Business intelligence

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Business intelligence (BI) consists of strategies and technologies used by enterprises for the data analysis and management of business information.[1] Common functions of BI technologies include reporting, online analytical processing, analytics, dashboard development, data mining, process mining, complex event processing, business performance management, benchmarking, text mining, predictive analytics, and prescriptive analytics.

BI tools can handle large amounts of structured and sometimes unstructured data to help organisations to identify, develop, and otherwise create new strategic business opportunities. They aim to allow for the easy interpretation of these big data. Identifying new opportunities and implementing an effective strategy based on insights can provide businesses with a competitive market advantage and long-term stability, and help them take strategic decisions.[2]

Business intelligence can be used by enterprises to support a wide range of business decisions ranging from operational to strategic. Basic operating decisions include product positioning or pricing. Strategic business decisions involve priorities, goals, and directions at the broadest level. In all cases, BI is most effective when it combines data derived from the market in which a company operates (external data) with data from company sources internal to the business such as financial and operations data (internal data). When combined, external and internal data can provide a complete picture which, in effect, creates an "intelligence" that cannot be derived from any singular set of data.[3]

Among myriad uses, business intelligence tools empower organizations to gain insight into new markets, to assess demand and suitability of products and services for different market segments, and to gauge the impact of marketing efforts.[4]

BI applications use data gathered from a data warehouse (DW) or from a data mart, and the concepts of BI and DW combine as "BI/DW"[5]

or as "BIDW". A data warehouse contains a copy of analytical data that facilitates decision support.


The earliest known use of the term business intelligence is in Richard Millar Devens' Cyclopædia of Commercial and Business Anecdotes (1865). Devens used the term to describe how the banker Sir Henry Furnese gained profit by receiving and acting upon information about his environment, prior to his competitors:

Throughout Holland, Flanders, France, and Germany, he maintained a complete and perfect train of business intelligence. The news of the many battles fought was thus received first by him, and the fall of Namur added to his profits, owing to his early receipt of the news.

— Devens, p. 210

The ability to collect and react accordingly based on the information retrieved, Devens says, is central to business intelligence.[6]

When Hans Peter Luhn, a researcher at IBM, used the term business intelligence in an article published in 1958, he employed the Webster's Dictionary definition of intelligence: "the ability to apprehend the interrelationships of presented facts in such a way as to guide action towards a desired goal."[7]

In 1989, Howard Dresner (later a Gartner analyst) proposed business intelligence as an umbrella term to describe "concepts and methods to improve business decision making by using fact-based support systems."[8] It was not until the late 1990s that this usage was widespread.[9]


According to Solomon Negash and Paul Gray, business intelligence (BI) can be defined as systems that combine:

with analysis to evaluate complex corporate and competitive information for presentation to planners and decision makers, with the objective of improving the timeliness and the quality of the input to the decision process."[10]

According to Forrester Research, business intelligence is "a set of methodologies, processes, architectures, and technologies that transform raw data into meaningful and useful information used to enable more effective strategic, tactical, and operational insights and decision-making."[11] Under this definition, business intelligence encompasses information management (data integration, data quality, data warehousing, master-data management, text- and content-analytics, et al.). Therefore, Forrester refers to data preparation and data usage as two separate but closely linked segments of the business-intelligence architectural stack.

Some elements of business intelligence are:[citation needed]

Forrester distinguishes this from the business-intelligence market, which is "just the top layers of the BI architectural stack, such as reporting, analytics, and dashboards."[12]

Compared with competitive intelligence

Though the term business intelligence is sometimes a synonym for competitive intelligence (because they both support decision making), BI uses technologies, processes, and applications to analyze mostly internal, structured data and business processes while competitive intelligence gathers, analyzes, and disseminates information with a topical focus on company competitors. If understood broadly, competitive intelligence can be considered as a subset of business intelligence.[13]

Compared with business analytics

Business intelligence and business analytics are sometimes used interchangeably, but there are alternate definitions.[14] Thomas Davenport, professor of information technology and management at Babson College argues that business intelligence should be divided into querying, reporting, Online analytical processing (OLAP), an "alerts" tool, and business analytics. In this definition, business analytics is the subset of BI focusing on statistics, prediction, and optimization, rather than the reporting functionality.[15]

Unstructured data

Business operations can generate a very large amount of data in the form of e-mails, memos, notes from call-centers, news, user groups, chats, reports, web-pages, presentations, image-files, video-files, and marketing material. According to Merrill Lynch, more than 85% of all business information exists in these forms; a company might only use such a document a single time.[16] Because of the way it is produced and stored, this information is either unstructured or semi-structured.

The management of semi-structured data is an unsolved problem in the information technology industry.[17] According to projections from Gartner (2003), white-collar workers spend 30–40% of their time searching, finding, and assessing unstructured data. BI uses both structured and unstructured data. The former is easy to search, and the latter contains a large quantity of the information needed for analysis and decision-making.[17][18] Because of the difficulty of properly searching, finding, and assessing unstructured or semi-structured data, organizations may not draw upon these vast reservoirs of information, which could influence a particular decision, task, or project. This can ultimately lead to poorly informed decision-making.[16]

Therefore, when designing a business intelligence/DW-solution, the specific problems associated with semi-structured and unstructured data must be accommodated for as well as those for the structured data.

Limitations of semi-structured and unstructured data

There are several challenges to developing BI with semi-structured data. According to Inmon & Nesavich,[19] some of those are:

  • Physically accessing unstructured textual data – unstructured data is stored in a huge variety of formats.
  • Terminology – Among researchers and analysts, there is a need to develop standardized terminology.
  • Volume of data – As stated earlier, up to 85% of all data exists as semi-structured data. Couple that with the need for word-to-word and semantic analysis.
  • Searchability of unstructured textual data – A simple search on some data, e.g. apple, results in links where there is a reference to that precise search term. (Inmon & Nesavich, 2008)[19] gives an example: "a search is made on the term felony. In a simple search, the term felony is used, and everywhere there is a reference to felony, a hit to an unstructured document is made. But a simple search is crude. It does not find references to crime, arson, murder, embezzlement, vehicular homicide, and such, even though these crimes are types of felonies".


To solve problems with searchability and assessment of data, it is necessary to know something about the content. This can be done by adding context through the use of metadata.[16][needs independent confirmation] Many systems already capture some metadata (e.g. filename, author, size, etc.), but more useful would be metadata about the actual content – e.g. summaries, topics, people, or companies mentioned. Two technologies designed for generating metadata about content are automatic categorization and information extraction.


Business intelligence can be applied to the following business purposes:


Some common technical roles for business intelligence developers are:[22]


In a 2013 report, Gartner categorized business intelligence vendors as either an independent "pure-play" vendor or a consolidated "mega-vendor".[23][non-primary source needed] In 2019, the BI market was shaken within Europe for the new legislation of GDPR (General Data Protection Regulation) which puts the responsibility of data collection and storage onto the data user with strict laws in place to make sure the data is compliant. Growth within Europe has steadily increased since May 2019 when GDPR was brought. The legislation refocused companies to look at their own data from a compliance perspective but also revealed future opportunities using personalization and external BI providers to increase market share.[24][permanent dead link]

See also


  1. ^ Dedić N. & Stanier noC. (2016). "Measuring the Success of Changes to Existing Business Intelligence Solutions to Improve Business Intelligence Reporting" (PDF). Measuring the Success of Changes to Existing Business Intelligence Solutions to Improve Business Intelligence Reporting. Lecture Notes in Business Information Processing. Vol. 268. Springer International Publishing. pp. 225–236. doi:10.1007/978-3-319-49944-4_17. ISBN 978-3-319-49943-7. S2CID 30910248. Closed access icon
  2. ^ (Rud, Olivia (2009). Business Intelligence Success Factors: Tools for Aligning Your Business in the Global Economy. Hoboken, N.J.: Wiley & Sons. ISBN 978-0-470-39240-9.)
  3. ^ Coker, Frank (2014). Pulse: Understanding the Vital Signs of Your Business. Ambient Light Publishing. pp. 41–42. ISBN 978-0-9893086-0-1.
  4. ^ Chugh, R. & Grandhi, S. (2013,). "Why Business Intelligence? Significance of Business Intelligence tools and integrating BI governance with corporate governance". International Journal of E-Entrepreneurship and Innovation', vol. 4, no.2, pp. 1–14.
  5. ^ Golden, Bernard (2013). Amazon Web Services For Dummies. John Wiley & Sons. p. 234. ISBN 9781118652268. Retrieved 6 July 2014. [...] traditional business intelligence or data warehousing tools (the terms are used so interchangeably that they're often referred to as BI/DW) are extremely expensive [...]
  6. ^ Miller Devens, Richard (1865). Cyclopaedia of Commercial and Business Anecdotes; Comprising Interesting Reminiscences and Facts, Remarkable Traits and Humors of Merchants, Traders, Bankers Etc. in All Ages and Countries. D. Appleton and company. p. 210. Retrieved 15 February 2014. business intelligence.
  7. ^ Luhn, H. P. (1958). "A Business Intelligence System" (PDF). IBM Journal of Research and Development. 2 (4): 314–319. doi:10.1147/rd.24.0314. Archived from the original (PDF) on 13 September 2008.
  8. ^ D. J. Power (10 March 2007). "A Brief History of Decision Support Systems, version 4.0". DSSResources.COM. Retrieved 10 July 2008.
  9. ^ Power, D. J. "A Brief History of Decision Support Systems". Retrieved 1 November 2010.
  10. ^ Springer-Verlag Berlin Heidelberg, Springer-Verlag Berlin Heidelberg (21 November 2008). Topic Overview: Business Intelligence. doi:10.1007/978-3-540-48716-6. ISBN 978-3-540-48715-9.
  11. ^ Evelson, Boris (21 November 2008). "Topic Overview: Business Intelligence".
  12. ^ Evelson, Boris (29 April 2010). "Want to know what Forrester's lead data analysts are thinking about BI and the data domain?". Archived from the original on 6 August 2016. Retrieved 4 November 2010.
  13. ^ Kobielus, James (30 April 2010). "What's Not BI? Oh, Don't Get Me Started... Oops Too Late... Here Goes..." Archived from the original on 7 May 2010. Retrieved 4 November 2010. "Business" intelligence is a non-domain-specific catchall for all the types of analytic data that can be delivered to users in reports, dashboards, and the like. When you specify the subject domain for this intelligence, then you can refer to "competitive intelligence", "market intelligence", "social intelligence", "financial intelligence", "HR intelligence", "supply chain intelligence", and the like.
  14. ^ "Business Analytics vs Business Intelligence?". 9 March 2011. Retrieved 15 June 2014.
  15. ^ Henschen, Doug (4 January 2010). "Analytics at Work: Q&A with Tom Davenport" (Interview). Archived from the original on 3 April 2012. Retrieved 26 September 2011.
  16. ^ a b c Rao, R. (2003). "From unstructured data to actionable intelligence" (PDF). IT Professional. 5 (6): 29–35. doi:10.1109/MITP.2003.1254966.
  17. ^ a b Blumberg, R. & S. Atre (2003). "The Problem with Unstructured Data" (PDF). DM Review: 42–46. Archived from the original (PDF) on 25 January 2011.
  18. ^ Negash, S (2004). "Business Intelligence". Communications of the Association for Information Systems. 13: 177–195. doi:10.17705/1CAIS.01315.
  19. ^ a b Inmon, B. & A. Nesavich, "Unstructured Textual Data in the Organization" from "Managing Unstructured data in the organization", Prentice Hall 2008, pp. 1–13
  20. ^ a b c d Feldman, D.; Himmelstein, J. (2013). Developing Business Intelligence Apps for SharePoint. O'Reilly Media, Inc. pp. 140–1. ISBN 9781449324681. Retrieved 8 May 2018.
  21. ^ Moro, Sérgio; Cortez, Paulo; Rita, Paulo (February 2015). "Business intelligence in banking: A literature analysis from 2002 to 2013 using text mining and latent Dirichlet allocation". Expert Systems with Applications. 42 (3): 1314–1324. doi:10.1016/j.eswa.2014.09.024. hdl:10071/8522. S2CID 15595226.
  22. ^ Roles in data - Learn | Microsoft Docs
  23. ^ Andrew Brust (14 February 2013). "Gartner releases 2013 BI Magic Quadrant". ZDNet. Retrieved 21 August 2013.
  24. ^ SaaS BI growth will soar in 2010 | Cloud Computing. InfoWorld (1 February 2010). Retrieved 17 January 2012.


  • Ralph Kimball et al. "The Data warehouse Lifecycle Toolkit" (2nd ed.) Wiley ISBN 0-470-47957-4
  • Peter Rausch, Alaa Sheta, Aladdin Ayesh : Business Intelligence and Performance Management: Theory, Systems, and Industrial Applications, Springer Verlag U.K., 2013, ISBN 978-1-4471-4865-4.
  • Munoz, J.M. (2017). Global Business Intelligence. Routledge : UK. ISBN 978-1-1382-03686
  • Chaudhuri, Surajit; Dayal, Umeshwar; Narasayya, Vivek (August 2011). "An Overview of Business Intelligence Technology". Communications of the ACM. 54 (8): 88–98. doi:10.1145/1978542.1978562. S2CID 13843514.


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