Business Intelligence In general, Business Intelligence is the key to bringing together information, people and technology to successfully manage an organization. Though advancements in the power of available technologies are never ending, technology alone cannot solve a business problem. Since Business Intelligence is a multifaceted concept lets’ examine BI from three different perspectives: a) Making better decisions faster b) Conversion of data into information c) Using a rational approach to management Making Better Decisions Faster In short, BI empowers organizations to make better decisions faster. Often the experiences, understandings and strategies that go into decision making are pretty static, that is progress very slowly. However the information is always new, that is changes rapidly and in a big way. The need for speed also applies to gaining feedback within an organization. If rapid access and turnaround of information are not available, decisions are made with either no information or stale information. The consequences of the same can be huge such a losing a key customer or producing a product which customers no longer prefer, etc. It is here that Business Intelligence pitches in. BI aids better decision making by analyzing whether actions are resulting in progress toward company objectives. Business Intelligence shouldn’t merely be used as a tool to receive plans taken and using the same to scale or measure the quality of decisions. Business Intelligence plays a major role in creation of such strategies and plansPrior to the start of the Information Age in the late 20th century, businesses had to collect data from non-automated sources. Businesses then lacked the computing resources to properly analyze the data, and as a result, companies often made business decisions primarily on the basis of intuition. As businesses started automating more and more systems, more and more data became available. However, collection remained a challenge due to a lack of infrastructure for data exchange or to incompatibilities between systems. Analysis of the data that was gathered and reports on the data sometimes took months to generate. Such reports allowed informed long-term strategic Decision-making. However, short-term tactical decision-making continued to rely on intuition. Converting Data into Information To make better decisions faster, business executives and managers need relevant and useful information. But there is often a huge gap between information that decision makers require and the mountains of data businesses collect every day. This is what is called as analysis gap. Business Intelligence access huge volumes of data and deliver relevant subsets instantly to decision makers in a form to which people can easily relate. Some call this “analysis at the speed of thought” i.e., being able to answer a question as quickly as the question is formulated. The hardest part of business intelligence is being able to what information would really be required by an organization and what indeed is not of much relevance. Using a Rational Approach to Management If Business Intelligence is incorporated it would bring in what is called as a fact - based, rational approach to making decisions. A Business Intelligence attitude would be reflected by the organization. What is this Business Intelligence attitude? Using organized methods and technologies to analyze facts Experimenting with alternate approaches and monitoring feedback on results Running the business based on the above mentioned characteristics Here address the difference between Rationality or Business Intelligenceand Science BI Life Cycle Analysis Insight action Measurement Analysis When we analyze our business how do we determine what data to collect and what analysis to perform? We do this by consciously selecting and sub consciously filtering what we think is important. This filtering is based on our basic understandings and assumptions of how our business operates. This is what is termed as the Mental Model. Mental model is the collection of everything that we know about how something works. Insight Insights come in different varieties. Operational insights, examples: Discovering the cause of price variances in a specialized commodity purchase. Strategic Insights for Example, the best way to gain cell phone subscribers is to give away the phone and charge only for the service. Visionaries of computing realized that computer chips and components were becoming so small, powerful and inexpensive that eventually everyone could own a computer, hence came the PC. Convincing others that you have a better understanding is often not that easy. What does this mean for Business Intelligence? If an individual has an important insight that has to be shared with others to be useful. Action The connection to action in the BI cycle is through the decision-making process. Action follows the better and faster decisions that Business Intelligence facilitates. Well-grounded and better-grounded decisions backed up by good analysis and insights give strength and courage to the action taker. Measurement With improved information gathering and more frequent and sometimes concurrent reporting that business intelligence brings to the table, there is greater opportunity in the organization to measure results against quantitative standards thus leading to another cycle of analysis, insight and corrective action. Enabling Business Intelligence Technology Processing Power Data Volumes Network Technologies Standards BI Software People Culture
Published: September 02, 2007
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