in taking good thing about it.

Pharmaceutical: BI will help these businesses in understanding the client behaviour pattern. It can help them in research and development. It'll improve communication with suppliers and vendors.

Services: BI can help in people management. This is important as in services business employees are a critical part of business success. Business Cleverness will also assist in performance management of business through benchmarking and also to enhance romantic relationship with business associates. It will also help in taking care of huge amount of data within the business. It will assist in training the employees and in knowledge management.

Advantages of BI

Listed below are a few of the features of business intelligence implementation

Single point access to data: By keeping a data warehouses and data marts, BI can act as an access to point to the info within these.

Implementation in every departments: BI can be put in place enterprise vast or it could be local to an individual department. If carried out in every departments, organizations will benefit.

Timely alternatives: BI allows users to make random requests and acquire ad hoc information as and when needed to be able to resolve problems.

Customer or centrally powered: BI can be put in place in two ways: one where records are generated according to customer needs and second where employees trigger the ventures.

Access to external users: Giving gain access to of BI systems to external users like customers who might be considering analysing their buying behaviour, can find out cost saving opportunities and suppliers can analyse the sales data.

Improve operational efficiency: By giving real time records to customers and employees, BI enables quick answers to problems and easy problem detection and correction. Hence bettering efficiency.

Reduction of delays and backlogs: BI systems allow users to create the concerns in the system and get accounts. Hence human resource can be monitored proficiently by reallocating of backlog work to other employees, thus reducing delays.

Better romance and deals with customers and suppliers: By analysing historical data we can review the past performance of the suppliers like on-time delivery, quality, etc. which can only help in negotiating with them. Understanding customer buying style will allow us to qualify some of the clients to savings or other offers in order to maintain long term relationship.

Problem detection: BI systems provide historical, real time and predictive records. This can be accessed by customers, suppliers and employees. This leads to faster diagnosis of problems or errors.

Minimize Wastage: By analysing the performance of products, customers, projects and marketing strategies, we can allocate resources correctly and minimize resource wastage.

Reduced inventory costs: BI systems supply the optimum inventory level required at all times, thus lowering cost.

Leverage investment in ERP: By utilizing BI with your existing ERP will allow non-technical users to enjoy the fruits and get customized reports.

Better Marketing Examination: BI systems supply the performance of marketing strategies or campaigns, behavior of customers and living of new opportunities.

Revenue through information: Earnings can be produced by selling information from BI to customers and suppliers.

Informed and qualified sales team: Sales force will be provided with previous sales numbers, information about clients, brands and customers thus empowering them.

Better decisions: Through reports made from BI, the decisions considered by managers will dramatically improve and you will be due to thorough analysis.

Improved inside communication: BI systems lead to improved job satisfaction, proficient work force and better determination.

Understand Customers: BI systems can be used to understand customers and improve customer experience.

Understand Rivals and Market: BI systems help mangers with home elevators latest trends in the market and the activities taken by challengers.

Guesswork Avoided: By providing carefully analysed decision supporting studies reliance on guess work is minimized.

Improved Performance: All these factors cause increased performance of business.

Future of BI

It is projected that credited to loss of information and processing systems, 35 percent of the top 5000 companies of the world will be afflicted by bad decision making.

By 2012, most of the top companies will invest almost 40 percent of the budget on employing BI.

By once the small and medium size organization will invest in business intellect systems by means of software-as- a-service (SaaS) technology. This means renting of software packages.

According to Aberdeen group, the interest in business intelligence through SaaS will increase with twice as many organizations utilizing it. It is also predicted that the product class of BI increase resulting in 22 percent gross annual upsurge in business cleverness through 2013.


In an organization, managers have an integral role in the success of operations. The managers have to take decisions that directly affect the business. A negative decision by way of a poorly up to date source will lead to devastating benefits. The decisions are taken at specific level to the organizational level

The execution of BI will increase the decisions considered by the mangers. The BI systems will in reality empower all the employees with enough information and make them with the capacity of decision making.

In an organization a lot of data is present. Data can be related to customers, suppliers, invoices, purchase requests, pay slips, staff information, sales data, financial data, training data, product data, consumer data, etc. It becomes cumbersome to control such huge amounts of ever increasing data. BI systems can make the management of these large sums of data easy by using technology like OLAP and Data Warehousing.

From this newspaper, we can conclude that the execution of Business Cleverness will result in three main

Lower Costs

Increased Revenue

Satisfied Customers

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