Business Intelligence

(BI)
- Compiled by UBM
Business Intelligence (BI)
• Business Intelligence (BI) can be defined as: A set of strategies,
methodologies, processes, and technologies used by organizations
to collect, analyze, and manage business data, transforming it into
actionable insights that support informed decision-making at all
levels.
Key elements of BI

•Strategies, Methodologies, Processes: BI isn't just about software; it

involves a well-thought-out approach to how an organization handles its
data, from collection to interpretation. It's about establishing best
practices for leveraging data.
•Technologies: This refers data warehouses, ETL(extract, transform and
load) tools, reporting tools, dashboards, data visualization software,
and analytical applications.
Key elements of BI
Collect, Analyze, and Manage Business Data:
• Collection: Gathering raw data from various internal (e.g.,
CRM, ERP, sales systems) and external (e.g., market data,
social media, competitor information) sources.
• Analysis: Applying various analytical techniques
(descriptive, diagnostic, and increasingly predictive and
prescriptive analytics) to uncover patterns, trends, and
anomalies within the data.
• Management: Ensuring data quality, consistency, security,
and accessibility so it's reliable for analysis. This often
involves data warehousing and data governance .
Key elements of BI
•Transforming it into Actionable Insights: BI turns data into
understandable information that reveals "what happened,"
"why it happened," and often, "what might happen next" or
"what actions to take.“

•Support Informed Decision-Making at All Levels: The

ultimate goal of BI is to empower individuals and teams
across the organization – from executives making strategic
long-term plans to operational managers making daily
adjustments – to make better, fact-based decisions, rather
than relying on intuition or guesswork.
How BI impacts managers and
decision-making:
1. Enabling Data-Driven Decisions:
•Moving beyond intuition: BI provides them with accurate, timely,
and comprehensive data, allowing them to make decisions based
on evidence and facts rather than assumptions.
•Understanding "what" and "why": BI helps managers understand
not just what is happening (e.g., sales are down), but also why it's
happening (e.g., sales are down in a specific region due to a
competitor's new product).
•Forecasting and trend identification: By analyzing historical data,
BI tools can identify patterns and trends, enabling managers to
forecast future outcomes, anticipate market changes, and identify
opportunities or risks.
How BI impacts managers and
decision-making:
2. Improving Operational Efficiency:
•Identifying bottlenecks and inefficiencies: BI can analyze operational
data to pinpoint areas where processes are slow, costly, or ineffective.
This allows managers to streamline workflows, optimize resource
allocation, and reduce waste.
•Monitoring Key Performance Indicators (KPIs): Managers can use BI
dashboards and reports to track critical KPIs in real-time, gaining
immediate insights into performance across various departments (sales,
marketing, finance, supply chain).
•Cost reduction: By identifying areas of overspending or inefficient
resource use, BI helps managers make informed decisions to reduce
costs and improve profitability.
How BI impacts managers and
decision-making:
3. Gaining Deeper Customer Insights:

•Understanding customer behavior: BI tools analyze customer data

(purchasing patterns, demographics, feedback) to provide a
comprehensive view of customer preferences and behaviors.
•Personalization and targeted strategies: Armed with customer
insights, managers can tailor products, services, and marketing
campaigns to specific customer segments, leading to increased
customer satisfaction and loyalty.
•Improving customer retention: BI can identify early signs of customer
churn, allowing managers to take proactive measures to retain valuable
customers.
How BI impacts managers and
decision-making:
4. Achieving Competitive Advantage:

•Market understanding: BI provides insights into market trends,

competitor performance, and consumer behavior, enabling businesses to
anticipate changes and adjust their strategies accordingly.

•Proactive decision-making: With a clearer understanding of the

competitive landscape, managers can make proactive decisions to gain
an edge, whether it's through product innovation, pricing strategies, or
market expansion.
How BI impacts managers and
decision-making:
5. Facilitating Strategic Planning:

•Holistic view: BI integrates data from various departments, providing a

unified and comprehensive view of the entire business operation. This
holistic perspective is crucial for strategic planning.

•Evaluating strategic initiatives: Managers can use BI to assess the

impact of strategic decisions, track progress against goals, and make
necessary adjustments.
How BI impacts managers and
decision-making:

6. Enhancing Risk Management:

•Identifying potential risks: By analyzing data, BI helps
organizations identify potential risks early on, whether they are
financial, operational, or related to compliance.
•Developing contingency plans: With foresight into potential
challenges, managers can develop and implement effective
contingency plans to mitigate risks.
How BI impacts managers and
decision-making:
Key Components of BI that Support Managers:

•Data Warehouses/Data Lakes: Centralized repositories for

storing large volumes of data from various sources.
•ETL (Extract, Transform, Load) Tools: Processes for cleaning,
transforming, and loading data into the data warehouse.
•Data Visualization Tools: Dashboards, charts, and graphs that
present complex data in an easy-to-understand visual format.
How BI impacts managers and
decision-making:
Key Components of BI that Support Managers:

•Reporting Tools: Generate customizable reports for different

levels of management.
•Ad-hoc Querying: Allows users to ask specific questions of the
data and receive immediate answers.
•Predictive Analytics: Uses statistical models and machine
learning to forecast future outcomes.
•Online Analytical Processing (OLAP): Enables fast,
interactive analysis of multi-dimensional data.
BI for Data analysis
• Business Intelligence (BI) is fundamentally about transforming raw
data into meaningful insights and presenting those insights in a way
that facilitates informed decision-making. It encompasses the entire
lifecycle from data acquisition to the final presentation of results.
BI for Data analysis
1. Data Analysis Capabilities of BI:
• BI tools are designed to make complex data analysis accessible and actionable
for business users, not just data scientists. They achieve this through:
• Data Collection and Integration:
• Connecting to Diverse Sources: BI tools can connect to a multitude of data sources,
including databases (SQL, NoSQL), cloud platforms (Azure, AWS, Google Cloud),
spreadsheets (Excel), web services, social media, CRM systems (Salesforce), ERP systems
(SAP), and more.
• Centralized Data: They often leverage data warehouses or data lakes to consolidate
disparate data, providing a single source of truth for analysis.
• ETL (Extract, Transform, Load): BI platforms incorporate ETL capabilities to extract data
from various sources, clean and transform it into a consistent format, and load it into a
data model suitable for analysis. This ensures data quality and consistency.
BI for Data analysis
2. Data Modeling:
• Organizing Data: BI tools allow users to create robust data models that define
relationships between different data tables (e.g., sales data linked to
customer data and product data). This structure is crucial for meaningful
analysis.
• Measures and Calculated Columns: Users can create custom measures (e.g.,
total sales, profit margin) and calculated columns (e.g., customer lifetime
value) using formulas (like DAX in Power BI) to derive new insights from
existing data.
BI for Data analysis
3. Descriptive Analytics ("What Happened?"):
• Historical Analysis: BI tools are excellent for analyzing past
performance, identifying trends, and understanding "what
happened." This includes:
• Trend Analysis: Visualizing sales over time, website traffic fluctuations, etc.
• Variance Analysis: Comparing actual performance against targets or previous
periods.
• Segmentation: Breaking down data by different categories (e.g., sales by
region, product, customer segment).
• Ranking: Identifying top-performing products, sales representatives, or
regions.
BI for Data analysis
4. Diagnostic Analytics ("Why Did It Happen?"):
• Drill-down and Drill-through: Users can explore data at different levels of
granularity, from high-level summaries to detailed individual transactions, to
understand the root causes of trends or anomalies.
• Filtering and Slicing: Interactive filters and slicers allow users to isolate
specific subsets of data for deeper investigation.
• Comparative Analysis: Comparing different groups or periods to identify
factors contributing to performance variations.
BI for Data analysis
5. Advanced Analytics (Emerging in BI):
• Predictive Analytics: While traditional BI focuses on descriptive
and diagnostic, modern BI tools are increasingly integrating
predictive capabilities (often powered by AI/ML) to forecast future
trends (e.g., sales forecasts, customer churn predictions).
• Prescriptive Analytics: Some advanced BI platforms can even
suggest actions to optimize outcomes based on analyzed data.
• Statistical Functions: Many BI tools offer built-in statistical
functions for more advanced analysis, such as regression,
correlation, and clustering.
Presenting Results (Data
Visualization and Reporting):
1. Interactive Dashboards:
• At-a-Glance Overview: Dashboards provide a consolidated, real-
time view of key performance indicators (KPIs) and metrics on a
single screen.
• Interactivity: Users can interact with dashboards by clicking on
elements, applying filters, and drilling down to explore underlying
data. This self-service capability empowers users to find their own
answers.
• Customization: Dashboards can be customized for different user
roles or departments, presenting only the most relevant
information.
Presenting Results (Data
Visualization and Reporting):
2. Rich Visualizations:
• Variety of Chart Types: BI tools offer a wide array of visualization
options, including:
• Bar Charts/Column Charts: For comparing categories.
• Line Charts: For showing trends over time.
• Pie Charts/Donut Charts: For illustrating proportions (use with caution for too
many categories).
• Scatter Plots: For showing relationships between two variables.
• Heatmaps/Treemaps: For visualizing hierarchical data or data density.
• Maps: For geographical data analysis.
• Gauges/KPI Cards: For displaying single metrics and their status against targets.
Presenting Results (Data
Visualization and Reporting):
•Rich Visualizations:

• Data Storytelling: Effective visualizations help tell a

compelling story with data, making it easier for audiences to
grasp insights and remember key findings.
• Formatting and Design: Tools provide extensive formatting
options to create visually appealing and easy-to-read reports,
including color schemes, fonts, and layouts.
Presenting Results (Data
Visualization and Reporting):
3. Automated Reporting:
• Scheduled Reports: BI platforms can automate the generation and
distribution of reports (e.g., weekly sales reports, monthly
financial summaries) to relevant stakeholders.
• Customizable Reports: Users can create highly customized reports
with specific data points, layouts, and branding.
• Drill-through Reports: Reports can be linked to allow users to drill
from a summary report to a more detailed one.
Presenting Results (Data
Visualization and Reporting):
4. Self-Service BI:
• Empowering Business Users: A significant benefit of modern BI is
the emphasis on self-service, allowing non-technical users to
perform their own data analysis and create reports without relying
heavily on IT or data analysts. This speeds up the decision-making
process.
• Intuitive Interfaces: Drag-and-drop interfaces and natural
language queries (in some advanced tools) make it easy for users
to manipulate and visualize data.
Presenting Results (Data
Visualization and Reporting):
5. Collaboration and Sharing:
• Centralized Platforms: BI tools often provide centralized platforms
for sharing reports and dashboards, fostering collaboration among
teams.
• Permissions and Security: Robust security features ensure that
data access and sharing are controlled based on user roles and
permissions.
Popular BI Tools for Data
Analysis and Presentation:
• Microsoft Power BI: Widely used, powerful, and integrates well with
Microsoft ecosystem.
• Tableau: Known for its strong data visualization capabilities and user-
friendly interface.
• Qlik Sense/QlikView: Offers associative data indexing for powerful
exploration.
• Google Looker Studio (formerly Google Data Studio): Free, cloud-
based, and integrates well with Google's data products.
• Sisense: Focuses on embedded analytics and AI-driven insights.