7.10 Business Intelligence Systems

Business intelligence systems (BIS) is an umbrella term for programs that collect, analyze and present business data. The data handled is usually that of the company using the program, but these programs can also be applied to the behavior of competitors and market sectors if sufficient information is available. In complexity, the programs vary from simple spreadsheets to large, integrated systems, and have previously gone under various names: data mining, data warehouse, data mart, etc.

Besides spreadsheets, the programs are sold as standalone tools, as suites of tools, as components of supply chain management and as parts of industry-specific systems. A few are open source or free.


BI systems are commonly grouped under these categories:

1. Spreadsheets.
2. Reporting and querying software.
3. Online analytical processing (OLAP).
4. Digital Dashboards.
5. Data mining.
6. Decision engineering.
7. Process mining.
8. Business performance management.
9. Local information systems.

Reporting and Querying Software

These tools simply extract, sort, summarize, and present selected data.

Commercial software examples: Actuate & LogiXML

Online Analytical Processing

OLAP tools are used for reports on sales, advertising campaigns, management, finance and a host of areas that call for rapid evaluation of multiple factors or scenarios. OLAP databases work faster than spreadsheets or relational databases to deal with complex analytical and ad-hoc queries that need to be handled in a multidimensional manner.

Commercial software examples. Cognos & Infor

Digital Dashboards

Digital dashboards are simply programs that lay out data or analysis in an easily-grasped manner, often like a car's dashboard (hence the name). Three types are popular today: software applications, web-browser-based applications, and desktop widgets.

Data Mining

Data mining is the process of extracting patterns from large data sets by combining methods derived from statistics and artificial intelligence. Business currently uses these approaches in marketing, surveillance and fraud detection, but the growing belief in their value is creating an expansion of novel data mining technologies. Data dredging, data fishing and data snooping refer to the use of data mining methods to sample parts of a larger population. The samples may be too small for reliable statistical inferences to be drawn about the validity of any patterns discovered, but those patterns can be tested against larger data populations with special database management tools.

Commercial software examples. SAS & Statistica

Decision Engineering

Decision engineering applies engineering approaches to the process of reaching a decision. Business data are becoming increasingly complex, and approaches like requirements analysis, specification, scenario planning, quality assurance and security become more necessary. Decision engineering enables management to come to more reliable decisions more quickly, appreciate the risks inherent in any decision, to respond effectively to changes, and identify the resources needed to meet those changes.

Commercial services examples: Crafitti Consulting & Quantellia

Process Mining

Process mining is a management technique that analyzes business processes based on event logs (e.g. webserver records). Commonly it is used when other approaches are not possible. Knowledge is extracted from event logs by programs which aim to identify the processes happening and relate them to matters of control, organization and social structures. There are three types of process mining. The first, called 'discovery', aims to construct a model from the data available. The second, called 'comformance', compares the data available to some preexisting model and notes the matches and discrepancies. The third, called 'extension', does not aim to check conformance but enrich the model. Process mining is essential in computer-controlled manufacturing, but also has applications in website traffic analysis and marketing campaigns.

External services: Process Mining & Fluxicon

Business Performance Management

Business performance management is a set of tools that help management to achieve one or more preselected goals. Synonyms include 'business performance management', 'corporate performance management' and 'enterprise performance management'. Business performance management has three main aims: 1. to select appropriate goals, 2. report on progress towards those goals, and 3. measure the effect of management intervention.

Local Information Systems

LIS are business intelligence tools used to collect, store, analyze and present statistical data that have a strong geographic reference. It is used by managers, officials, policy makers, front-line staff and citizens to build a picture of local neighborhoods for their particular area of interest, commonly subsidiaries' performance, government services or health matters.

Commercial services examples: Instant Atlas & Data4NR


1. What is meant by business intelligence systems?
2. Name the nine types under which business intelligence systems are commonly grouped.
3. Distinguish between business intelligence systems, databases and content management systems.
4. Choose three business intelligence system types and explain their use in detail.
5. Your company wants the latest in business intelligence systems. How would you a. conduct an Internet search and b. evaluate the software available?

Sources and Further Reading

1. Business Intelligence Tools. Business Intelligence Toolbox. Commercial site but lists tools.
2. Online analytical processing. Microstrategy. Standard OLAP and Relational OLAP Analysis: basic points.
3. KPI Dashboard using Analyzer from Strategy Companion. Dashboard Zone. Site devoted to dashboards, both free and commercial.
4. Data Mining by Doug Alexander. University of Texas. Introduction, with good references.
5. Elements of Decision Engineering. Quantellia. Illustrated introduction to commercial services.
6. Process mining. Business Process Management. Papers and sample book chapters.
7. Business performance management. BPM. White papers and software demos.
8. Local Information Systems: A review of their role, characteristics and benefits. UK Government. March 2007. Extensive articles / white papers.
9. Business Information Management by V. Benson and K. Davis. Bookboon. 81 pp, database-orientated ebook: free.

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