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The Decision Factor offers insightful comments and observations on analytics—from views on new technology approaches and market dynamics to the latest industry trends driving demand for faster, smarter information analysis. This blog contains personal views, thoughts, and opinions from SAP employees, mentors, and friends working in the area of analytics. It’s not endorsed by SAP nor does it constitute an official communication of SAP.

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What Is Business Intelligence?

What Is Business Intelligence?Early in my career, I was encouraged to always ask even the simplest and most obvious questions, including questions about well-known topics that were assumed to be understood by everyone. With that in mind, let’s answer the question, “What is business intelligence (BI)?”

As you read this post, you probably fall into one of these three categories:

  1. You know exactly what BI is because you eat, sleep, and breathe it every day. BI is in your business DNA.
  2. The term means nothing more than the name of an exotic tech cocktail that might have pierced your ears, figuratively speaking of course.
  3. You‘re somewhere in between the two extremes. You’ve been exposed to the term, but haven’t had a chance yet to fully digest it or appreciate it.

Do you have something to learn about BI? Let’s roll up our sleeves and get to work.

To begin with, BI looked very different when I started my career in the early ’90s. You couldn’t look it up on a mobile device smaller than a floppy disk. Moreover, you couldn’t Google it, Bing it, or Yahoo it. Today, the keywords “business” and “intelligence” together return more than 250 million results on Google, though few will be relevant to you, nor will you have time to go through them. Nevertheless, the ease and the speed at which you are able to query large volumes of recorded data to make faster, better-informed conclusions puts the question at hand in perspective.

Scratching the Surface

Beginners to BI should start their research with the definition. Wikipedia’s definition of BI is a good place to start, and from it you get the sense that BI includes tangibles such as hardware and software as well as intangibles such as people, culture, processes, and best practices.

Continuing on the Wikipedia page, you can find out about the origins of the term. In 1958, Hans Peter Luhn, an IBM researcher, defined the term as “the ability to apprehend the interrelationships of presented facts in such a way as to guide action towards a desired goal.” By the ‘90s, the term had become more widespread. At CIO.com, BI is defined as “an umbrella term that refers to a variety of software applications used to analyze an organization’s raw data.”

Digging Deeper

Next, you can dig a little deeper by performing what I call a rapid-research exercise to glance at the web sites of BI companies that develop the technology. In this way, your searches can transition from text-based and definition-centric explanations to visually rich and appealing presentations, including graphs and charts. This is where BI dashboards take center stage. Not surprisingly, the emphasis on mobile that showcases tablets and smart phones becomes apparent by pictures of BI artifacts shown on mobile devices. Additional references pop up for Big Data and Cloud. Both are hot technology terms that gained popularity in the last few years.

As you research and connect the dots, you can start to build your own definition of BI. This will be influenced by your own unique background, your experiences with technology (with or without BI), and, possibly, a perception layered with your biases. However, in the end, your definition of BI may still fall short.

Hitting the Core

Ultimately, BI is about decision making. In its simplest and purest form, I define BI as the framework that enables organizations of all sizes to make faster, better-informed business decisions. 

I don’t claim that this particular definition of BI is better or more comprehensive than others. But it does provide a direct and concise answer with less emphasis on technology and more focus on business, people, and decision making. 

When it comes to defining BI or technology in general, we need to put the focus on business and people more often. In this context, business decisions should be complemented by technology that promotes actionable insight, and not the other way around. BI is not a miracle pill. 

BI alone does not solve business problems or cure corporate infections. Instead, BI is the enabler that, if designed, implemented, and executed effectively, can help organizations drive growth and profitability. 

What is your definition of BI?

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