Recently a client asked us if we could develop a BI application. Just to make sure that we were on the same page we checked if she would define for us what she meant by BI. She was very clear in what she wanted. What I was not sure of, was was it BI ? Or was it just a reporting application.
That's when we realized that whilst BI was an often used term, not too many seemed to know what it is. And what's the difference between a reporting application and a BI application. So here's our attempt to define BI in a simple easy to understand manner.
One of the widely accepted definitions is "Business intelligence aims to support better business decision-making. Thus a BI system can be called a decision support system." However a reporting application too can be used as a decision support system. And so what exactly is the difference between a high end reporting application and a BI application.
We studied quite a few definitions and applications to try and understand the difference. And we could come up with only 1 major difference. The past and the future. A reporting application takes existing data and is able to show trends of the past.
A Business Intelligence application is able to take these historical trends and project future trends. What helps translate past data to future possibilities is the BI algorithm. And the effectiveness of a BI algorithm would depend on the design, flexibility, variability and ability of the user to modify user defined parameters, create scenarios and thus project several scenarios based on assumptions. It thus provides the user to make future related decisions based on scenario projections enabled by the Business Intelligence applications.
That's when we realized that whilst BI was an often used term, not too many seemed to know what it is. And what's the difference between a reporting application and a BI application. So here's our attempt to define BI in a simple easy to understand manner.
One of the widely accepted definitions is "Business intelligence aims to support better business decision-making. Thus a BI system can be called a decision support system." However a reporting application too can be used as a decision support system. And so what exactly is the difference between a high end reporting application and a BI application.
We studied quite a few definitions and applications to try and understand the difference. And we could come up with only 1 major difference. The past and the future. A reporting application takes existing data and is able to show trends of the past.
A Business Intelligence application is able to take these historical trends and project future trends. What helps translate past data to future possibilities is the BI algorithm. And the effectiveness of a BI algorithm would depend on the design, flexibility, variability and ability of the user to modify user defined parameters, create scenarios and thus project several scenarios based on assumptions. It thus provides the user to make future related decisions based on scenario projections enabled by the Business Intelligence applications.
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