BI Tools – A Complete Introduction | HEAVY.AI

What are BI Tools?

Business Intelligence (BI) tools are proprietary or open source application software that are used to collect, process, analyze, sort, filter, and report large quantities of data from internal and external systems, for the purpose of transforming raw data into useful information for business purposes.

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What is Business Intelligence?

Business intelligence is the process by which enterprises use strategies and technologies for analyzing current and historical data, with the objective of improving strategic decision-making and providing a competitive advantage. Business Intelligence leverages BI reporting tools to transform data into actionable insights that improve business decisions. 

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A Brief History of BI Tools

The concept of business intelligence, a term coined by historian Richard Miller Devens in 1864, began with the most rudimentary tools for information visualization: pen and paper. Devens noted the improvement of a successful 17th century banker’s business strategies with the use of empirical data rather than gut instinct. 

Frederick Taylor, an American mechanical engineer and leader in the Efficiency Movement of the late 19th/early 20th century, developed the “Stopwatch Time Study” and combined it with follow engineer Frank Gilbreth’s Motion Study methods to develop greater efficiencies that boosted industrial production. Taylor would go on to act as a consultant on the Ford Model T assembly line. 

In the late 1950s, IBM researcher Hans Peter Luhn, recognized as the Father of Business Intelligence, theorized about a Business Intelligence system that would employ what we know today as Machine Learning. 

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Then in the 1970s, IBM computer scientist Edgar Codd’s paper “A Relational Model of Data for Large Shared Data Banks,” would usher in the next generation of relational databases that would support the development of modern Business Intelligence software tools. Larry Elison and his partners would release the first true relational database management system onto the market in the late 1970s, guiding in better databases and lower storage prices, and paving the way for the user-friendly business intelligence tools we use today. 

The 1990s would introduce OLAP (Online Analytical Processing), a data warehousing approach to dealing with multi-dimensional analytical queries, and ETL (Extract, Transfer & Load), which is the process by which data is cleansed and prepared for OLAP. The new millenia would introduce social networking, big data analytics, and self service business intelligence tools like Google Analytics. And the last decade has shown the growing power of Business Intelligence and analytics tools. Business intelligence concepts, methodologies, tools, and applications are currently used in a wide variety of sectors and applications, including politics, science, and advertising.

How do Business Intelligence Tools Work?

Business intelligence platforms employ a variety of different methodologies, procedures, technologies, and architectures to enable the extraction and ingestion of large amounts of raw, disparate data into data warehouses, from which information can then be queried. BI tools process and prepare raw data for analysis, and facilitate the generation of reports, data visualizations, and dashboards. 

BI and visualization tools feature customizable dashboards that ensure the most relevant information is presented first. Business managers can explore what-if scenarios, which can help mitigate risk and inform real-time decisions. Machine Learning algorithms can help predict future trends, while historical data can be cross-referenced to identify recurring trends. 

Centralization of data sources helps managers get a complete, full-picture view of the business, and data integration with mobile interfaces helps business users view reports at any time, from anywhere in the world, which helps with real-time decision making.

BI data visualization tools aim to streamline the analysis process so that the average user can visualize, understand, and draw conclusions from their data. The results empower businesses to inform and accelerate decision making, identify trends and revenue potential, increase efficiency, determine KPIs, and reveal business opportunities.