What is Business Intelligence? | SunGard Public Sector

Wednesday, July 9, 2014

What is Business Intelligence?

By Todd Smith

Business intelligence is a nebulous term used by some to describe reporting, analytics or even dashboard key performance indicators. It’s many things to many people, but often poorly defined.

I like to think of business intelligence as any process that transforms data into actionable information. Breaking it down to that level requires the understanding that data without context and analysis is not information. Information provides great value to organizations when making decisions. In fact, I could argue that our business focus today in nearly every sector is about leveraging information to make good decisions. Without context and analysis data, would be nearly useless for making decisions. In my mind, business intelligence is the process by which we change data into actionable information.

To help understand this let’s consider the Data-Information-Knowledge-Wisdom hierarchy proposed in the 1980s by various researchers:


Data sits at the bottom of the hierarchy; once transformed into actionable information, it becomes useful. Once a collection of shared, understood information is gathered, it becomes knowledge. Wisdom is knowing what to do, why we do it and how to do it.

For the most part, we have limited our business intelligence efforts to accumulating data and presenting in a report or on a dashboard. We rarely present enough context to make it useful or actionable. Think about the reports you’ve seen that either present incorrect or incomplete data.  Here’s an example, although names and specifics have been changed to protect those responsible for this disaster:

January $       1.10
February $       1.20
March $       0.90
April $       1.00
May $       1.10
June $       1.20
July $       0.80
August $       0.70
September $       0.65
October $       0.90
November $       1.00
December $       1.20

It’s a revenue report. In the public sector we see many of these. There’s some critical data missing which prevents us from turning it into information. We don’t know the revenue source, the actual timeframe or the units of measure. Is this looking backward or is it a forecast? Are those amounts in dollars or millions of dollars? Where did we get the money?

Let’s make a few changes to turn this into information:

Federal Grant Revenue2015 Forecast
(in millions)
January $       1.10
February $       1.20
March $       0.90
April $       1.00
May $       1.10
June $       1.20
July $       0.80
August $       0.70
September $       0.65
October $       0.90
November $       1.00
December $       1.20

Run Date: 6/10/2014

Looking at the above we now know this is a forecast for 2015’s federal grant revenue. We can see that we expect revenue to take a dip right after our fiscal year begins in July. We can now use this information to plan our resources accordingly.

That’s business intelligence—changing data into actionable information.

What will you do to change data into actionable information? How will you convince your team and leadership that this is a worthy endeavor? What change can you accomplish using business analytics? How can you elevate information into shared knowledge in your organization?

We’ll cover those and more topics in future posts. Until then, keep your eyes peeled for examples of transforming data into information and look for opportunities to improve.

Todd Smith is program manager for data and analytics at SunGard Public Sector. For more on the intersection of business intelligence and local government, follow Todd on Twitter. 

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