Information Technology and Business Intelligence
Introduction
After 1990s there was a major transformation in the commercial world. All the organizations across industry sectors have started using information technologies to maximize their productivity and profitability. Organizations started using technologies like mainframes, PCs, telecommunications and the internet along with the goods and services which they offered to the consumers. This process has become the backbone of evolution of information technology. There has been manifold increase in investments in information technology sector.
A driving force of productivity:
The US economy has seen impressive growth in Gross Domestic Product in the past few years and it is in a state of expansion. There has been increased demand for labour and low inflation. The lack of increase in price has also flummoxed many economists. The traditional theories suggest that whenever there is growth in economy and decline in unemployment rate, there is an increased probability of price pressures.
“Productivity” means the process of utilizing the productive inputs to generate output. If all the input resources like men, machine/technology and materials are effectively used, then the costs can be better managed and the organizations can offer goods and services at moderate prices to the end users.
By combining the state-of-art information technology with business strategies, organizations can achieve increased productivity. Business strategy addresses various like identifying the target markets, consumer preferences and managing the process by which goods and services are produced/delivered to the end user.
Information technology makes it possible for the business leaders and decision makers to devise various business strategies based on economic theories. This is done with the flow of information to decision makers and employees throughout an organization. By implementing effective IT, the following operations can be easily analyzed by the managers. They are:
- Production
- Marketing/advertising
- Customer relationship management
- Distribution
- Finance
- Human Resource
- Telecomm and network processes
Organizations have already started experiencing the enhancement of business efficiency through the use of information technology. Significant breakthroughs have also happened in information technology like increase in speed and memory of computers. This in-turn has opened the doors for high-powered, state-of-art software applications. The latest developments in the telecommunications technology is a value addition to the internet. The combination of all these technology has created a vast information network and this has become information pulse of an organization.
What is Business Intelligence ?
Business Intelligence (BI) refers to the tools and technique which is used to convert raw data into meaningful and useful information. Using these techniques, large amount of unstructured data is handled to identify and create new business opportunities.
The main aim of business intelligence is to make the user easily interpret the data. Based on the insights provided by tools of business intelligence, organizations gain competitive market advantage and long-term stability.
When these unstructured or raw data is transformed into value-added information, it increases the knowledge of business to individuals of all categories in an enterprise. These data are used by decision makers to implement various business strategies based on economic theory. Resources also can be easily managed to cater the needs of the ultimate consumer.
Functions of Business Intelligence
Common functions of BI are:-
- Reporting
- Online analytical processing
- Analytics
- Data mining
- Process mining
- Business performance management
- Predictive analysis; &
- Prescriptive analysis
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The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.