[Solution]Business intelligence (BI) is a technology-driven process for analyzing data

Business Intelligence Literature Review   Introduction             Business intelligence (BI) is a technology-driven process for analyzing data and presenting actionable information to aid business managers,…

Business Intelligence
Literature Review  
            Business intelligence (BI) is a technology-driven process for analyzing data and presenting actionable information to aid business managers, corporate executives, and end-users make informed business decisions. It encompasses a variety of applications, methodologies, and tools that enable companies and organizations to collect data from external and internal sources, prepare it for analysis purposes, develop and run queries against data, and create dashboards, reports, and data visualizations. Analytical results are made available to organizational decision makers and operational workers (Bielski, 2007). The recent years have seen more and more companies embrace the use of business intelligence tools to enhance their performances in the market. For instance, they take advantage of the same to gather the important information integral to effective decision making. Different scholars widely research business intelligence. Most of them focus on the practical tools used to capture and analyze business data. Others emphasize the importance of business intelligence to business success (Airinei & Berta, 2012).
Business Intelligence Tools and Benefits
            Consistent with King and Rigby (2005), there are various categories of business intelligence. This includes spreadsheets, reporting and querying software, digital dashboards, online analytical processing (OLAP), and data mining. Other types include process visualization, data warehousing, and local information systems. Different companies take advantage of different tools. However, some use the same applications. Normally, the choice of a business intelligence category is largely dependent on the type of business and its vision or goals (Groom & David, 2012). In essence, the management of a company picks on a tool that is best suited for its operations. Selecting the wrong tool or application can result in the collection of erroneous data, hence the business question may not benefit from the same. Managers ensure they determine information needs and how to best access the same before deciding which application to implement. In the same regard, there are those that apply more than one tool (Garza, 2013). This is common among large and well-established firms considering they require more data as compared to average companies. In general, large companies need more information to ensure their continued success in the market. With this being the case, they cannot rely on one tool (Al-Zubi, Shaban, & Samih Alnaser, 2014).
According to Shachmurove (2008), different business intelligence tools serve different purposes. For example, there are those used to retrieve data while others are utilized to transform the same into actionable information. On the contrary, other tools are used to collect, modify, and report data. Such tools are sophisticated, hence challenging to handle. However, businesses prefer them as they help in handling different tasks associated with business intelligence (Stalcup, 2003). All in all, it is essential for the management in an organization to select a tool that matches its operations and can be relied upon to achieve the best results. Businesses are advised against working under the assumption that just because a tool is applied to another company and deemed effective, it will also be used in their case. Principally, this can make it challenging for the company to retrieve and transform the right data integral for informed decision-making process (Stalinski, 2013). As such, this can have an adverse impact on business success. For instance, the management can rely on the wrong information to make strategic decisions. As such, the risk of failure is increased considering the unavailable of the right information. Nevertheless, this is an issue that can be solved through the management determining the information needs of their company as well as the most useful tool to acquire and convert the same into actionable facts (Al-Zubi, Shaban, & Samih Alnaser, 2014).
Airinei and Berta (2012) are of the view that BI programs also integrate forms of advanced analytics, such as big data analytics, statistical analysis, text mining, predictive analytics, and data mining. In many incidences, though, innovative analytic projects are led and managed by separate teams of predictive modelers, statisticians, and data scientists among other skilled analytics professionals. BI teams oversee more straight forward querying and analysis of business data. This explains why many companies are yet to integrate their BI programs with advanced analytics. Fundamentally, they lack the resources required to handle the integration process and the final data analysis methods. Nonetheless, Barrett (2011) argues that there are organizations that have the ability to achieve the integration process but still choose not to. This is because advanced tools are expensive and are only relied upon when it is necessary. Companies that can access data and transform it into useful information using standard BI programs opt for the same as opposed to going an extra mile to incorporate advanced analytics. Eventually, they implement similar practices to enhance their decision making as well as performances in the market. Most of them are forced to hire experts or professionals to deal with the new systems.
As debated by Groom and David (2012), traditionally, business intelligence tools were primarily used by IT professional and data analysts who ran analyses and created reports for query outcomes for business users. Many individuals did not understand how to use these tools as they lacked the skills and knowledge integral for efficient use. As such, they relied on professionals to create query results essential for decision making. Currently, more and more executives are increasingly using BI tools themselves (Bielski, 2007). This can be attributed to increased development in technologies such as self-service BI as well as data discovery tools. Businesses executives are also undergoing training to acquire skills and knowledge essential to use BI without having to rely on professionals. This is a trend that is expected to continue in the future as more and more businesses owners realize the importance of BI. Olszak and Ziemba (2010) are of the view that advancements in technologies are also expected. Specifically, new tools will be developed to improve ease of use regarding BI. As such, the business should expect better instruments in the future. Business executives must be on the lookout for new trends or advancements in the field to avoid missing out on great opportunities that can be utilized to enhance their productivity or performances in the market (Olszak & Ziemba, 2012).
As argued by Kar and Lopez (2008), business intelligence benefits businesses or organizations in many ways. One potential benefit of business intelligence applications and programs is accelerating and enhancing decisions making. BI data can include the past and new information gathered from different sources. Normally, such information is paramount in the decision-making process. In essence, the management in an organization requires access to certain information to make informed decisions on various issues (Ivan, 2015). For instance, marketing managers need access to information relating to consumer and competitive trends to determine how their company should position itself in a market. Failure to ensure the same can result in these managers making the wrong decisions, for example, which products to offer and the most effective pricing strategies (Stalinski, 2013). Access to the relevant data ensures the mitigation of such risks. The management can analyze a problem or an issue using information retrieved and transformed through different BI tools to understand it and solve it as expected. With the broad knowledge, decision makers come up with various options regarding the solution to the issue at hand. In the end, achieving success or high performances in business management becomes possible.
Graves (2011) argues that BI eliminates guesswork. Traditionally, many organizations made assumptions and relied on guesswork to determine trends and consumers’ needs and wants. Most of them operated as gambling business. Often, business executives in the contemporary world rely on gut feel or best guess as they attempt to steer their firms in the future. In doing so, their businesses miss on the opportunity to make informed choices (Matheson & Matheson, 2012). This is because they lack the structures that allow effective decision making. BI is used to deal with this problem as it provides accurate historical data as well as real-time updates. Equally, it is used to synthesize data between, for example, departmental stores and forecasting and trending. ‘What if?’ analysis is also carried out to eliminate the guestimate (Garza, 2013). In essence, BI tools and applications can be utilized to create an environment where information flow and utilization thrives. The management is in a better position to predict the future trends. Achieving accuracy regarding what the future carries may be a problem as the management cannot operate with certainty. There is always a chance that their predictions will be wrong. However, with BI, a business operates with some level of certainty (Tarraf & Molz, 2006).
BI also enables businesses to base their decisions on facts as opposed to opinions or assumptions. Relying on facts ensures effective decision making. Opinions and ideas are subjective. On the other hand, facts ensure an individual remains objective at all times. For instance, they avoid the issue of allowing their emotions or feeling dictating their actions. Subjectivity can result in one failing to understand the real issues at hand and how they should be solved. Once a business has a companywide BI system in place, the management is able to see comprehensive, current data on all facets of its business activities (Olszak & Ziemba, 2010). This includes customer data, production data, and financial information. Such a business can also read reports that synthesize the same information in pre-determined ways, for instance, current return on investment for individual products and product lines. Such data comes in handy in ensuring the management makes fact-based decisions. For example, the management can determine which products to focus on and which ones to divest or discontinue. The chances of success are increased as everything is based on facts as opposed to assumptions or opinions. Business is also able to achieve an edge over its competitors that are yet to implement similar systems or programs. This also explains why the demand for different BI systems has increased in the recent past (Maccoby, 2011).
Dunn (2009) is of the view that businesses use BI to get insight into customer behavior. Companies and organizations strive to attract and retain the highest number of customers to achieve an edge in their respective markets. Inability to attract consumers renders a business less competitive. Particularly, such a business is likely to exit the market. On the contrary, firms that display great ability to attract as well as ensure loyalty among consumers achieve success with ease. BI has also been used by businesses to collect important information on customer behavior. Data is collected through marketing researches among other strategies. Many businesses also encourage their target clients to share their views and concerns regarding products and services. This information is then analyzed and transformed into actionable knowledge. Nevertheless, to fully benefit from data collected from consumers, a company has to rely on current information (Bielski, 2007). For instance, changes in consumers’ behavior must always be determined to address their needs as expected. This does not mean that historical data is not important. Past consumer trends are also required when predicting their future needs. Companies also rely on their same to track their performances regarding customer satisfaction. In the process, they improve on their strategies to achieve better results (Bielski, 2007).
BI systems are also used by businesses to identify opportunities. Companies operate in different markets with different opportunities. Their ability to take advantage or pursue the available opportunities determines their chances of success (Garza, 2013). Through BI, a business can assess its capabilities; compare the same with its strengths and weaknesses against the competition; identify market conditions and trends; and respond swiftly to change. This is done to gain an edge. Decision makers in an organization act quickly in response to opportunities. For instance, they identify the most profitable customers within the shortest time possible. Reasons for low customer satisfaction can also be identified, hence the development of strategies to address the same to return a business to success. In the absence of BI system, the risk of a business failing to realize business opportunities is increase. This gives the competition an edge especially if they identify the opportunities and pursue early enough. Specifically, the company in question enjoys first-mover advantages (Chen, 2012). With the current dynamic business world, a company cannot afford the luxury of the competition taking their competitive advantages. If anything, most businesses strive to acquire the advantages enjoyed by their competitors to improve their chances of success. Pursuing the different opportunities available in the market helps in the realization of this goal (Stalinski, 2013).
According to Stalinski (2013), business intelligence also enables businesses to streamline their operations. Managers use BI tools to learn how to improve on operations for better results. In essence, they determine where they need to make changes to ensure efficiency. Operational costs are a problem to companies across the world. Materials or resources required by businesses to produce their products and services have become scarce. Business executives are forced to work more with less. Additionally, they have developed new ways of improving the level of efficiency in their operations to make savings or cut their expenses. BI helps in the realization of this goal. Reports created through the use of different BI tools come in handy in determining areas where the company in question may be suffering losses or wastages. Inefficient processes are then eliminated and replaced with more efficient ones (Olszak & Ziemba, 2012). The time taken to gather information or data is also reduced and in the process, this helps in speeding up the decision making process. Managers have more time to focus on other issues impacting the performances of their businesses. This unlike before when time was wasted on the decision-making process. Business executive spend a lot of time collecting information to form basis for their decisions. Their capability to handle other issues impacting their businesses were reduced (Chen, 2012).
Conclusions and Recommendations
Indeed, BI is a technology-driven process for examining data and presenting actionable facts to aid business managers, corporate executives, and end-users make informed business results. A variety of applications, methodologies, and tools enable companies and organizations to collect data from external and internal sources for various purposes. The recent years have seen an increase in the number of organizations using BI systems. Traditionally, many businesses ignored these applications as they were deemed complicated or sophisticated. Their applicability was left to professionals with the right knowledge and skills. Advancements in the field and increased training have changed this trend with more businesses executives showing willingness to use the systems to improve the quality of their decisions. Different tools are used in dissimilar organizations. However, organizations with the same information needs can use the same tools. BI benefits organizations in many ways. Business executives rely on the same to make informed decisions on how to effectively manage their operations. Essentially, they use BI tools to collect important information required to handle a wide range of issues. The guesswork culture is eliminated considering decisions are based on facts. As such, managers use facts or remain objective at all time. The risk of making decisions as a result of relying on assumptions is reduced.
Different BI tools are available to businesses. Some of the tools are used or utilized in the same way. Nonetheless, others serve dissimilar business information needs. It is imperative for the management in an organization to examine its activities in a market to determine its information needs. Companies that require access to a wide knowledge base need to implement advanced tools. On the contrary, those with less need can rely on standard BI tools to achieve their goals and objectives. In essence, the choice of BI tool determines on whether a company will realize the benefits of using such tools. Wrong choice leads to poor or unwanted results (Ivan, 2015). The management in organizations must also ensure that they have the right skills and knowledge to use the tools. Lack of skills increases the risk that the systems will be underutilized or wrongly implemented. There are times when the management may be forced to hire experts to manage such systems especially when they lack the resources to ensure proper training. Firms that utilized advanced BI applications must work with professional to achieve proper integration and ensure success. However, small businesses should utilize standard tools as they are easy to manage as well as maintain (Al-Zubi, Shaban, & Samih Alnaser, 2014).
Technological advancements are being experienced on a daily basis. This affects the way businesses are run and how they reach out to their final consumer. BI is also affected by the advancements especially those associated with information technologies. New ways of gathering and transforming business information are being invented. This has resulted in an increase in the number of businesses using BI methods. Fundamentally, businesses are attracted to new methods that are not only easy to manage but also to sustain (Stalinski, 2013). It is important for organizations in the modern world to always be on the lookout for new developments in the field. Replacing new technologies with old ones is of the essence. Updates provided by services providers can used to improve data collection and utilization. Equally, they are important in addressing some of the challenges associated with previous BI tools. Companies must also ensure that they collect information from a wide range of sources (internally and externally) to access what they need to ensure an edge. Nevertheless, companies should avoid pursuing any new BI system in the market. In general, they must focus only on what is applicable to them (Al-Zubi, Shaban, & Samih Alnaser, 2014).
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