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What is Business Intelligence and How Does it Work

What is Business Intelligence and How Does it Work

Beatrice Stefanescu

October 18, 2022 (modified on March 5, 2024)


Although the term business intelligence dates from the late 60s of the past century, it is strongly connected with the rise of technology in the past couple of decades. This is the strong relationship between modern business intelligence and data that modern computers can handle and provide.

Practically speaking, business intelligence is the capability of your business to handle relevant data. The goal is to understand every aspect of your business and how it works, like a living organism. Besides technology, there are specific methods that make this possible.

Business Intelligence Methods

Since business intelligence is a broad term that covers different areas necessary for understanding data, an excellent way to understand it is to understand these areas. Machine learning (ML) is a popular way to gather data in a process called data mining. This is a modern way of gathering information since, in the past, it was possible only in cooperation with partners.


Once data is gathered, they are reported to the decision-makers within the organization. This is done with textual and graphical reports that are much easier to understand. Data visualization is a field which makes difficult-to-read pages in charts and graphs that are pleasant and easy to read.

After having visualized data, it is time to do some visual analysis. There are also statistical and descriptive analyses and many other fields which concern business intelligence. The key here is to connect all these in a functional organism which business intelligence is, at its essence.

What Are the Benefits of Business Intelligence?

So one might wonder, why should I go through this much trouble? It requires a lot of resources to create and maintain business intelligence, so why does it matter?

As the name suggests, intelligence will make your business more analytical and data-driven. Since the business cannot think for itself, you, as a stakeholder, are responsible for increasing business intelligence and learning from it.

This means that you will have faster and more efficient analysis, saving you a lot of time in the long run. Efficiency will be increased, meaning that everybody involved in the business will be more productive. If your business directly depends on customers, be sure that customers will notice better organization and enhanced experience they get when interacting with you.

Business Intelligence Strategies

Now that you know what, the question is how? The answer to how to create business intelligence is through strategy. Every business has a unique strategy and approach, and so will yours if you decide to have one. You must know that strategy is created before implementation since it serves as a roadmap for your venture.

your business

One thing that most business intelligence strategies have in common is the goal – to facilitate decision-making. Even though it can sound abstract at first, it is straightforward. Once individuals who make decisions agree based on their decisions, it is reasonably easy to respond to any challenge the project can face.

Developing a Strategy

Developing a business intelligence strategy can be done in a few actions. The important part is to appoint a person with an excellent analytical overview of data that fluctuates through your organization. This person is called Chief Data Officer (CDO).

Make sure that stakeholders have the same vision of a project. Create a reality check which can undoubtfully tell you the current situation. This is a great moment to consult with the person in charge of business intelligence.

There are many other practical things to be done, such as defining the budget and ensuring that data privacy laws are followed. What is essential is to give special attention to KPIs, based on which you will know what is working and what is not.

Final Thoughts

Making changes to a business can be a painful and slow process. Introducing new practices is never easy, and support is needed. Be ready to make mistakes. The intelligence of a business is very similar to human intelligence – it takes time and mistakes to develop it.