The Definition, Role and Importance of Business Intelligence

Business Intelligence, commonly abbreviated as BI, is an industry term that refers to a wide variety of software applications that are used to analyze the raw data provided by an organization and includes activities such as data mining, querying and reporting, and online analytical processing, among others. Business intelligence is used by companies as a means to improve decision making which may cut costs and identify new business opportunities. Business Intelligence is a widely varying term and can encompass many different types of Information Systems that seek to identify, extract and analyze data for decision-making purposes such as predicting future patterns for sales and forecasting revenues, among other uses.

A Management Information System (M15) is especially useful for Business Intelligence because M15 is able to generate reports with accurate and timely information in order for users to make decisions, solve problems and track progress.

An Expert System would also be useful for Business Intelligence as it captures and stores knowledge from human experts, then in turn imitates expert human reasoning and decision-making for those who may have less experience (Davoren, ntdt).

Business Intelligence is an actively growing business application that continues to make strides in its implementation within the business community. The economic recession of 2008 made companies realize that they had to be more aware of organizational changes and find ways to keep up with the ever-changing demand of its shareholders while keeping up with the ever-changing demands of financial oversight levied from the government. Recently, organizations have been implementing industry-specific analytical applications delivered via Software as a Service (Saas) as part of a standard component within their BI portfolio; about 20 percent of organizations are currently using SaaS, with this number expected to increase over the years.

Get quality help now
Doctor Jennifer

Proficient in: Business

5 (893)

“ Thank you so much for accepting my assignment the night before it was due. I look forward to working with you moving forward ”

+84 relevant experts are online
Hire writer

SaaS is relied on by organizations to deliver specific analytic applications that have been build using industry data that the organization has collected in order to increase their share of power in the market for BI platforms. The benefits of Business Intelligence within an organization are many, among which the ability to identify cost-cutting measures, while reacting to demand in order to optimize set prices, resulting in an increase of returns on investment (ROI), be either identifying good ideas that should be implemented, or identifying bad ideas that should be eliminated. Due to the accessibility of the additional knowledge provided by BI, companies are now provided extra leverage to be used during negotiations among suppliers and customers. The main potential problem associated with BI is the vast amount of information that must be sorted through, much of which can be irrelevant or of poor quality; user resistance becomes a problem due to the amount of effort that a person may have to go through to sort the had information from the good information.

Another potential problem arises within BI due to the tools that are used, many of which are not user-friendly, although user-friendliness within BI has been on the rise over the years, and looks to continue on that path into the future. Lastly, companies may not fully understand the BI environment enough to come up with solutions on how to improve their pitfalls. Business Intelligence has been on the rise in organizations over the years, and continues to be a main emphasis in the business environment due to the advantages it provides, such as the ability to identify cost-cutting measures that increase the organization’s return on investment. As Business Intelligence continues to become more popular, organizations must be aware of potential problems associated with Business Intelligence, such as sorting through the vast amount of information in order to find useful, relevant information that can be used to improve upon the organization.

Cite this page

The Definition, Role and Importance of Business Intelligence. (2023, Mar 08). Retrieved from

Let’s chat?  We're online 24/7