Business intelligence (BI) leverages software and services to transform data into actionable insights that inform an organization’s strategic and tactical business decisions. BI tools access and analyze data sets and present analytical findings in reports, summaries, dashboards, graphs, charts and maps to provide users with detailed intelligence about the state of the business.
The term business intelligence often also refers to a range of tools that provide quick, easy-to-digest access to insights about an organization's current state, based on available data.
Reporting is a central facet of business intelligence and the dashboard is perhaps the archetypical BI tool. Dashboards are hosted software applications that automatically pull together available data into charts and graphs that give a sense of the immediate state of the company.
Although business intelligence does not tell business users what to do or what will happen if they take a certain course, neither is BI solely about generating reports. Rather, BI offers a way for people to examine data to understand trends and derive insights by streamlining the effort needed to search for, merge and query the data necessary to make sound business decisions.
For example, a company that wants to better manage its supply chain needs BI capabilities to determine where delays are happening and where variabilities exist within the shipping process, says Chris Hagans, vice president of operations for WCI Consulting, a consultancy focused on BI. That company could also use its BI capabilities to discover which products are most commonly delayed or which modes of transportation are most often involved in delays.
The potential use cases for BI extend beyond the typical business performance metrics of improved sales and reduced costs, says Cindi Howson, research vice president at Gartner, an IT research and advisory firm. She points to the Columbus, Ohio, school system and its success using BI tools to examine numerous data points — from attendance rates to student performance — to improve student learning and high school graduate rates.