What is Business Intelligence

Originally Posted 9/16/2010 

The new season is gearing up after the summer break and I go back to the fundamentals, the way I like it.

As you know, I'm not prone to deep, philosophical, discussions and I tend to be practical. You also know that I always thought that Business Intelligence is not an IT topic but, primarily a business topic.

I've said that before: a BI project is not a technical project; it is a business project with a strong technical side. The end user is always the analyst, the controller or a manager. They have requirements, problems to solve, pains to ease. Usually they do not know anything about the technicalities and do not care. In my career I've seen many times users perfectly happy with horrible technical solutions. When a sound architecture was deployed, satisfaction actually decreased. So every definition of the BI scope should not pertain to the technical environment but to the business area.

Business Intelligence is a business area like accounting or procurement. It is undoubtedly a support function and surely is not a step in the value chain model but it supplies value, indeed. My Business Intelligence definition relies on a very simple company model illustrated in the picture below.



Each single activity in the company pertains to two very big areas: operations and control. Operations is "what" is done, control is "knowing how and why" it is done.

Business Intelligence is the sum of all the things (applications, data, activities) required to support control.

If BI should be opposed to ERP, we could say that ERPs support operations. In my opinion is all that simple, there's no particular need to dig deeper because, to a CIO this difference should clarify the boundaries. Limited overlaps may occur when, usually with limited amount of data, the ERP can supply global figures or BI technologies are used to feed operational data. These cases may be decided upon as needed. I hope this short definition might be of use when describing BI to the unaware or while organizing internal resources. Enjoy.

  • Jan  4 2011,  8:51 AM

    HubertoGarza (Twitter) responded:

    Thanks for the clear and succint definition of BI.

  • May  4 2011,  4:18 AM

    ginggong responded:

    totally agree!  good to have a such a simple explanation - thanks!