Definition: Business intelligence (BI) works to simplify information discovery and analysis, thereby making it possible for decision-makers at all levels of an organization to more easily access, understand, analyze, collaborate, and act on information, anytime and anywhere. This definition here demonstrates that traditional analyst-driven Business Intelligence applications have evolved to include multiple initiatives to measure, manage, and improve on the performance of individuals, processes, teams, and business units as a whole.

Business intelligence (BI) is generally said to have two basic different meanings related to the use of the term intelligence. The primary and the less frequent one is the human intelligence capacity applied in business affairs/activities. Business Intelligence is a new field of the investigation of the application of human cognitive faculties and artificial intelligence technologies to the management and decision support in different business problems. The second one basically relates to the intelligence as information valued for its currency and relevance. It is expert information, knowledge and technologies efficient in the management of organizational and individual business.


The various components of business intelligence include:

  • On-line analytical processing (OLAP): It usually refers to the way in which business users can slice their way through data using sophisticated tools that allow for navigation of dimensions such as time or hierarchies.
  • Corporate Performance Management: It usually provides a container for several pieces to plug into so that the aggregate tells a story. For example a balanced scorecard that displays port-lets for financial metrics combined with say organizational learning and growth metrics.
  • Advanced Analytics: Referred to as data mining this takes advantage of statistical analysis techniques to predict certainty measures on fats.
  • Data Sources: These can be operational databases, historical data, external data etc. They can also reside on many different platforms and can contain structured information, such as tables or spreadsheets such as plaintext files or pictures and other multimedia information.
  • Real time Business Intelligence: This allows for the real time distribution of metrics through email, messaging systems or interactive displays.
  • Data Warehouse and data marts: It supports the physical propagation of data by handling the numerous enterprise records for integration cleansing, aggregation and query tasks.


Business intelligence provides innumerable benefits to companies by eliminating a lot of guesswork within an organization, enhancing communication among departments while coordinating various activities, and enable companies to respond quickly to changes in financial conditions, customer preferences and supply chain operations.

Information is often regarded as the second most valuable resource of a company after its employees. Thus a company capable of making decisions on timely and accurate information can surely improve its performance. It also expedites decision making, as acting quickly and correctly on information before competing business do can often result in competitively superior performance. It can also help in improving customer experience, allowing for the timely and appropriate response to customer problems.

Few of the basic advantages of BI as recognized by various firms are listed below:

  • With BI, organizations can identify their most profitable customers and the underlying reasons for the loyalty of those customers as well as identify future customers with comparable potential.
  • Money laundering criminal activities can be discovered.
  • Better analysis of click-stream data to improve e-commerce strategies.
  • Speedy detection of warranty-reported problems to minimize the impact of product design deficiencies.
  • Analysis of potential growth customer profitability and reduce risk exposure through more accurate financial credit scoring of their customers.
  • Determine what combinations of products and service line customers are likely to purchase and when to do so.
  • Employees can also easily convert their business knowledge via the analytical intelligence to solve many business issues, like increase response rates from direct mail, telephone, e-mail and internet delivered marketing campaigns.
  • Detection and determination of fraudulent behavior, such as from usage spikes when credit or phone cards are stolen.
  • Determine with attrition and churn analysis why customers leave for competitors and become customers.