The Business Intelligence Revolution

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The Business Intelligence Revolution

Most companies, and even individuals, have enormous amounts of information within their reach, on bookshelves, in filing cabinets, and on their own computers as well as on the World Wide Web. The trouble with all this information is that it’s difficult to make sense of it all. In short, it’s difficult to get answers to precise questions from the mountain of generalized raw data.

The term Business Intelligence systems, often called BI systems, refers to any combination of software, hardware, and communications connections that is used to sort through the piles of available data, then analyze them in order to answer questions that are useful to a particular business or individual.

This includes measuring sales at various levels of detail, such as local, regional, or global. BI can also include tracking production costs or any other internal operating statistics. And ultimately, it means combining various permutations of internal data with external data to provide managers with the knowledge to make high-quality business decisions.

In the process, good business intelligence allows a company to improve in three key areas:

It allows executives to forecast future trends and thereby gain a competitive advantage.

It enables them to anticipate the strategic moves of competitors and develop effective responses.
It gives them the ability to paint a clearer picture of how customers are behaving in the marketplace, including spending patterns, product preferences, and future needs.

It should be obvious on the face of it that using this sort of “evidence-based decision-making” can produce far better results than gut feelings or guesswork does. And yet, until recently, guesswork was all we had. The sheer volume and complexity of data was simply too daunting for decision-makers to sift through.

However, as technical capabilities improve, the use of BI systems is spreading rapidly. A common application of BI, for example, is in supply chain management. If a business is generating strategic data about its sales patterns and volume, it can make that information available to suppliers, who can then manage their own production accordingly.

In a previous era, everyone would simply make their best estimates of what was needed in the pipeline, how much inventory to stock, and how much would eventually move out the door. It was a wasteful process that often led to unnecessary costs.

Today, numerous vendors are designing and offering tools to gather and analyze large quantities of unstructured data, such as production metrics, sales statistics, attendance reports, and customer attrition figures for almost any sector of business, from retail to financial services, and from law firms to manufacturing companies...

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