Business Intelligence (BI) has become the buzzword of this new decade, it seems. Although the phrase was first coined in 1989, it took until the late 1990s for the term to catch on and have meaning in the business world. But what does BI really mean to CIOs today and how can they leverage this tool to improve corporate successes?
Overall, BI and Knowledge Management (KM) have the same purpose: improving a company’s overall performance and profitability. KM is a method of retaining and reusing corporate best practices (for more information on this topic, see my blog entry “Treat Knowledge Management as a Strategic Asset”) to maintain what a company knows and utilize that information as a competitive advantage. Business Intelligence is a means of evaluating the data within a corporate KM base and utilizing that information to analyze business opportunities. BI then becomes a powerful decision-making tool using what a company already knows.
There are still arguments amongst IT professionals as to whether KM is an integral part of BI or if BI is the supporting “spine” of KM. Certainly, the business decisions that are reached by utilizing true Business Intelligence become an important facet of a company’s knowledge, and therefore KM. While this may be seen as circular logic, one should keep this basic premise in mind: Knowledge Management is what a company knows; Business Intelligence takes what a company knows, analyzes it for profitable opportunities, and the end outcome becomes part of the KM repository.
CIOs can utilize BI technologies to mine data and provide a decision support system. The software should provide past, present and predictive views of operations, allowing decision makers to retain, model and examine large amounts of data about their corporate opportunities. These predictive analytics create “intellectual capital.” This data, information and knowledge become valuable both technically and as business-related assets.
Best practices dictate that corporate KM bases should be analyzed thoroughly and regularly using BI technologies. CIOs that focus on only KM or only BI are missing half of the picture of profitability for their company.