Getting Intelligent About Business Intelligence

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Mention "Business Intelligence" and you may receive a wide array of definitions, differing opinions about what makes a platform a business intelligence (BI) one, as well as some grumblings about BI as yet another useless technology buzzword.

There are, however, key components that BI platforms share and there are consensual definitions in the industry as to what constitutes BI. More than just a buzzword or passing technology fad, BI is an essential part of a business' overall strategy for success. BI is often associated with bloated, complicated and expensive enterprise technology platforms, yet there are plenty of BI vendors out there offering solutions targeted at the SMB market.

Here's a look at some general definitions of BI, the controversies surrounding it, the future of BI and, finally, the leading vendors in this oft-misunderstood technology space.

Business Intelligence: Sometimes Hard To Define

Trying to pin down which features exactly make up a BI solution can be as enigmatic as trying to define which factors make for a true cloud-based solution.

The phrase "business intelligence" is thought to be a term coined by IBM researcher Hans Peter Luhn, back in the late 1950s. Luhn described BI as the ability to comprehend the interrelationships of presented facts in such a way as to guide action toward a desired goal. In 1989, a Gartner researcher, Howard Drenser, defined BI as a set of concepts and methods to improve business decision-making by using fact-based support systems.

A more broad definition of BI: the analysis of a company's collection of data in order to achieve some goal or greater operational insight, such as an increase in revenue, comparison to a competitor or to achieve cost-cutting.

Companies can collect data using a wide range of software products--from Excel to expansive database applications that are designed for vertical markets like health care. Because collecting data can come from a large variety of sources, BI software helps to gather data into a single repository and sort it for analysis.

Currently the technology industry has pretty much agreed on the basic factors about what makes for a BI solution:

• The ability to extract data from disparate sources such as CRM, ERP systems and other applications.

• The ability to centralize, organize and standardize information in repositories.

• The inclusion of analytical tools that allow businesses to perform reporting and queries to uncover business patterns, trends and issues.

• The ability to visualize that data in some end-result format such as charts, graphs, or in other forms.

One thing is clear: Business intelligence is a critical component of an organization's day-to-day operations.

BI Controversy

BI is often thought of as a vague concept or as an umbrella term that is used more as a marketing ploy than a description of a specific technology. There is most certainly no shortage of vendors that attempt to peddle their software offerings as "business intelligence solutions" when, in actuality, their products often consist of no more than basic data-collecting, numbers-crunching and some reporting features. One differentiator between BI and your run-of-the-mill business analysis software, according to some BI tech analysts, is the ability of BI to not only do data analysis but to also do data visualization. There is a really interesting debate about this very subject on Stephen Few's blog. Few is founder and principal of Perceptual Edge, a "consultancy that was established to help organizations like yours to design simple information displays for effective analysis and communication."

The meat of the debate on Few's blog post, "Data Visualization and Analysis--BI's Blind Spot," centers on whether the visual representation of data; i.e., in the form of charts and other eye-grabbing graphic forms, is a key feature of BI solutions.

Here is Few's blistering review of one software company's business intelligence product:

"'l'll begin by admitting that this new business intelligence vendor's name isn't really "Lazysoft", but it's close. I took the liberty of transposing two of the letters in the name "Lyzasoft" to create a name that describes a fundamental problem with its software--it's the product of laziness. Some software engineers no doubt had lots of fun developing this product, but Lyzasoft approached the task in the typically lazy manner of many software companies--they didn't bother engaging the services of designers who actually understand data visualization or data analysis."

He lowers the hammer with this statement:

"I will say, however, that [Lyzasoft] fails miserably in its ability to help people explore, visualize and then present data."

To be fair, reviewers here have not had the opportunity to review Lyzasoft's product, and are not agreeing or disagreeing with Few's assessment. However, Few does make strong points about the debate surrounding what BI is and what it is not.

Few apparently takes issue with what many critics of BI software take issue with--if the product doesn't present end data in a useful manner, and ultimately provide solid data visualization, then it shouldn't be called business intelligence.

Few was challenged by a colleague, Colin White, founder and president of BI Research. White wrote to Few asking him to outline the differences between data analysis and data visualization. From White's perspective, if data is presented in any way that aids a business in decision-making, then that is indeed data visualization. Few does not agree:

"I certainly agree that the goal is to achieve understanding and support decision making, but not every way of doing this is data visualization, and not everything that would like to call itself data visualization deserves the name. Information can be presented in various ways, just as it can be verbally communicated in various languages; each medium of data presentation (the spoken word, the written word, and visual representations of various types) has its strengths and weaknesses, its appropriate applications, and its rules for effective use. Saying that every presentation that aids decision making is data visualization is not a useful definition."

It's easy to get bogged down into semantic minutiae of what data visualization is or isn't, ergo, what business intelligence is or is not. The fact is, though, that Few makes a wonderful point in his blog about how opportunistic vendors will claim a product as BI when in fact their solutions are centered on either collecting, cleansing, aggregating, and/or storing data. All are necessary and important technologies in their own right, yet each of these areas are more about the processing and warehousing of data and less about the analysis of the data and the presentation of that analysis.

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