Business Intelligence 101

Today if you google for definition of business intelligence, you will find more than 2,50,00,000 results.

Wikipedia provides the simplest definition. Apt and straight. It says, “Business intelligence (BI) is the set of techniques and tools for the transformation of raw data into meaningful and useful information for business analysis purposes.”

To further simplify it, let me explain it with an example.

Let’s say Mz. X visits Big Bazaar for grocery shopping. She buys 15 different products from there. Now, when she is at billing counter, all the items are listed in a receipt. She pays the bill, collects the receipt, takes goods that she has bought and leaves.

Let’s assume 500 customers visit Big Bazaar daily and average number of products that a customer buys is 10. Hence, it comes to around 500 receipts every day and 5000 line items daily. Hence, in a month 1,50,000 line items.

Now, if a manager at Big Bazaar has to analyze the product wise sales for a month so as to be able to forecast and decide what order to place for the next month, he has to process 1,50,000 line items at a store level. One might argue that this can be done in an excel sheet. But, what if this analysis is to be done at regional level, where say 10 Big Bazaar outlets are there in the region, the number of line items become 15,00,000. Whhhoooooaaaaaa!

This is where Business Intelligence comes into picture..!!

Going back to the definition to relate it to our example – raw data would be the 15,00,000 line items to analyze and meaningful and useful information would be the product wise sales analysis, product wise revenue analysis, brand wise sales analysis, brand wise revenue analysis so on and so forth.

What business intelligence would help you do here is to represent data in tabular format or graphical format or many other formats in order to analyze and make decisions based on fact rather than intuition. And that’s what one of the biggest utility of Business Intelligence is..!!