The Birth of Business Intelligence
It all started with a cunning man looking for a competitive edge.
In the early 1700s, merchant and banker Sir Henry Furnese, inadvertently laid down the foundation for what we know today as ‘business intelligence’. A man ahead of his time, he successfully built an intelligent communications network that provided him with knowledge of political, military and economic changes in advance. He used this ‘business intelligence’ to inform his trading strategy ensuring he stayed ahead of his competitors.
Two centuries later, business intelligence (BI) has evolved to become ubiquitous in the business management software industry. Today, BI is often deployed for dashboard reporting and seen as the domain of trained data analysts. But its real value extends beyond dashboards. We look at the meaning and purpose of BI in more depth and discover how can it deliver real value as part of a business management system.
What is the first thing that crosses your mind when you hear the words “Business intelligence”? Is it bar graphs? Pie charts? It’s a dashboard, right? Most people think of BI as nothing more than a data visualisation tool. As evidenced by 2015 research showing 89% of prospective software buyers are seeking BI software for dashboards above all else2. However, this is a common misconception. Let’s take a look at a more precise definition of BI and put an end to those misconceptions.
One simple definition is by Hans Peter Luhn, a founding father of BI. He describes BI as, “The ability to apprehend the interrelationships of presented facts in such a way as to guide action towards a desired goal”.
Desired goal. In those two words lies the crux of our discussion. What is an organisation’s objective? Shockingly, research tells us 74% of companies have difficulty defining their business requirements regarding analytics. Therein lies the problem. Often, the misnomer is that BI’s value lies in the graphical representation of relevant information. End of story. The truth is BI offers a lot more. However the fundamental starting point is to have a clear vision of what your business seeks to gain from an analytics program.
To demonstrate why our understanding of BI should be broader, we need only look at Gartner’s definition. They describe BI as “applications, infrastructure and tools, and best practices that enable access to and analysis of information.” Let’s focus on best practices as this is often ignored when talking about BI.
The best practices of data storage is one of the fundamentals of BI. Unifying systems and databases ensures organisations are accessing information from a single reliable and accurate source. Unfortunately, this is often an afterthought when considering BI. As Luhn attests, it is the interrelationship of facts that guides our decision making. You cannot gain valuable insight without first connecting information sources. Today’s world of data-driven decision making is fueled by inter-operability. This is paramount to the successful implementation of BI.
Just as important are the practices governing the reliability of data. Without clean, up-to-date and relevant data, even the most intuitive leaders will be impaired. It stands to reason, if you can’t trust the information at your disposal, it has little value. As an Aberdeen survey of senior executives revealed, 25% of their data was too fragmented to develop a clear picture of their business. Inconsistency can also breed cynicism within an organisation inhibiting adoption of BI. For this reason, best practices should be central to the implementation of BI. They form the cornerstone of a successful BI program and ultimately help you achieve your desired goals. Case in point, a 2015 survey found high performing businesses had tight control over data usage and clearly defined policies. They also saw an 84% improvement in speed-to-decision.
With a clearer picture of BI, visualisation tools such as dashboards become somewhat irrelevant. They are the conduits to data and subsequent insights. Yes, they’re still important to data discovery and the ability to ‘interact’ with data, but if the data is sound, the visualisation tools become almost utilitarian. Thus we see there is more to BI than what you see on the surface.
At Axsys, we have a a range of MYOB ERP solutions that utilise business intelligence to help your businesses stay ahead. Contact us to learn more about intelligent business management solutions.