Meaning and purpose of Business Intelligence - Did we lose the true purpose somewhere?


  Companies in a variety of industries are still data-rich but information-poor and this ratio keeps increasing every day. The rate of data generation is so high that organizations simply cannot keep up with generating insights out of it.

These enterprises lack the kind of actionable information and analytical tools needed to improve profits and performance. Business intelligence (BI) is the next logical step by management to start thinking about how to capitalize on the potential of BI to improve profit and performance.

Many companies have embarked on the journey of data warehouses and yet failed to use them to achieve BI. If you think the purpose of data warehousing (DW) efforts is to simply keep producing more reports then the organization has failed to achieve true BI.

The bottom line for any Business Intelligence is to increase profit and performance and if done wrong it is absolute waste of time and money.

So if your management is hooked on the Big Data wagon and fantasizing about the hidden gold behind the untapped data sources such as social media, click stream, web logs etc then it is time to keep the focus on the main purpose of "Business Intelligence". All these systems help us to analyze big data or small data but whether they really impact our bottom line is the question that management needs to keep it as the top priority. Every decision should flow and trickle down from this focus point "Show me the money!!"


Now, not every decision is that easy or relatable to the ROI. But with decent amount of due deligence on the management part like

  • Do we need another BI tool?
  • Do we need another Data mart
  • Do we need this report or dashboard?

If you are an organization under 20 or 30 people, you may not have any of the above issues to deal with. A simple excel based dashboard system may just be sufficient and this is all there is in your BI world. But there are several huge companies where every department has their own flavor of BI tool.


One department may want a complex business intelligence system like OBIEE or Cognos whereas other department want more Tableau or Qlik like experience. So these huge companies end up having multitudes of data-warehouses, multiple BI tools and it is a complete BI medley that does not bake well.

On top of that there are new dashboard and BI vendors popping every day [due to the excess venture capital investment] and these in turn lead to confusing the management and doubt their existing infrastructure [all the VC money is spent on hiring the best sales agents whose job is to sell their BI tool as a complimentary thing to whatever the customer has].

If you look closer, every big organization has this BI Medley going on that is a serious mess and a big drag on the bottom line. Is it not the job of the CEO/CIO/CXO to question every tool acquisition and what is the team going to exhibit to prove its true worth?

Like, give me two good reasons why you need this new analytic package that works exactly like the one we already have but also has an extra pony tail?

Business Intelligence is not just a single bi product, or a technology or a methodology. BI combines products, technology, and methods to organize key information that management needs to improve profit and performance.

Ask your Business Intelligence, "Show me the money!" question

For example, the business value of an investment in a manufacturing plant is the sum of the incremental after-tax cash flows associated with the sale of the products produced at the plant. Similarly, an investment in BI creates an asset that must be used to generate incremental after-tax cash flow. Accordingly, BI investments should be subjected to a rigorous assessment of how the investment will result in increased revenues, reduced costs, or both.

The quest for delivering business value via BI can be seen as a matter of determining how an organization can use BI to

  • Improve management processes (such as planning, controlling, measuring, monitoring, and/or changing) so that management can increase revenues, reduce costs, or both

  • Improve operational processes (such as fraud detection, sales campaign execution, customer order processing, purchasing, and/or accounts payable processing) so that the business can increase revenues, reduce costs, or both

Read more about the value and purpose of business intelligence

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Tags: bi, infocaptor


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