Business intelligence (BI) is a business management term which refers to applications and technologies which are used to gather, provide access to, and analyze data and information about their company operations. Business intelligence systems can help companies to have a more comprehensive knowledge of the factors affecting their business, such as metrics on sales, production, internal operations, and they can help companies to make better business decisions. Business Intelligence should not be confused with competitive intelligence, which is a separate management concept.
Business Intelligence applications and technologies can enable organizations to make more informed business decisions, and they may give a company a competitive advantage. For example, a company could use business intelligence applications or technologies to extrapolate information from indicators in the external environment and forecast the future trends in their sector.
Business intelligence is used to improve the timeliness and quality of information, and enable managers to be able to better understand the position of their firm as in comparison to its competitors.
Business intelligence applications and technologies can help companies to analyze changing trends in market share; changes in customer behaviour and spending patterns; customers' preferences; company capabilities; and market conditions. Business intelligence can be used to help analysts and managers determine which adjustments are most likely to respond to changing trends.
Using BI systems can help companies to develop a more consistent, data-based decision making process for business decisions, which can produce better results than making business decisions by "guesswork." As well, business intelligence applications can enhance communication among departments, coordinate activities, and enable companies to respond more quickly to changes (e.g., in financial conditions, customer preferences, supply chain operations, etc.). When a BI system is well-designed and properly integrated into a company's processes and decision-making process, it may be able to improve a company's performance. Having access to timely and accurate information is an important resource for a company, which can expedite decision-making and improve customers' experience.
In the competitive customer-service sector, companies need to have accurate, up-to-date information on customer preferences, so that the company can quickly adapt to their changing demands. Business Intelligence enables companies to gather information on the trends in the marketplace and come up with innovative products or services in anticipation of customer's changing demands. Business Intelligence applications can also help managers to be better informed about actions that a company's competitors are taking. As well, BI can help companies to share selected strategic information with business partners. For example, some businesses use BI systems to share information with their suppliers (e.g., inventory levels, performance metrics, and other supply chain data).
BI systems can also be designed to provide managers with information on the state of economic trends or marketplace factors, or to provide managers with in depth knowledge about the internal operations of a business.