What is Business Intelligence (BI)?
Business intelligence (BI) is an umbrella term used to describe the use of data analytics to support businesses making decisions. It covers collecting data, analyzing the information gathered, and transforming it into digestible components for end-users, as well as applying the information gleaned from reports and visualization to optimize performance.
These tools cannot predict what will happen or tell end-users what to do, but instead, they give insights into trends allowing users to query, search, and merge data easily to inform next steps. Technology, software, and processes aid these complex and intensive analyses.
The ability to analyze large amounts of data for business decision-making began with the advent of computers in the 1950s. Throughout the 60s and 70s, decision support systems (DSS) were developed as computer-aided models which guided business planning and decisions. Finally, in 1989, Howard Dresner used the term “business intelligence” to describe the use of fact-based support systems to improve business decision-making. However, it wasn’t until the late 1990s that this practice became more widespread.
Today, BI is used in virtually all departments in businesses, education, nonprofits, government agencies, and law enforcement. Tools have specifically been developed for human resource departments, sales teams, executives, finance offices, supply chain management, manufacturing, and IT.
The insurance industry leads the way in adopting BI tools followed closely by technology and business services. Gartner, a leading BI service provider, estimates that BI software and products worldwide will reach over $22.8 billion by 2020. IQ Blade, another BI service provider, estimates that clients who use their services see a 24 percent increase in sales.
Why is Business Intelligence Important?
Data-driven insights into companies allow executives, managers, and other administrators to visualize what is happening within a company. It tells these decision-makers what is happening right now and what has happened in the past to get them to where they currently are. Being able to make data-driven decisions has many benefits to the entities that utilize these tools.
While increased profitability is often at the top of the benefits list, other advantages include:
- Ability to make quicker decisions
- A smoothly running workplace
- Identifying new revenue streams
- Determining and capitalizing on new market trends
- Streamlining internal processes
- Reducing waste
- Diagnosing problems within the organization and course-correcting
- Ability to predict success
These benefits allow companies to be more agile, outperform competitors, and adapt to the current economic climate in an active and not reactive way.
Business Intelligence Specializations
Within the field of BI, there are numerous specializations. Specializations are divided into two types: those who synthesize the data for business intelligence and those who use the tools and data.
End-users for business intelligence tools can specialize in:
- Education and school districts
- Business and industry
- Law enforcement
Data needs to be gathered and analyzed for end-users to be able to access it easily. Professionals in the field amass massive amounts of complex data through:
- Data mining
- Predictive analytics
- Text mining
- Statistical analysis
- Big data analytics
Once the data has been gathered, other professionals or software programs then assemble and query this data for business intelligence purposes through:
- Data visualization
Applications of Business Intelligence
As the name implies, BI is used heavily in businesses but is increasingly applied to other industries. Organizations’ insights from data-gathering and analysis can help decision-makers change the course of any strategic plan.
In higher education, BI tools are used from everything from admissions to optimizing classroom scheduling to even improving student success. Through analyzing trends uncovered through BI, universities, and colleges can implement programs to increase student retention, graduation rates, and career placement. Schools can now even analyze which students are more likely to succeed and target which ones might need more academic support. However, these results are not without bias, and institutions have to work carefully to examine why the results are the way they are and factor in underrepresented students into their next steps.
Siren, a BI service provider that uses artificial intelligence to analyze data, has been working with police forces worldwide, providing them with data-driven solutions. This software allows stations and departments to easily share digestible data which, in many cases, can speed up the investigation process. Siren can even analyze the correlation between people who get speeding tickets and accidents resulting in serious injuries or fatalities.
Nonprofits also benefit from BI tools, although the lack of qualified staff who can implement and utilize the tools often hold these organizations back. Makeover Monday, a platform to help people learn data visualization, assists nonprofits by collaborating with them to get their data into digestible formats. Nonprofits can submit their data, and each week one project is chosen for participants to work on. Since 2017, they have completed hundreds of outstanding projects, such as increasing awareness about child refugees for the United Nations Children’s Fund.
Academic Programs in Business Intelligence
Earning a degree in BI prepares students to collect data and turn it into useful information to drive decision-making. Numerous programs are offered at both undergraduate and graduate courses at institutions across the country.
University of Saint Mary in Minnesota offers an online bachelor’s degree in business intelligence and analytics and an MBA in business intelligence and data analytics. Undergraduate students are required to complete general business, math, and economics courses in addition to specific classes in data gathering, business analytics, and database design. To graduate, students are also required to complete an intensive capstone project. Graduates of BI programs are prepared for careers in finance, management, or market research analysis.
Master’s degree programs in BI are typically concentrations in MBA programs or a master’s in information science management (MISM) with a concentration in business or management. The Heinz College of Information Systems and Public Policy at Carnegie Mellon University has the number one master’s in information science management program ranked by US News & World Report (2021).
Students in this program learn how to use technology to impact business in new ways, such as using machine learning to predict consumer behavior, analyzing how social media impact box office hits, or helping people with diabetes manage their home care through voice recognition. Five pathways are available for students to earn a master’s degree in 16 or 12 months in Pittsburgh, Pennsylvania, or Adelaide, Australia.
Certifications in Business Intelligence
There are numerous certifications for BI professionals, and while credentials are not required to work in BI, they can help applicants stand out. Some of the top certifications are:
- Certified Business Intelligence Professional (CBIP) – Issued from Transforming Data with Intelligence (TDWI), this certification requires passing three tests that measure one’s ability to gather, measure, and display data according to the current best practices and BI trends. Professionals will also need to provide proof of two or more years of work experience in the BI field.
- Microsoft Certified Solutions Associate: BI Reporting – This certification is the first step of many that Microsoft offers for BI. Professionals who earn this certification have demonstrated their ability to analyze, visualize, and model data using Power BI and Excel.
- Oracle Business Intelligence Foundation Suite 11g Certified Implementation Specialist – Professionals skilled at implementing the Oracle Business Intelligence Suite can earn this certification by passing an exam which measures proficiency in building dashboards, designing new queries, managing files, and setting security parameters.
Careers in Business Intelligence
With a bachelor’s or master’s degree and certification, job-seekers are well-positioned to take advantage of the burgeoning careers in business intelligence. The US Bureau of Labor Statistics (BLS 2021) showed that management analyst careers are growing at 11 percent nationally, much faster than the average of all fields around the country (4 percent).
The BLS estimates that from 2019 to 2029, this demand will create 93,800 new positions for business intelligence specialists, including the following job titles:
- Business intelligence engineer
- Data analyst
- Data scientist
- Product manager
- Software developer
- Software engineer
According to the BLS (May 2020), the median annual salary for management analyst positions is $87,660, with the lowest 10th percentile earning $50,990 and the highest 10th percentile earning more than $156,840.
Business intelligence analysts held 876,300 positions spread out over the following work environments. Here are the top five work environments according to the BLS (2021):
- Professional, scientific, and technical services: 32 percent
- Government: 17 percent
- Self-employed workers: 15 percent
- Finance and insurance: 12 percent
- Management of companies and enterprises: 5 percent