What is Business Intelligence? The understandable answer.

Selling Business Intelligence software is like selling a heater to an Eskimo, when he thinks it's a refrigerator. (Yes, we know Eskimos are now called Inuits, but that's not the point.) Ask 100 Business Intelligence (BI) experts for an explanation and you will receive as many different answers. Think of Microsoft's "Surfin' CEO" TV commercial. Who understands that? Watch the Video

So here is one more answer, hopefully a bit more understandable. Business Intelligence is using existing data to generate the WHY questions about your business. Huh? Stick with me, you'll get it.

Normally in business we are looking in our data for the answers to questions; the who, what, when, and the how much. Your accountant's balance sheet answers the how much. HR's payroll answers the who gets what. The factory floor's inventory list tells us when to order raw materials.

BI, on the other hand, does not answer any specific question. Instead, it strives to find the WHY question you didn't know to ask. BI software tools allow you to examine data at different viewpoints. By doing so you start to notice patterns - and more importantly - you notice when patterns are out of whack.

Let's dig a little deeper with a simple example. Your retail business has sales data. At each sale you record a number of things; what was sold, how much, in what store, was it cash or credit, and so on. You may seek the answer to "how much was sold in each store?" That’s simple enough to query your database and answer that question. With BI, however, you start with the premise of not knowing an exact question. The software tool allows you to query data dynamically. That means you may look at the sales for all stores, and then look at the same sales by product, or product group, and then by salesman. All this is made as intuitive as possible, with just a few mouse clicks.

In one view of the data, you notice a few stores generate more cash sales than credit card sales. Your margins are better with cash, which you like. The BI software has asked you, "why are these stores attracting cash paying customers and not the credit card bandits?" Think hard, this question is for you, the business owner. It so happens there are ATM machines next to those stores with high cash sales. Ah-hah, the eureka moment. You remember a phone call you had a few weeks ago with your bank's sales guy. He wanted to put ATM machines in your store lobbies at no expense to you. It's time to give that guy a call!

Ok, that example was a little far fetched. But you get the idea. Business Intelligence is that little five year old that won't stop asking why, why, why. Just listen to those questions; there are great insights in them. So much so that those questions have turned BI into a $10 billion a year industry.

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