Understanding Business Intelligence

What is Business Intelligence?

Before jumping into the subject of BI, we need to understand a few related concepts.

Data– Every organization has data, and some has lots of data. For example an ecom site will have loads of data about search history, products viewed by customers, order details etc.

OLAP– Online Analytical Processing. It is member of BI family, that performs multidimensional analytics, calculations, trends analysis.

ETL: Another member of BI family. ETL stands for Extract, Transform and Load. So an ETL tool will perform these 3 operation on your data.

Data Mining: From heaps of data, one needs to mine the useful data, by doing some calculations, selection process etc. We can say Data mining helps us get information, which a BI tool can present in more usable form where user can slice and dice and get the desired perspective say which products are more in demand in a particular section of age group.

Big Data
: With storage getting cheaper, a lot of companies are storing as much info as possible (say log of a customer activity on an e-commerce site). Big Data techniques help us analyze the huge data. One form of analysis might be data mining on Big Data or another might be just indexing data.

Reporting: Another important feature of BI is to present the data in dynamic form, where one can view data and further slice and dice to reach relevant conclusion.

Now once we understand all the related concepts, it is easy to understand BI

“Business intelligence (BI) is an umbrella term that includes the applications, infrastructure and tools, and best practices that enable access to and analysis of information to improve and optimize decisions and performance.”


“Business Intelligence (BI) comprises the set of strategies, processes, applications, data, technologies and technical architectures which are used by enterprises[citation needed] to support the collection, data analysis, presentation and dissemination of business information.”


Club these definitions with the above concepts, we will understand that BI is not a new concept. It was always there and was being used in one form or other by companies. But with increasing data and competition, the concept has become more relevant now.

So What is BI?

The core idea is to simply use data to make good business decisions. Take the data and convert into information represented in a form which can make sense and help a Business to answer relevant questions. Which products are selling? Why people choose one product or service over another? What can we expect in future quarters or years?