What is business intelligence? When you ask this question to the World Wide Web to get a definition of business intelligence, you end up having a lot of answers from a business intelligence sales man perspective. These answers are good starting points but many lack information on what does business intelligence really mean for you?
In their great book named Adaptive Business Intelligence, Zbigniew Michalewicz, Martin Schmidt, Matthew Michalewicz, Constantin Chiriac, gives a very good definition of business intelligence and benefit perspective.
Business Intelligence systems are “software systems and services which extracts knowledge from raw data” writes say. “A business intelligence system is responsible for collecting and digesting data, and presenting knowledge in a friendly way (thus enhancing the end-user’s ability to make good decisions)”.
Writers argue that the business managers realized data raw data and information provided by traditional enterprise information systems are not very useful if the organization has necessary tools and processes to analyse them. Business Intelligence tools fill the gap between information and knowledge. Their goal is to access and retrieve data from various sources, convert raw data to information and then knowledge and provide an easy to use graphical user interface to display these knowledge.
At this point it may be confusing for you if you do not have the clear understanding of the difference between data, information and knowledge. Data is “raw” numbers, symbols, etc. collected daily. Data is prepared into information, which is “organized data,” pre-processed, cleaned, arranged into structures, and stripped of redundancy. Knowledge on the other hand is “integrated information,” which includes facts and relationships that have been perceived, discovered, or learned.
One of the most important reasons for you to collect data, process them into information and store this information is to use it to answer questions and make decisions. And a good decision in the modern fast pace of corporate world has to satisfy two conditions to be effective: the decision needs to be right and decision needs to be on time. A timely but wrong decision does not worth so much and in many cases right but late decisions are also worthless. To have right and timely decision, you need good decision making skills and experience but also right and timely knowledge. But usually what managers have is not the knowledge, they have information and they need to spend time to convert it to knowledge before the information becomes useful for decision making. Business Intelligence system fills that gap.
So business intelligence is not an excel on steroids with better charting, reporting, slicing and dicing tool. Benefits of business intelligence goes far beyond that. A business intelligence system has an important role in the corporate MIS ecosystem: it converts information to right knowledge to enable right decisions!
By the way, the book, Adaptive Business Intelligence, actually goes beyond Business Intelligence into realm of Artificial Intelligence where the software system not only converts information into knowledge but also converts knowledge into decisions by means of Artificial Intelligence:
“Today, most business managers realize that a gap exists between having the right knowledge and making the right decision. Because this gap affects management’s ability to answer fundamental business questions (such as “What should be done to increase profits? Reduce costs? Or increase market share?”), the future of business intelligence lies in systems that can provide answers and recommendations, rather than mounds of knowledge in the form of reports. The future of business
Intelligence lies in systems that can make decisions! … While business intelligence is often defined as “a broad category of application programs and technologies for gathering, storing, analyzing, and providing access to data,” the term Adaptive Business Intelligence can be defined as “the discipline of using prediction and optimization techniques to build self-learning ‘decisioning’ systems” (as the above diagram shows). Adaptive Business Intelligence systems include elements of data mining, predictive modeling, forecasting, optimization, and adaptability, and are used by business managers to make better decisions.”
Source : Adaptive Business Intelligence - Chapter 1
It may sound futuristic but these systems exist and are successfully used by several companies. For example one such application type, Advanced Planning and Scheduling, is in the market for nearly 2 decades and used by many enterprises to drive their decision making processes. For example, 3 writers of this book, Zbigniew Michalewicz, Matthew Michalewicz and Constantin Chiriac runs a company named SolveIT Software in Australian company which provides supply & demand optimisation based on Advanced planning & scheduling, Supply chain network optimisation, Demand planning & forecasting and Predictive modelling.
In their great book named Adaptive Business Intelligence, Zbigniew Michalewicz, Martin Schmidt, Matthew Michalewicz, Constantin Chiriac, gives a very good definition of business intelligence and benefit perspective.
Business Intelligence systems are “software systems and services which extracts knowledge from raw data” writes say. “A business intelligence system is responsible for collecting and digesting data, and presenting knowledge in a friendly way (thus enhancing the end-user’s ability to make good decisions)”.
Writers argue that the business managers realized data raw data and information provided by traditional enterprise information systems are not very useful if the organization has necessary tools and processes to analyse them. Business Intelligence tools fill the gap between information and knowledge. Their goal is to access and retrieve data from various sources, convert raw data to information and then knowledge and provide an easy to use graphical user interface to display these knowledge.
At this point it may be confusing for you if you do not have the clear understanding of the difference between data, information and knowledge. Data is “raw” numbers, symbols, etc. collected daily. Data is prepared into information, which is “organized data,” pre-processed, cleaned, arranged into structures, and stripped of redundancy. Knowledge on the other hand is “integrated information,” which includes facts and relationships that have been perceived, discovered, or learned.
One of the most important reasons for you to collect data, process them into information and store this information is to use it to answer questions and make decisions. And a good decision in the modern fast pace of corporate world has to satisfy two conditions to be effective: the decision needs to be right and decision needs to be on time. A timely but wrong decision does not worth so much and in many cases right but late decisions are also worthless. To have right and timely decision, you need good decision making skills and experience but also right and timely knowledge. But usually what managers have is not the knowledge, they have information and they need to spend time to convert it to knowledge before the information becomes useful for decision making. Business Intelligence system fills that gap.
So business intelligence is not an excel on steroids with better charting, reporting, slicing and dicing tool. Benefits of business intelligence goes far beyond that. A business intelligence system has an important role in the corporate MIS ecosystem: it converts information to right knowledge to enable right decisions!
By the way, the book, Adaptive Business Intelligence, actually goes beyond Business Intelligence into realm of Artificial Intelligence where the software system not only converts information into knowledge but also converts knowledge into decisions by means of Artificial Intelligence:
“Today, most business managers realize that a gap exists between having the right knowledge and making the right decision. Because this gap affects management’s ability to answer fundamental business questions (such as “What should be done to increase profits? Reduce costs? Or increase market share?”), the future of business intelligence lies in systems that can provide answers and recommendations, rather than mounds of knowledge in the form of reports. The future of business
Intelligence lies in systems that can make decisions! … While business intelligence is often defined as “a broad category of application programs and technologies for gathering, storing, analyzing, and providing access to data,” the term Adaptive Business Intelligence can be defined as “the discipline of using prediction and optimization techniques to build self-learning ‘decisioning’ systems” (as the above diagram shows). Adaptive Business Intelligence systems include elements of data mining, predictive modeling, forecasting, optimization, and adaptability, and are used by business managers to make better decisions.”
Source : Adaptive Business Intelligence - Chapter 1
It may sound futuristic but these systems exist and are successfully used by several companies. For example one such application type, Advanced Planning and Scheduling, is in the market for nearly 2 decades and used by many enterprises to drive their decision making processes. For example, 3 writers of this book, Zbigniew Michalewicz, Matthew Michalewicz and Constantin Chiriac runs a company named SolveIT Software in Australian company which provides supply & demand optimisation based on Advanced planning & scheduling, Supply chain network optimisation, Demand planning & forecasting and Predictive modelling.
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