What is business intelligence

Business intelligence is a general term used to refer to a number of activities a company may undertake to gather information about their market or their competitors. Some areas often included under the blanket heading of business intelligence are: competition analysis, market analysis, and industry analysis. Some people also consider industrial espionage that operates for information-gathering purposes to be a form of business intelligence.

The five key stages of Business Intelligence:

1. Data sourcing

   Business Intelligence is about extracting information from multiple sources of data. The data might be: text documents - e.g. memos or reports or email messages; photographs and images; sounds; formatted tables; web pages and URL lists. The key to data sourcing is to obtain the information in electronic form. So typical sources of data might include: scanners; digital cameras; database queries; web searches; computer file access; etcetera.

2. Data analysis

   Business Intelligence is about synthesizing useful knowledge from collections of data. It is about estimating current trends, integrating and summarising disparate information, validating models of understanding, and predicting missing information or future trends. This process of data analysis is also called data mining or knowledge discovery. Typical analysis tools might use:-

   • probability theory - e.g. classification, clustering and Bayesian networks; 
   • statistical methods - e.g. regression; 
   • operations research - e.g. queuing and scheduling; 
   • artificial intelligence - e.g. neural networks and fuzzy logic.

    

3. Situation awareness     Business Intelligence is about filtering out irrelevant information, and setting the remaining information in the context of the business and its environment. The user needs the key items of information relevant to his or her needs, and summaries that are syntheses of all the relevant data (market forces, government policy etc.).  Situation awareness is the grasp of  the context in which to understand and make decisions.  Algorithms for situation assessment provide such syntheses automatically.

4. Risk assessment     Business Intelligence is about discovering what plausible actions might be taken, or decisions made, at different times. It is about helping you weigh up the current and future risk, cost or benefit of taking one action over another, or making one decision versus another. It is about inferring and summarising your best options or choices.

5. Decision support

   Business Intelligence is about using information wisely.  It aims to provide warning you of important events, such as takeovers, market changes, and poor staff performance, so that you can take preventative steps. It seeks to help you analyse and make better business decisions, to improve sales or customer satisfaction or staff morale. It presents the