The Data Warehousing Institute, provider of education and training in the areas of data warehousing and BI industry defines Business Intelligence as: “The processes, technologies, and tools needed to turn data into information, information into knowledge, and knowledge into plans that drive profitable business action”. Business intelligence has been described as “active, model-based, and prospective approach to discover and explain hidden decision-relevant aspects in large amount of business data to better inform business decision process” (KMBI, 2005).

Defining Business Intelligence has not been a straightforward task, given the multifaceted nature of data processing techniques involved and managerial output expected. “Business information and business analyses within the context of key business processes that lead to decisions and actions and that result in improved business performance” (Williams & Williams, 2007). BI is “both a process and a product. The process is composed of methods that organisations use to develop useful information, or intelligence, that can help organisations survive and thrive in the global economy. The product is information that will allow organisations to predict the behaviour of their competitors, suppliers, customers, technologies, acquisitions, markets, products and services and the general business environment” with a degree of certainty (Vedder, et al., 1999). “Business intelligence is neither a product nor a system; it is an architecture and a collection of integrated operational as well as decision-support applications and databases that provide the business community easy access to business data” (Moss & Atre, 2003). “Business Intelligence environment is a quality information in well-designed data stores, coupled with business-friendly software tools that provide knowledge workers timely access, effective analysis and intuitive presentation of the right information, enabling them to take the right actions or make the right decisions” (Popovic, et al., 2012).

The aim of business intelligence solution is to collect data from heterogeneous sources, maintain, and organise knowledge. Analytical tools present this information to users in order to support decision making process within the organisation. The objective is to improve the quality and timeliness of inputs to the decision process. BI systems have the potential to maximise the use of information by improving company’s capacity to structure a large volume of information and make it accessible, thereby creating competitive advantage, what Davenport calls “competing on analytics” (Davenport, 2005). Business intelligence refers to computer based techniques used in identifying, digging-out, and analysing business data such as sales revenue by product, customer and or by its costs and incomes.

Business Intelligence encompasses data warehousing, business analytic tools and content/knowledge management. BI systems comprise of specialised tools for data analysis, query, and reporting such as Online Analytical processing system (OLAP) and dashboards that support organisational decision making which in turn enhances the performance of a range of business processes. General functions of BI technologies are reporting, online analytical processing (OLAP), analytics, business performance management, benchmarking, text mining, data mining and predictive analysis:

Online Analytical Processing (OLAP) includes software enabling multi dimensional views of enterprise information which is consolidated and processed from raw data with a possibility of current and historical analysis.

Analytics helps make predictions and forecasting of trends and relies heavily on statistical and quantitative analysis to enable decision making concerned with future predictions of business performance.

Business Performance Management tools concerned with setting appropriate metrics and monitoring organisational performance against these identifiers.

Benchmarking tools provide organisational and performance metrics which help compare enterprise performance with benchmark data, to industry average, for example.

Text Mining software helps analyse non structured data, such as written material in natural language, in order to draw conclusions for decision making.

Data Mining involves large scale data analysis based such techniques as cluster analysis, anomaly and dependency discovery, in order to establish previously unknown patterns in business performance or making predictions of future trends.

Predictive Analysis deals with data analysis, turn it into actionable insights and help anticipate business change with effective forecasting.

Specialised IT infrastructure such as data warehouses, data marts, and extract transform & load (ETL) tools are necessary for BI systems deployment and their effective use. Business intelligence systems are widely adopted in organisations to provide enhanced analytical capabilities on the data stored in the Enterprise Resource Planning (ERP) and other systems. ERP systems are commercial software packages with seamless integration of all the information flowing through an organisation – Financial and accounting information, human resource information, supply chain information and customer information (Davenport, 1998). ERP systems provide a single vision of data throughout the enterprise and focus on management of financial, product, human capital, procurement and other transactional data. BI initiatives in conjunction with ERP systems increase dramatically the value derived from enterprise data.

While many organisations have an information strategy in operation, effective business intelligence strategy is only as good as the process of accumulating and processing of corporate information. Intelligence can be categorised in a hierarchy which is useful in order to understand its formation and application. The traditional intelligence hierarchy is shown below, which comprises of data, information, knowledge, expertise and, ultimately, wisdom levels of intelligence.


Data is associated with discrete elements – raw facts and figures; once the data is patterned in some form and is contextualised, it becomes information. Information combined with insights and experience becomes knowledge. Knowledge in a specialised area becomes expertise. Expertise morphs into the ultimate state of wisdom after many years of experience and lessons learned (Liebowitz, 2006). For small businesses, processing data is a manageable task. However, for organisations that collect and process data from millions of customer interactions per day, identifying trends in customer behaviour, accurately forecasting sales targets appear more challenging.

Use of data depends on the contexts of each use as it pertains to the exploitation of information. At a high level it can be categorised into operational data use and strategic data use. Both are valuable for any business, without operational use the business could not survive but it is up to the information consumer to derive the value from a strategic perspective. Some of the strategic uses of information through BI applications include:

Customer Analytics, which aims to maximise the value of each customer and enhance customer’s experience;

Human Capital Productivity Analytics, provides insight into how to streamline and optimise human resources within the organisation;

Business Productivity Analytics, refers to the process of differentiating between forecasted and actual figures for inputs/outputs conversion ratio of the enterprise;

Sales Channel Analytics, aims to optimise effectiveness of various sales channels, provides valuable insight into the metrics of sales and conversion rates;

Supply Chain Analytics offers the ability to sense and respond to business changes in order to optimise an organisation’s supply chain planning and execution capabilities, alleviating the limitations of the historical supply chain models and algorithms.

Behaviour Analytics helps predict trends and identify patterns in specific kinds of behaviours.

Organisations accumulate, process and store data continuously and rely on their information processing capabilities for staying ahead of competitors. According to the PricewaterhouseCoopers Global Data Management Survey of 2001, the companies that manage their data as strategic resource and invest in its quality are far ahead of their competitors in profitability and superior reputation. A proper Business Intelligence system implemented for an organisation could lead to benefits such as increased profitability, decreased cost, improved customer relationship management and decreased risk (Loshin, 2003). Within the context of business processes, BI enables business analysis using business information that lead to decisions and actions and that result in improved business performance. BI investments are wasted unless they are connected to specific business goals (Williams & Williams, 2007).

As competitive value of the BI systems and analytics solutions are being recognised in the industry, many organisations are initiating BI to improve their competitiveness, but not as quickly as it could be.