Definitions of Business Intelligence

The Business Intelligence industry is a rapidly evolving space which continues to show strong YoY growth with no obvious signs of slowing. As with any term as important as BI, there is a lot of confusion about what it is and how it may apply to your business. To help you understand this term, we've collected definitions of BI from around the web to share with you.

Definition of Business Intelligence

Let's start with Google's top result, Wikipedia: "Business intelligence (BI) is a set of theories, methodologies, processes, architectures, and technologies that transform raw data into meaningful and useful information for business purposes. BI can handle large amounts of information to help identify and develop new opportunities. Making use of new opportunities and implementing an effective strategy can provide a competitive market advantage and long-term stability."

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Hans Peter Luhn

IBM researcher Hans Peter Luhn is credited with coining the term Business Intelligence in a 1958 article. He defines BI as "the ability to apprehend the interrelationships of presented facts in such a way as to guide action towards a desired goal."

Howard Dresner

Building upon this idea, Howard Dresner in 1989 (later a Gartner Group analyst) proposed "Business Intelligence" as an umbrella term to describe "concepts and methods to improve business decision making by using fact based support systems."


Forrester further develops this idea with the following broad definition: "Business Intelligence is a set of methodologies, processes, platforms, applications, architectures, and technologies that transform raw data into meaningful and useful information used to enable more effective strategic, tactical, and operational insights and decision-making."

Wayne Eckerson

Wayne Eckerson used this rather simple concept: "BI consists of two diametrically opposed activities: top-down, metrics-driven reporting, and dashboarding where you know in advance what things you want to monitor, and bottom-up, ad hoc analysis to answer unanticipated questions."


The BeyeNetwork published an article by Larry English where he emphasizes that "Business Intelligence requires information quality." English goes on to propose this definition of BI: "The ability of an enterprise to act effectively through the exploitation of its human and information resources."

Toolbox blog

The Toolbox blog posed the question to professional LinkedIn users, and generated many interesting and insightful responses. I think Bill Cabiró's response illustrates the potential of operational BI. He states BI is "Getting the right information to the right people at the right time."

What is business intelligence software?

Business intelligence software are the tools that make it possible to create value from big data. Some examples of business intelligence technologies include data warehouses, dashboards, ad hoc reporting, data discovery tools and cloud data services.

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Business intelligence tools are crucial to effective measurement through the use of key performance indicators and metrics across all levels of an organization, in all industries. Business intelligence tools allow companies to see both historical and current data in context, which enables better decision making and/or prediction development depending on your business objectives.

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How is business intelligence used?

Business intelligence has as positive a impact on an organization's people as it does on performance, projects, and decisions. Business Intelligence is used to turn data into actionable information for leadership, management, organization and decision making. The following are some of the ways organizations are learning to use business intelligence:

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  • Analysing customer behaviours, buying patterns and sales trends
  • Measuring, tracking and predicting sales and financial performance
  • Budgeting and financial planning and forecasting
  • Tracking the performance of marketing campaigns
  • Optimising processes and operational performance
  • Improving delivery and supply chain effectiveness
  • Web and e-commerce data analytics
  • Customer relationship management
  • Risk analysis
  • Strategic value driver analysis

(What is Business Intelligence (BI)?, Advanced Performance Institute)

Organizational benefits of implementing business intelligence

  1. Quick answers to critical business questions.
  2. Align activities with strategy.
  3. Reduce time spent on data entry and manipulation.
  4. Gain in depth real time insights into customers.
  5. Benchmark data against competitor and historical data for continuous improvements.
  6. Identify and analyze areas to cut costs and for budget allocation.
  7. Boost internal productivity by spending time on what’s important.
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How do I know when to use business intelligence for my business?

All organizations will benefit from business intelligence, but here are some clear indicators that you should look into a business intelligence technology for your business:

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  • The need to integrate data from multiple business applications or data sources
  • Lack of visibility into the company’s operations, events, news, finances, and other areas
  • The need to access relevant business data quickly and efficiently
  • Increasing volume of users requiring and accessing information and more end-users requiring analytical capabilities
  • Rapid company growth or a recent or pending merger/acquisition
  • Introduction of new products
  • Upgrades within the IT environment.

(Why do I need a business intelligence solution, Terry Ginley)

Business intelligence is meant to empower your people as much as it is your business. Companies have found that allowing employees to access and track analytical and operational data improves work efficiency and goal reaching by monitoring real-time efforts alongside the business plan. The power of BI provides your teams the opportunity to tell their data stories, working faster, smarter and embracing a more open and transparent work space. That's taking it to the next level.

What kind of businesses use business intelligence?

All kinds of companies use business intelligence! Business intelligence is helpful for businesses of all sizes and industries - from big to small, and from food to software. It's global.

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“In retail, Wal-Mart uses vast amounts of data and category analysis to dominate the industry. Harrah’s has changed the basis of competition in gaming from building mega-casinos to analytics around customer loyalty and service. Amazon and Yahoo aren't just e-commerce sites; they are extremely analytical and follow a "test and learn" approach to business changes. Capital One runs more than 30,000 experiments a year to identify desirable customers and price credit card offers.” (Business Intelligence Definitions and Solutions, Ryan Mulcahy)

As these examples demonstrate, all business can benefit internally as well as externally in terms of customer satisfaction with business intelligence. BI enables improved internal communication through simplified collaboration and sharing so that business objectives and performance properly align.

What’s the difference between business intelligence and competitive intelligence?

There are a number ways to view discrepancies between business intelligence and competitive intelligence. Competitive intelligence is defined as the process of gathering and analysing intelligence about a business's external environment, such as the market landscape for a particular industry or a business's competitors. In contrast, business intelligence is understood as internal business insights, what your company is doing.

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Business Intelligence and Competitive Intelligence may technically have different definitions, however they are closely related and must work together to make informed business objectives. Some consider competitive to be a subset of business intelligence because the information gathered from competitive intelligence adds value to data collected from BI and decision making.

It is important to note that many business intelligence tools have competitive intelligence functionality. For example, dashboards can be used to track competitors to identify opportunities in areas such as keywords and social media content.

What’s the difference between business intelligence and business analytics?

There are a number of different perspectives in the discussion of the difference between business intelligence and business analytics. The first understanding is that BI and BA are basically the same, arguing that BA is the heart of BI, excluding the actual process of decision, and focusing on the steps towards decision making.

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Others say business analytics, like business intelligence, collects and analyzes data, utilizing predictive analytics and generates visual overview reports to help address the best areas for business improvement, opportunities and strengths.

This perspective states the key difference is that business analytics solutions uses predictive analysis to solve problems before they’ve occurred, while BI enables organizations to track real-time to identify current problems and opportunities. Business Intelligence solutions may be more optimal for organizations that are satisfied with their business model and primarily want to improve operations, increase efficiency and meet organization goals, to make good change.

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