Business Intelligence: Simply explained

from | 3 March 2023 | Basics

Business Intelligence (BI) plays a crucial role in the business environment in analysing and processing data to extract valuable information for sound business decisions. Companies can collect, analyse, query and visually prepare internal and external data through the use of BI tools and methods. This enables executives and managers to gain better insights into business processes and market conditions and to react quickly to changes. In this basic article, we will take a closer look at the most important concepts and technologies in the field of business intelligence.

What is Business Intelligence?

Business Intelligence (abbreviated to "BI") refers to a Technology-based process in which data is analysed and actionable information is presented. This helps executives, managers and other end users make informed business decisions. Companies can use a variety of tools, applications and methods to collect and analyse internal and external data, run queries and create reports, dashboards and data visualisations.

The term was originally introduced by Hans Peter Luhn in 1958 and later coined by the Gartner Group in the early 1990s. Business Intelligence has evolved greatly since then and is closely associated with Data warehousingEnterprise Content Management and Knowledge Management. Today it plays an increasingly important role in corporate information management.

How does Business Intelligence work?

Business Intelligence is a process that consists of different phases to transform data into useful information that can in turn be used by companies. The basic steps in the BI process are:

Data acquisition and data transformation

The functioning of BI begins with the Data collection from various internal and external sources like DatabasesCRM systems, social media platforms, and IoT devices. This data is then stored in a data warehouse or a data mart and processed with the help of ETL processes cleaned, converted and integrated.

Data analysis

The next phase is data analysis, which is usually OLAP (Online Analytical Processing) and Data mining includes. OLAP makes it possible to View data from different angles and dimensionswhile data mining techniques such as cluster, Decision tree- and association analysis make it possible to discover patterns and correlations in the data.

Data visualisation

The results of the data analysis are then translated into meaningful reports and Dashboards converted, which the users Insights into the performance of the company give. These reports can be interactive and allow users to filter, sort and drill data to get detailed information.

For further visualisation, the results of the data analysis are converted into clear graphs and charts that make it easier for users to identify trends and patterns.

Dashboard on a tablet in the hands of a woman

In our blog post you will learn in 4 steps how to create a perfect dashboard. Learn how to select data, optimise visualisations and enable effective communication.

4 steps to the perfect dashboard

What are the components of a business intelligence architecture?

The components of a business intelligence architecture can vary depending on the needs of the business, but all are designed to generate useful information from the available data to make better decisions. Common components of a BI architecture are:

Data sourcesBI platforms collect data from a variety of sources, including internal databases, external data sources, and Cloud services.

ETL tools: ETL (Extract, Transform, Load) is a process for extracting data from different sources, transforming data into a uniform format and loading the data into a data warehouse or other storage system.

Data Warehouse: A data warehouse is a database that collects and stores data from various sources. It provides a central source of data for analysis and reporting.

Data analysisBI platforms use various analytical tools to examine data and identify trends. These include OLAP (Online Analytical Processing), data mining, statistical analysis and machine learning.

Data visualisationBI platforms present data in various forms, including charts, graphs and reports, to support decision makers.

Tasks and goals of Business Intelligence

The Tasks of Business Intelligence are among others:

  1. Data acquisition and integrationBI systems capture, integrate and consolidate data from multiple sources to create a central data source for analysis and reporting.
  2. Data analysis: BI systems enable companies to analyse data and identify trends, patterns and relationships to make informed decisions.
  3. Business reportingBI systems provide companies with an easy way to present their business data and create reports that contain information about the company's performance.
  4. Planning and forecastingBI systems help companies plan and forecast by analysing historical data and predicting future developments.
  5. Monitoring and controlBI systems provide real-time monitoring and control of business processes to ensure that business objectives are met.

The Goals of Business Intelligence are:

  1. Support business decisionsBI systems are designed to help organisations make informed business decisions by providing insights into business processes and performance.
  2. Increase efficiency and productivityBI systems are designed to help companies optimise their business processes and increase efficiency and productivity.
  3. Gain a competitive advantageBI systems are designed to help organisations gain a competitive advantage by providing fast and accurate insights into business processes and performance.
  4. Promote business growth: BI systems are designed to help companies scale and grow their business by collecting, analysing and using critical business data.

Why is Business Intelligence important for companies?

Business intelligence is important for companies because it allows them to, Informed business decisions based on data and facts to meet. By using BI, companies can improve their Improve operational performance, minimise risks, reduce costs, increase customer satisfaction and gain competitive advantage. BI provides organisations with the ability to collect, analyse and visualise data from multiple sources to gain valuable insights that help them achieve their business goals.

Business intelligence tools provide a variety of benefits, including speeding up and improving decision-making processes, optimising internal business processes, increasing operational efficiency, driving new revenue and gaining competitive advantage over rivals. BI systems also help companies identify market trends and business problems that need to be addressed.

By using business intelligence, companies can become data-driven organisations that improve their performance. They can achieve a number of benefits, such as:

  • Better understanding of the business, which enables resources to be allocated intelligently and strategic goals to be achieved, which in turn improves ROI (return on investment).
  • Insight into customer behaviour, preferences and trends that can be used to better target potential customers or adapt products to changing market requirements.
  • Monitor operations and make ongoing corrections or improvements based on data findings.
  • Improve supply chain management through comprehensive monitoring activities and sharing of results with partners and suppliers.

Retailers, for example, can achieve greater cost savings by comparing performance and benchmarks across shops, channels and regions. Insurers, on the other hand, can see where they are missing their service targets thanks to the transparency of the claims process and use this information to improve results.

The growing volumes of data increasingly require IT-supported business intelligence systems in companies. Especially in the context of Big Data, the Analytical component increasingly important. The focus has shifted from an automated system for disseminating information to various departments to business performance measurement.

If you are interested in implementing business intelligence solutions in your company or have further questions, please do not hesitate to contact us. We are always at your disposal and offer non-binding advice.

How does BI support decision-making?

Business intelligence supports decision-making by enabling users to retrieve, analyse and visualise data from a variety of data sources. It helps users identify patterns, trends and relationships in the data to make informed decisions. The reports and visualisations provided by BI tools can also help communicate and document decisions. This ensures that all relevant stakeholders share a common understanding of the situation have. BI can also help predict trends and events by analysing historical data and creating models to forecast future results. By using BI, decision-makers can make faster and more informed decisions and thus improve the Reduce the risk of wrong decisions and improve the success of the company.

What are the most successful business intelligence platforms?

There are many different business intelligence platforms on the market, and each has its own advantages and disadvantages. Some of the main BI platforms include:


Tableau is a visually appealing business intelligence platform that enables users to quickly analyse and visualise data to gain key insights.


  • Simple operation and fast implementation.
  • Extensive integration with other systems such as Salesforce and SAP.
  • Intuitive drag-and-drop user interface.
  • Versatile visualisation options.


  • More expensive than some other platforms.
  • Limited possibilities for integration with Hadoop-based systems.
  • Some users complain that Tableau is slow when processing large amounts of data.

Microsoft Power BI

Microsoft Power BI is an easy-to-use business intelligence platform that supports a wide range of data sources and provides powerful visualisation capabilities.


  • Good integration with other Microsoft products such as Excel and SharePoint.
  • Very affordable compared to other BI platforms.
  • Simple operation and user-friendly interface.
  • Wide range of visualisation and analysis functions.


  • Less advanced functionalities than other BI platforms, e.g. in the area of predictive analytics.
  • Limited support for non-Microsoft data sources.
  • Some users find that the dashboards sometimes load slowly.


QlikView is a business discovery platform that combines data integration, analysis and visualisation in a single application to provide users with an intuitive and interactive data analysis experience.


  • Very fast and efficient processing of large amounts of data.
  • Users can create complex data models.
  • Good data visualisation functions.


  • High price compared to some other BI platforms.
  • User interface may be less intuitive than some other platforms.
  • Limited collaboration and sharing functions.

SAP BusinessObjects

SAP BusinessObjects is a comprehensive BI platform that provides powerful data analysis, reporting and dashboard capabilities to facilitate business decisions.


  • Comprehensive suite of analysis and reporting tools.
  • Good integration with other SAP products such as HANA and ERP systems.
  • Very robust and powerful.


  • Complex installation and configuration.
  • High price compared to some other BI platforms.
  • User interface may be less intuitive than some other platforms.

IBM Cognos Analytics

IBM Cognos Analytics is an enterprise reporting and analytics platform that combines data visualisation, data modelling and a wide range of analytics capabilities to provide users with comprehensive data analysis.


  • Good integration with other IBM products such as SPSS and Watson Analytics.
  • Very powerful and scalable.
  • Users can create complex data models.


  • Complex installation and configuration.
  • High price compared to some other BI platforms.
  • User interface may be less intuitive than some other platforms.

It is important to note that the advantages and disadvantages of BI platforms can vary depending on a company's specific requirements and needs. Companies should understand their requirements and carefully select the platforms that best fit their needs.

Top Business Intelligence Tools and Software

In our Top 10 article, we introduce you to other BI tools that can help you gain valuable insights from data.

Top 10 Business Intelligence Tools

What role do data quality and data integration play in BI?

Data quality and data integration play a crucial role in business intelligence, as they can Basis for reliable and meaningful analyses and reports form.

Data quality refers to the accuracy, completeness, consistency and timeliness of data. Data that is inconsistent, incomplete or outdated can lead to incorrect results and decisions. It is therefore important to ensure that data quality is high and that data is reviewed and updated at regular intervals.

Data integration refers to the process of bringing together data from different sources to provide a comprehensive and consistent view of the data. Data integration can be a complex task as data from different sources may be in different formats and structures. It is important to ensure that data is integrated effectively to ensure accurate analysis and reporting.

In total Data quality and data integration critical components of a successful BI strategyas they ensure that the data is reliable, consistent and meaningful.

What is the difference between Business Intelligence and Business Analytics?

Business intelligence and business analytics are related concepts, but they have Different focal points and goals.

Business Intelligence focuses on collecting, integrating, analysing and presenting historical data to gain insight into past performance and make decisions based on that insight. BI tools typically provide a variety of dashboards, reports and visualisations to give users a quick overview of key metrics and identify trends over time.

Business Analytics on the other hand, focuses on analysing data to answer specific questions or make predictions about future events. It can help solve complex business problems and make data-driven decisions. Unlike BI, which focuses on historical data, analytics can include both historical and real-time data to make predictions and forecasts.
An important aspect of business analytics is the use of advanced analytical techniques such as machine learning and artificial intelligence to gain insights from large and complex data sets. Typically, this requires specialised tools and skills such as data modelling, programming and statistics.

Thus, business intelligence is an important part of business analytics, but analytics goes beyond just reporting and uses advanced technologies to analyse data and make predictions.



Pat has been responsible for Web Analysis & Web Publishing at Alexander Thamm GmbH since the end of 2021 and oversees a large part of our online presence. In doing so, he beats his way through every Google or Wordpress update and is happy to give the team tips on how to make your articles or own websites even more comprehensible for the reader as well as the search engines.

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