IBM researcher Peter Luhn wrote in 1958: “Business Intelligence is the ability to apprehend the interrelationships of presented facts in such a way as to guide action towards a desired goal.”
Thirty-one years later, Gartner Group analyst Howard Dresner added, “Business Intelligence describes concepts and methods to improve business decision making by using fact-based support systems.”
Today a number of companies use BI to run business tests, including restaurants like Wendy’s and T.G.I. Friday’s, as well as sports teams like the Boston Red Sox and the New England Patriots.
customer support
A number of business executives rely on business intelligence systems to run business tests and perform everyday functions. For instance, Wendy’s and T.G.I. Friday’s use BI software to decide which new products to add to their menus, which poor performing items to remove and which poor performing stores to close.
They can also renegotiate food supplier contracts and identify inefficient processes through their software. In sports, the New England Patriots and the Boston Red Sox both use team data and analytics to help coaches select players, stay below the salary cap, develop new plays tailored to their competitors and predict their chances of making the playoffs using statistics.
Retailers like Wal-mart uses data mining to improve help desk and order inventory. Capital One runs BI software and performs over 30,000 business tests each year to identify the best customers and which credit card offers to send. In fact, most of the most successful enterprises under each category use BI solutions to keep ahead of the competition.
customer care
Increasing return-on-investment (ROI) is what companies really want and Business Intelligence assists with just that. BI systems work together with ERP (enterprise resource planning) and CRM on demand (customer relationship management) to help roll their reports into more usable data for executives and salespeople alike.
BI software is also excellent at monitoring business processes. For instance, one time the city of Albuquerque, New Mexico saved $2 million over the course of three years just by cutting excessive cell phone usage, overtime, and other operating costs. Similarly, Toyota found it had been double-paying its shippers in 2000, wasting $812,000.
CRM on demand
So what will the future of Business Intelligence be? In 2009, Gartner Group predicted that, over the next two years, at least 35% of the top 5,000 global enterprises will fail to make wise decisions because they lack the information and the tools.
By 2010, 20% of organizations will have an industry-specific analytic application delivered by software as a service, which will become standard components in any BI system. To stay relevant, BI software manufacturers and consultants must be able to transform their product into a more up-to-speed application and business executives must be fully committed to understanding how to make BI work for them.
