Business Intelligence can be referred to a set of analysis methodologies & mathematical techniques that leverage the available data to derive knowledge / information that can be used to support/action business critical decisions. Call for a robust BI system comes from the need of making effective decisions, which has to be based on accurate information about business.

Decisions are taken by knowledge workers at all levels of the company. Most of the knowledge workers generally adopt decision making style based on experience, gut feel, instinctive & spontaneous techniques. Such methods soon become predictable & stagnant. In a long run it does not prove useful in rapidly changing economic, technology & business environment. In rapidly changing technological environment, process become increasingly complex,

To stay competitive in a dynamic business environment requires a decision making style which is supported by knowledge driven by information & data. Analytics can provide a strategic value in providing competitive advantage to the companies.

For example, Internet company observes a lot of customer attrition on their website. These users may switch to a competitive website. The company is looking to reduce this churn by offering a discount or a trial. To increase the effectiveness of campaign is to recognize those customers and estimate their probability to discontinue the service. From a given list of customers we can a implement a model to estimate the probabilities and arrive at a smaller subset of users to be targeted for the campaign. This smaller set of users will be the majority of the future discontinued users.

Such tools and methodologies support knowledge workers in making better decisions. Generally several options are available to users before making a decision. This actually helps them choose the best methodology.

Often there is a enormous amount of effort is required to extract knowledge from data. Data is present in most raw format almost incomprehensible. Data needs to be transferred to human readable format and then has to be processed (sometimes tortured) to extract information and then to knowledge to make it useful for knowledge workers.

More articles in this blog http://www.praveenkodur.com/blog will talk in detail about BI systems.

Extracting knowledge from data requires deployment of various systems, process and maintenance. Installing Transaction servers to maintaining data warehousing systems to creating decision support systems. The idea of a Decision support system is to promote a scientific and rational approach to management.

Business intelligence architecture must be designed to function efficiently with cost effective components. There are various components such as logging systems, data warehouse, BI methodologies.

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