Data is the lifeblood of any business. The information a company generates and accesses, along with data analysis techniques used to support business decision-making processes is essential to the success of modern business. This description is more commonly known as business intelligence. Let’s take a closer look at What is Business Intelligence and why it’s critical to the success of today’s companies.

What is Business Intelligence

What Is Business Intelligence

BI tools access data from internal and external sources and help users analyze the information through reporting, dashboards, charts, graphs, and other data visualizations. Business intelligence provides users with detailed information that answers the question, “What’s the current state of the business?”

A Brief History of Business Intelligence

What Is Business Intelligence

The term “business intelligence” dates back to the 1860s, but it wasn’t until the late 1980s when the more modern definition of the word took hold. Howard Dresner, founder and chief research officer at Dresner Advisory services and widely considered the “godfather” of BI, created a general business intelligence definition as “concepts and methods to improve business decision making by using fact-based support systems.”

In the 1990s, the practice of business intelligence became more mainstream as vendors entered the field, creating data warehouses, decision support systems, and executive information systems, the technology that are critical components of BI today.

Business Intelligence and Analytics: What’s the Difference?

Business Intelligence and Analytics_ What’s the Difference

Today, business intelligence has evolved from a business reporting tool or decision support system thanks, in part, to the rise of powerful and easy-to-use business analytics (BA) systems. It’s not surprising to see the terms business intelligence and business analytics used interchangeably. Both processes work in concert with each other. However, there are important differences between the two.

Business intelligence is descriptive analytics, leveraging past and current data to describe the state of the business as it exists today. It answers the questions of what happened, when, who, and how many.

Business analytics, on the other hand, mines data to predict where your business is heading — based on various future scenarios —  and prescribes actions to maximize beneficial outcomes.

BA answers more open-ended questions such as why did something happen or what could happen if you change a variable. Put these two together and you get this kind of an example: looking at a report on last year’s business sales is BI. Getting a prediction about next year’s sales is BA.

How Does Business Intelligence Work?

How Does Business Intelligence Work

Now that we have a business intelligence definition let’s examine how BI works for an organization. Are you familiar with the famous phrase, “those who do not learn from history are doomed to repeat it?” It sums up how people or society will continue to follow a wrong course of action because they haven’t critically examined what happened in the past.

The same principle can be applied to business, and that’s precisely how BI works: people can easily search for the data they need to identify trends and analyze the current state of the company to make sound business decisions. BI might not tell business people what to do next, but it does inform them about what is and isn’t working.

For example, a state health care authority can use BI tools to examine the number of unnecessary emergency room visits through data sharing and use that information to devise ways to manage patients better when they do. Or a retailer can use BI to identify purchasing and operational trends that can then be analyzed to bolster thin margins and streamline operations across all departments of the company. If these companies didn’t use BI to examine the current state of the business, they likely were doomed to repeat their failing courses of action.

The Evolution of Business Intelligence Solutions

The Evolution of Business Intelligence Solutions - Digital Entrepreneur Tools

In the early days of BI tools, IT professionals and data analysts were the primary users, running analyses and producing reports for other business users in the enterprise. These kinds of in-house transactional reports are still in use today, especially when data governance is required due to being in a regulated industry (for example, financial or healthcare).

Thanks to cloud computing, BI platforms are evolving into agile, self-service BI and data discovery tools and dashboards that allow business executives and workers to use BI tools themselves and analyze data more quickly. The main difference between these two BI tools is in how the company shares and stores its data.

In the first example, the data is retained in-house and managed by the IT department. The BI solutions sit “on top” of the data. For self-service BI, the data is often shared with the cloud-based provider of the platform, allowing for faster, albeit sometimes not as accurate, reporting and analysis. The second difference is the number of data sources.

While the majority of corporate data sources include data produced from enterprise applications, there is an increased importance of newly generated cloud-based and social network data. Today’s self-service and cloud-based BI tools are retrieving and analyzing a growing volume of data from diverse sources.

Business Intelligence Trends

Business Intelligence Trends

In the early days of cloud computing, IT departments were hesitant to move business processes and, more importantly, their data into the cloud. And rightfully so. But, now that the majority of security concerns have been met and cloud computing is more ubiquitous, deploying self-service BI tools are major corporate initiatives.

In fact, 70.1% of respondents to a Deloitte, EMA, and Informatica State of Cloud Analytics Report survey stated the cloud is already an essential part of their analytics strategy. Software vendors are responding to this demand by re-engineering existing solutions to include flexible backends, enabling them to connect to a range of data sources, or entirely new platforms are emerging from new providers to meet the diverse range of requirements from business users. For their efforts, vendors and providers are expected to generate 18.3 billion dollars in global revenue in 2017, according to Gartner, Inc.

By the end of 2020, the market is expected to grow to $22.8 billion. Another significant trend to watch is the development of mobile BI tools. Currently, the mobile BI segment accounts for approximately 20% of the global BI market, according to the Global Business Intelligence Market 2016-2020 report from global technology research and advisory company Technavio. The growth of smartphone adoption will likely emerge as a key growth driver.

Additionally, in a survey of data analytics users conducted by Clutch, a B2B research firm, 70% consider a mobile application crucial to their use of BI software. The final trend to watch is the emergence of the previously mentioned self-service BI tools. In the November 2016 “Self-Service BI Market – Global Forecast to 2021” report, Research and Markets, a market research store, forecast the global self-service BI market would double to $7.31 billion by 2021.

The most likely reason for this growth is that self-service BI tools are viewed by some as an evolutionary step from traditional BI techniques. Self-service BI tools allow business users to access data and insights in a more real-time manner without having to rely on IT, allowing business to better capitalize on opportunities and quickly react to problems.

Choosing the Right BI Tool

Choosing the Right BI Tool

Finding the right business intelligence tool isn’t an easy process. BI tools utilize data inputs and outputs in different ways and feature unique workflows and user interfaces. To make matters worse, the sheer number of vendors will likely hamper the selection process. Given the various price points and feature sets, you should prioritize your analytic needs before you start your search.

Are you looking for a more traditional BI tool that focuses on your company’s core data sets? Perhaps you are looking for a BI tool to better understand your company’s various marketing campaigns? Or are you looking to shift your BI into the cloud and adds in social media data? Perhaps you need your staff to access BI via their mobile devices.

After you have prioritized your BI needs, you can narrow your list of possible solutions based on visualization tools, workflows, customization, ease of use, and training and support options.


Business intelligence has come a long way since the days of mainframe-based analytical systems and executive information systems. While much of today’s hype is around big data and advanced analytics, business intelligence is still as relevant as ever. But, it is evolving. Organizations will always need to know the past and current states of their business.

If a company doesn’t have an accurate picture of what’s going on at the moment, it won’t matter if they have an advanced analytics system to forecast the future. Business intelligence and analytics are not mutually exclusive.

They should be considered a packaged deal. Remember: You can’t grow if you don’t know. Business intelligence keeps you in the know. Business analytics help you grow.


  1. D. J. Power (10 March 2007). “A Brief History of Decision Support Systems, version 4.0”. DSSResources.COM. Retrieved 10 July 2008. (Link:
  2. The State of Cloud Analytics 2016, by Deloitte, EMA, and Informatica State (Link:
  3. Gartner Says Worldwide Business Intelligence and Analytics Market to Reach $18.3 Billion in 2017 (Link:
  4. Global Business Intelligence Market 2016-2020, Technavio (Link:
  5. Business Intelligence Survey 2017: Mobility and Access, Clutch (Link:
  6. Self-Service BI Market by Type (Software, Services), Application (Sales & Marketing Management, Customer Engagement & Analysis, Predictive Asset Maintenance), Business Function, Deployment Model, Vertical, & Region – Global Forecast to 2021(Link:

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