Understanding the real meaning of the term “Business Intelligence”​

Dr Nedim Dedić

In this artcile I provide short history of the term “Business Intelligence” and try to explain what it really means in today’s world. Enjoy 🙂

The term Business Intelligence was first used in 1864 to describe the process by which one banker profited by analysing information in regard to his competition [1]. In 1958, the term was adopted for Information Technology (IT) purposes by IBM and was defined as “the ability to apprehend the interrelationships of presented facts in such way as to guide action towards a desired goal” [2]. Business Intelligence was later used as an umbrella term to describe “concepts and methods to improve business decision making by using fact-based support systems” [3]. BI, in the sense in which the term is often understood today, emerged in the 1990s and was initially used to describe activities and tools associated with the reporting, and analysis of data stored in data warehouses [4].

Business Intelligence is sometimes defined as a managerial philosophy and a tool used to make business decisions more effective by managing and refining business information [5]. The term can also be used more narrowly to refer to the relevant information and knowledge which describes an organisation and its business environment, its relationship to customers, competitors and the market, and to other economic issues [5]. Brannon describes Business Intelligence as the successor to decision support systems (DSS) and BI is defined as the group of applications, technologies and methodologies that are used to gather, store, and analyse business data to provide access to meaningful information about organisational performance for decision makers [6,7]. An earlier and more formal definition is that BI is “an architecture and a collection of integrated operational as well as decision-support applications and databases that provide the business community with easy access to business data” [8].

BI is is sometimes defined only as a process, excluding relevant applications from the definition [7,9,10]. Golfarelli, Rizzi & Cella [10] argue that BI is a process, which turns data into information and then explicitly into knowledge, while Dekkers, Versendaal & Batenburg [9] define BI as a continuous activity of gathering, processing and analysing data. The most detailed definition of BI as a process is given by Lönnqvist & Pirttimäki who define BI as “an organized and systematic process by which organisations acquire, analyse, and disseminate information from both internal and external information sources significant for their business activities and for decision making” [6].

Jourdan, Rainer & Marshall define Business Intelligence as being both a process and a product at the same time [11]. Turban, Sharda, Delen & King regard BI as an umbrella term including computer architectures, tools, technologies and techniques which support decision making at the strategic level by exploiting historical data [12].

Based on the information and sources provided above, which demonstrates that BI is a concept which covers many elements, but with a focus on producing information to support decision making, BI could be understood as a holistic umbrella term, which includes the concept, strategies, processes, applications, data, products, technologies and technical architectures used to support the collection, analysis, presentation and dissemination of business information [13].

 

References:

  1. Devens, R. M., 1865. Cyclopædia of Commercial and Business Anecdotes: Comprising Interesting Reminiscences and Facts, Remarkable Traits and Humors … of Merchants, Traders, Bankers … Etc. in All Ages and Countries. Oakland: D. Appleton.
  2. Luhn, H. P., 1958. A Business Intelligence System. IBM Journal of Research and Development, 2(4), pp. 314–319. Available at: http://doi.org/10.1147/rd.24.0314
  3. Power, D. J., 2002. No Title Decision Support Systems: Concepts and Resources for Managers. Westport: Greenwood Publishing Group.
  4. Kimball, R., Ross, M., Thorthwaite, W., Becker, B., & Mundy, J., 2008. The Data Warehouse Lifecycle Toolkit. Wiley India Pvt. Limited.
  5. Lönnqvist, A., & Pirttimäki, V., 2006. The Measurement of Business Intelligence. Information Systems Management. Available at: http://doi.org/10.1201/1078.10580530/45769.23.1.20061201/91770.4
  6. Brannon, N., 2010. Business Intelligence and E-Discovery. Intellectual Property & Technology Law Journal, 22(7), pp. 1–5.
  7. Jamaludin, I. A., & Mansor, Z., 2011. Review on Business Intelligence “BI” Success Determinants in Project Implementation. International Journal of Computer Applications, 33(8), p. 24.
  8. Moss, L. T., & Shaku, A., 2003. Business Intellgence Roadmap: The Complete Project Lifecycle for Decision-Support Applications. Addison-Wesley Professional.
  9. Dekkers, J., Versendaal, J., & Batenburg, R., 2007. Organising for Business Intelligence: A framework for aligning the use and development of information. In BLED 2007 Proceedings (pp. 625–636). Bled, Slovenia.
  10. Golfarelli, M., Rizzi, S. & Cella, I., 2004. Beyond Data Warehousing: What ’ s Next in Business Intelligence ? In DOLAP ’04 Proceedings of the 7th ACM international workshop on Data warehousing and OLAP. New York: ACM Press, pp. 1–6.
  11. Jourdan, Z., Rainer, R. K., & Marshall, T. E., 2008. Business Intelligence: An Analysis of the Literature 1. Information Systems Management, 25(2), pp. 121–131. Available at: http://doi.org/10.1080/10580530801941512
  12. Turban, E., Sharda, R., Delen, D., & King, D., 2010. Business Intelligence : A Managerial Approach (2nd ed.). Prentice Hall.
  13. Dedić N., & Stanier, C., 2016. Measuring the Success of Changes to Existing Business Intelligence Solutions to Improve Business Intelligence Reporting. Lecture Notes in Business Information Processing (Vol. 268, pp. 225–236). Available at: http://doi.org/10.1007/978-3-319-49944-4_17