Is your company using business intelligence software and systems to give you a competitive edge? If you are a very small business, it probably doesn’t make sense. But if your company is larger, perhaps you should consider…

Business Intelligence (BI) generally refers to technologies that are used to analyze and provide strategic intelligence about the operations of a business. Larger companies have vast amounts of data available to them. And with competitive pressures in today’s markets, businesses need to utilize company data to understand their business and stay competitive.

Production data, demographic information, sales figures and the like can be synthesized into a form useful for making better strategic business decisions. For example, a business intelligence system could aggregate sales numbers by month and year and compare current figures to historical values. These aggregated sales figures could then be displayed in a simple tabular format (Excel, PDF, or HTML) and/or converted into graphical representations (charts, graphs, gauges, dial indicators, etc.). The synthesized data could then be displayed on a simple report in the form of a dashboard (analogous to a dashboard on a car or airplane) that shows all of that data in an easy to read, intuitive format.

Business intelligence (BI) uses many data related technologies. Data warehouses, document management, knowledge management, data mining, online analytical processing (OLAP), multidimensional analysis (based on creating n-dimensional data cubes) to name a few. Because today’s companies have so many divergent computer systems and applications, it is usually a complex task to aggregate data from so many varying sources. Creating BI systems often ends up being much more complex than original estimates.

Business intelligence is a relatively new technology. Because of the dependence of BI technologies on databases, data warehouses and related computer technologies, BI has not been possible till recently. It was in 1989 that Howard Dresner of the Gartner Group helped to popularize the term business intelligence.

Currently, the largest vendor of business intelligence software is Business Objects SA. Business Objects SA is a French company (NASDAQ: BOBJ) which was founded in 1991. The company claims to have over 40,000 customers worldwide. Like many of the larger software environments, there are a number of Business Objects consultants specialize in the product.

Creating a good business intelligence system (using Business Objects or any other BI package) often requires determining key performance indicators (KPI) for a given business. KPIs are metrics, either financial or non-financial, that are good indicators of the performance of a company. Domain or market knowledge as well as an understanding of the particular company are usually required to determine key performance indicators.

The objective of a business intelligence report is to present actionable information in as simple of a form as possible. Useful reports often aggregate an enormous amount of data into simple tables and charts. Before becoming a report (in a simplified example), systems have aggregated operational data into a data warehouse using extract, transform, and load (ETL) processes. Then BI software has analyzed data contained in the warehouse to build that report. Users of the reports are often clueless as to the processes and data crunching that was required to generate the report. That is an indicator of a good business intelligence system… reporting that is deceptive simple.