Business intelligence

Definition and Tools of Business Intelligence

Business intelligence is defined as the set of tools and technology that allow end users to quickly and easily access and analyze information to make business decisions to improve company performance.

Business intelligence is a business strategy that aims to increase the performance of the company or the competitiveness of the business, intelligently organizing its historical data (transactions or daily operations), usually residing in a corporate Data Warehouse.

The concept of business intelligence was introduced in the mid-1960s and since then it has not stopped evolving into more effective solutions adapted to the new prevailing technological environment and the needs of the company. Thanks to the increasingly cheaper hardware and software, the creation of much more powerful processors, the hegemony of the Internet-Web and more efficient management software, the concept of business intelligence (BI) is placed within the reach of many modern organizations who are interested in maximizing their investments in the IT area.

It all started with DSS (Decision Support Systems), then similar concepts such as EIS (Executive Information Systems) appeared, until reaching the current state of the art, BIs and BI-Web. 

In this article we will review the concepts related to business intelligence and its applications.

What is business intelligence?

Business intelligence is called the ability of companies to transform data into information and at the same time information into knowledge, in order to help decision-making. Business intelligence, also known as Business intelligence, is a set of processes and technologies that allow everyone in the organization to access the data necessary to obtain valid and useful information.

Business intelligence can be defined as the set of methodologies, applications and technologies that allow gathering, purifying and transforming data from transactional systems and unstructured information (internal and external to the company) into structured information, for direct exploitation (reporting, OLTP / OLAP analysis, alerts …) or for its analysis and conversion into knowledge, thus supporting business decision making.

Business Intelligence (Knowledge, Information, Data)

If a company makes good use of business intelligence, it can serve as a strategic factor that turns it into a potential competitive advantage, in order to provide privileged information to respond to business problems: entering new markets, promotions or product offers, elimination of information islands, financial control, cost optimization, production planning, analysis of customer profiles, profitability of a specific product, etc … (Sinnexus, nd)

Business intelligence integrates the data of the entire company in a single warehouse from where users can make any type of query to extract and analyze existing data. Which means that the goal of business intelligence is to preserve data so that end users can access it and make decisions based on their analysis. Business intelligence alone is not useful if the people who have access to the data do not make good use and analysis of it to make the right decisions. (Petrovic, 2008)

Data and information

A piece of information refers to the symbolic representation of an entity that by itself has neither value nor meaning and neither does it have any effect on the person who receives it. However, if you process it properly, it can provide important information that helps with decision making. Data can be associated and grouped with other data in the same context to offer a meaning and useful message to the person receiving it. Examples of data are numbers, letters of the alphabet, drawings, points, etc … (Izamorar, sf)

On the other hand, the set of organized data that transmits meaning in order to reduce uncertainty and increase knowledge is called information. The information is made up of a group of supervised and ordered data, which helps to build a message based on a certain topic. Information helps to solve problems since it allows adequate decision-making.

able 1if erence between data and information
They are a symbolic representationProcessed and organized data set
They have no semantic senseIt has a meaning
They do not convey a message on their ownGet a message
Describe facts and situationsHelp solve problems

Business intelligence tools

Business intelligence has its origin in information systems whose purpose was to collect information on a certain topic to make decisions. With the emergence of new software and hardware, organizations are computerized and information systems began to support the basic processes of the company such as sales, production, human resources and others which are called Information systems for management. . Over time and after the need for companies to have a basis that helps them make decisions, tools emerged that met these needs called DSS (Decision support system) such as EIS and OLAP as well as the different technical mining tools. of data.

EIS (Executive information systems) are a set of tools and information systems that allow company executives to have access to the status of activities and their management. They allow to immediately report any change that occurs in the company, for this it analyzes the daily status of the organization through key indicators. The type of information that is regularly requested is usually weekly sales, partial balances and the level of stocks, and at the same time it is represented by graphs in spreadsheets. (Perez Lopez & Santín González, 2007)

OLAPs (Online analytical processing) provide ease of handling and transforming data to produce new data. The objective of OLAP is to speed up the query of large amounts of data.

Data mining tools aim to extract patterns and trends in order to predict future behavior. Data mining analyzes the data while OLAP and EIS facilitate access to information so that a more effective analysis can be done, which means that they support data mining.

The use of each tool will depend on the objective of the organization, for this it must start from a basic question, as we can see in the following table: (Braga, Valencia, & Carvajal, 2009)

Business Intelligence Tools

For the aforementioned systems to work, it is necessary that there is a data warehouse or Warehouse which is a collection of internal or external historical data, which describes a context or study area oriented towards a domain that allows applying tools in order to to describe, summarize, and analyze data to aid decision-making.

To load or feed the data, a system called ETL (Extraction, transformation, Load) is used, which is responsible for reading the data, incorporating new data, creating keys, etc. The following image explains how these systems work. 

Introduction to data mining

Using BI business intelligence

Business intelligence provides managers with the information they need to know what is happening in the market. The type of information for this is:

  • Follow up local, national or international sales according to their presence in the market
  • Tracking expenses and if they are according to a previously established budget
  • If the sales are according to the projections made

By measuring any aspect of the company using business intelligence, it is possible to detect if the plan is not being fulfilled or if the measurements are outside the established limits and then investigate the causes and take the respective measures. Timely access to information, especially when there are unexpected changes, allows managers to implement changes almost immediately to avoid long-term consequences. In other words, if business intelligence is used efficiently, it can contribute to improving company performance. For this, it must make use of management indicators such as income, profitability, service costs, etc.

Business intelligence can help companies keep track of campaigns created to attract new customers or increase sales; If it is detected early that this campaign is not giving the desired results, millions of dollars can be saved by withdrawing on time. This is done by tracking sales and customer feedback. In the accounting area, business intelligence can be used to reduce the number of delinquent accounts to be paid by identifying delinquent clients. It can also help to identify the performance of a plant.

But for business intelligence to be effective, it is not enough only to have the necessary technology and information, it is vitally important that the people who are going to use it have the ability to make decisions that are in favor of the company. . Which means that business intelligence is not in itself a solution, in reality, what is going to improve the performance of the company is the ability of its managers and directors to make decisions based on business intelligence.

Business intelligence also plays a very important role in the daily activities of the company, since access to detailed information and you will see it in a timely manner can be vital for the accomplishment of a specific task. Among the cases in which business intelligence is used for the day-to-day operations of the company are:

  • Travel agencies use business intelligence to monitor flights in order to detect any type of delay and re-accommodate the passengers on a new flight.
  • In hospitals, business intelligence can be used to detect staffing needs at peak hours
  • In restaurants, business intelligence can help detect waiting time at tables according to the number of people attending and the time it takes to eat.
  • The Walt Disney World’s magic kingdom park uses business intelligence to know the waiting time to get on the games and in this way control the sale of tickets in order to avoid long lines.

Business intelligence is also of great help to improve company processes, this by identifying possible delays in daily operation before the client detects it. This can prevent the problem from reaching the customer and making a complaint. Business intelligence in processes can be applied as follows:

  • In a mail company dedicated to the collection and delivery of courier packages, workers can monitor packages and letters every hour in order to identify if there are any delays and make the respective changes. This also allows them to inform the customer about the progress of their delivery.
  • It also allows detecting the delivery of the billing once the service has been provided in order to identify if there are delays and improve the situation.

On the other hand, business intelligence tools can help improve the customer service process by efficiently managing orders, speeding up loans and other activities that directly affect customer satisfaction. Among the examples of companies that use business intelligence to manage their customer service are:

  • The Whirlpool company applies business intelligence to manage the warranties of its products, thus improving customer satisfaction.
  • Continental Airlines applies business intelligence to detect how full business class cabins are and ensure that the most valuable customers have access to them depending on available seats

Finally, companies apply business intelligence to detect new business opportunities, such as knowing what kind of needs customers have that complement the service they provide. (Howson, 2009)


Business intelligence is a set of tools and techniques whose purpose is to analyze the information that the company has collected in its day to day in a historical way to make decisions that allow it to improve its performance. It is very useful at the commercial level, at the process level and in the customer service area. Business intelligence alone does not offer any solution, only the ability of the people who are part of the company to use the information that is extracted to make correct decisions is what will determine the true value of the use of intelligence of business.

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