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How Does Business Intelligence Work?

by | Buying BI, Reporting

Business intelligence (BI) is a blanket term referring to the processes and technologies used to “support the collection, analysis, presentation, and dissemination of business information.” 

Although most associate BI with modern software applications, the term predates these solutions by well over a century. “Business intelligence” was first used to describe banker Sir Henry Furnese’s lucrative method of capturing and analyzing information before it had reached his competitors, and businesses have been leveraging data to increase profits ever since.

How businesses execute their BI strategies, however, has changed dramatically with the advent of new technologies. Before Edgar F. Codd invented the relational data model in 1968, databases had “no solid theoretical foundation” and could only be accessed by highly trained specialists. Relational database management systems (RDBMS), on the other hand, could be accessed by anyone who knew Structured English Query Language or SQL (pronounced “sequel”).

SQL and other querying languages made data analysis easier than ever, but modern business intelligence solutions have taken accessibility even further. As business intelligence gathered steam in the 1980s and 90s, data-driven business management became the norm across industries. To accommodate the growing demand, BI platforms began introducing graphical user interfaces (GUI), which enabled non-technical stakeholders to manipulate business data without knowledge of querying languages.

These intermediary graphical layers are what most of us know as modern business intelligence software.

So how does it actually work?

BI solutions translate user actions into a language the relevant data sources can understand, receives the query results, and then displays them to the user in the format requested. This process will look a bit different depending on the BI solution in question, but let’s look at Exago BI as an example.

The user might prepare a report like this one simply by dragging and dropping data fields onto the canvas grid, writing a few basic formulas, and adding a chart.

Exago BI Report in Design Mode

When they click the “Run” button in the upper right-hand corner, Exago BI begins translating the report into a SQL query. This report’s query is 46 lines long; below are the first 24. 

SQL Generated by Exago BI

The database receives this query, processes it, and returns the results. Exago BI then displays the results exactly as the user requested to see them, per the report design. All of this happens in real time, in the approximately one second it takes for the report to run.

Exago BI Report Output in Viewer

But this is a relatively simple report sourcing only a handful of tables in a single relational database. Exago BI is equipped to handle far more complex reports sourcing not just tables but also programmatic objects like views and stored procedures, combining that data with data from other types of databases — even non-relational ones. 

How do organizations use BI?

What data an organization is able to access often dictates how that organization will leverage BI. Since the vast majority have operational data, increasing operational efficiency with the goal of growing profits is an especially common use case. 

McCloud Pest Solutions, for example, uses BI reports to audit its workflows. The inefficiencies it was able to spot and correct led to tens of thousands of dollars in savings per year. 

But a BI strategy isn’t just for improving operational efficiency. Converse College in South Carolina uses their BI solution to attract and retain endowment donors, sharing beneficiaries’ academic journeys with those who helped make them possible.

In 2020, the city of Kingston, New York used BI to quickly stand up a COVID-19 relief program, sending food and other supplies to households in need.

All of the above organizations were using Exago BI, though they may not have realized it. Exago BI is an embedded business intelligence solution used by hundreds of thousands of organizations around the world. To learn more about the SaaS companies that integrated with Exago BI in order to better serve their customers, check out our customer stories.

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