The Role of Business Intelligence

Jeralyn • October 25, 2023

What is Business Intelligence (BI)?

Business intelligence processes include collecting data, creating models, analyzing the data with queries, creating data visualizations such as charts, and producing reports to be used by business decision-makers. BI processes can be applied to both operational and strategic decisions.
BI tools allow an organization to make decisions that are guided not just by anecdote or a small collection of data, but with a complete picture of data. In this article, we will cover in detail what business intelligence means, how it can support a business, and what aspects to look for in business intelligence tools for your own organization.
The purpose of business intelligence is to produce information that facilitates optimal business decisions that can improve operational efficiency and profitability for a business and provide it with a competitive edge in the marketplace. Business intelligence processes can provide historical, current, and future forecast information related to business operations.

Execution of a successful business intelligence strategy requires a strong organization of how data is used from start to finish:

Data collection: A business needs to understand where they can collect data from visitors and customers, and how they can be organized into a form that can be analyzed.
Data storage: Data relevant to businesses are numerous and often large in scope. In order to be useful, that data must be stored in a place that data stakeholders can reliably access, such as in a SQL database. A storage solution should always be up-to-date so that a company can act on changes in data quickly.
Data analysis: The core of business intelligence is focused on descriptive and diagnostic analytics, which answers questions of where your company has been, where it is now, and why things are the way they are now. BI tools need to be able to draw from data storage to conduct these different types of analyses.
Data reporting: All of our data and analyses will do no good if they do not reach decision makers and other stakeholders. BI should convey data and insights in ways that people with less context can still quickly understand and use them to make decisions.

In order to execute these steps, multiple tools and products need to be employed. There are two subsets of tools to consider here.

BI Jobs and Roles

Data engineers

Data engineers source the data to be analyzed, organize it, and create channels and automatic data feed processes to transport the data between various database systems. They are also typically responsible for arranging data storage by creating data warehouses and for data security and integrity as it moves between systems.
Data engineers must possess a broad range of skills, such as being familiar with working in programming languages such as SQL and Python, knowing how to create databases, using ETL (Extract, Transfer, Load) tools, and creating algorithms for data analysis.
Data engineers must be skilled in using programs such as Spark or Hadoop, which assist in the organization and utilization of big data. They must also be able to use programs such as Kafka and Pubsub, which are used for integrated streaming, real-time data into existing databases.

Data analysts

Data analysts are primarily responsible for creating models and metrics for doing data analysis. Analysts import data from various sources, such as Excel files and databases, and then organize the data into usable formats for running data analysis. Their next task is to create data analysis models, which often involves combining related data that may exist in the form of separate tables.
Data analysts also create automatic refreshing tools that can update data in real-time. In addition, they create formulas for measuring performance, such as KPIs. Finally, they document their work so that other analysts or end-users of the data can easily interpret the data analysis models.

Data visualization specialists

A data visualization specialist creates visuals and dashboards that help business leaders identify key issues and take appropriate action to resolve them. In order to accomplish this, data visualization specialists often create visual representations to highlight key metrics, figures, or trends identified by data analysis.
Data visualization specialists need to possess many of the same technical skills as data analysts. They usually possess advanced expertise in using Excel, Tableau, Power Pivot, and Power BI.

Data collection and storage are important parts of the BI process, they generally aren’t what people think of when it comes to business intelligence. The efforts put into this part of an organization’s data strategy can serve not just their business intelligence needs, but other parts of their data analytics plans. Instead, the strategies used by a business to collect and store data are often known as the data pipeline. The tools used in the data pipeline will fall under the label of data engineering.

Other tools are used to analyze and report on data; these are the products that are referred to as business intelligence tools. Setting up these BI tools allow you to connect to and query data repositories in order to analyze the data. They let you create visualizations and dashboards that are easy to read and understand. Good BI tools let you generate and send out reports to stakeholders so they can monitor performance indicators at a high level.

Business intelligence is often characterized as concerned with the descriptive and diagnostic levels of analysis. That is, BI tries to address questions of what has previously happened, what is the current state of things, and why the observed pattern in the metrics came to be.
Business analytics, on the other hand, is concerned with predictive and prescriptive analytics. This type of analysis is concerned with predicting what will happen next, or what a company should be doing next. Performing BA tends to be a more specialized pursuit, since it requires a good descriptive and diagnostic foundation that comes from BI.

The overall objective of business intelligence is to allow a business to make informed decisions. A company with a working BI strategy will have data that is accurate, complete, and organized. Business intelligence can be used to show historic patterns to help stakeholders gauge the health of their organization, alerting them to problems as well as potential improvements.