What is BI anyway?

What is BI? And what do all of these words mean?

Welcome back! In case you missed it, last week we started talking about BI, or Business Intelligence. One of the key components of the digital transformation and something that companies all around the world and in all industries are implementing.

BI, is the process of transforming data or information into valuable insights, with the objective of spotting problems, opportunities and making the best decisions for your business. However, it is not as simple as it sounds. Like we mentioned in our last article a number of tools, technologies and methodologies are necessary in order to get to these insights. This week we will go over some components of BI in a simple way, so that you can choose the right tool for you, or read an article about it without your head spinning around.

We will separate the process in three steps to simplify it: collecting the data, analyzing it, and presenting it to the decision makers or “reporting”.

Collecting:

What do we mean by collecting? Companies rarely have all of their data in one place, it is in normally distributed in CMRs, ERPs, Social media platforms, spreadsheets etc, so it has to be collected from all of those places to gain access to the “whole picture”.

To do this a data preparation tool or “ETL Tool” is needed. Since both address the same issues, we will explain the second one only, but bear in mind that their differences in the approach. ETL stands for Extract, Transform and Load, and after your data goes through it, it will be standardized and stored in a single place making the analyzing easier.

Extract: the data is extracted from your locations to a “staging area” or simply a neutral area where the transformation can take place without affecting the source of the data.

Transform: the raw data has to be transformed in order to be analyzed. Imagine trying to compare apples with pears. Pretty hard huh? Depending on the Tool you are using this step could also include things like data cleaning or cleansing which simply put is the process of fixing data that is incorrect, incomplete, duplicated ... you get the idea.

Load: The transformed data is loaded or stored in a single place usually called data warehouse, or data marts (which are smaller and specific data warehouses, with only your sales information for example).

Now that you have all the data in the same format and place, it can be accessed by the BI-tool of your choosing.

Analyzing:

In this category you find both data mining and data analytics, whether these two are interchangeable or different depends on whom you ask. However, both seek to uncover hidden patterns and correlations as well as to find outliers and draw connections, all of this with the purpose of … you know it:

get valuable insights!

You might also come across “text analytics/mining”, which does the same but with text. So that you can explore posts in social media, reviews of your products, articles etc.

Presenting or reporting:

Now it's the time to present all the organized and structured information to the decision makers. A big part of modern BI is the easy-to-understand ways to do this, you could have the same information presented in a huge spreadsheet or a colorful and simple graph, imagine which one makes it easier to absorb what you are looking at?

Not all BI tools include all of these steps and some require a higher level of expertise to perform because of that. We hope that you can take all of this new knowledge and apply it to take the best decisions for your business.

Until the next time,
Your Statistance team!