The Data Warehousing Institute, a provider of education and training in the data warehouse and BI industry defines BI as:

The processes, technologies, and tools needed to turn data into information, information into knowledge, and knowledge into plans that drive profitable business action. Business intelligence encompasses data warehousing, business analytic tools, and content/knowledge management. ^[1]

This is a great working definition, especially because it completely captures the idea that there is a hierarchy imposed on the different scopes of intelligence. In addition, this definition also exposes two critical notions:

• A BI practice is more than just a collection of tools. This means that without the processes and the right people, the tools are of little value.

• The value of BI is defined in the context of profitable business action. This means that if knowledge that can be used for profitable action is ignored, the practice is of little value.

Unfortunately, the words data and information are frequently used interchangeably. At the risk of clashing with any individual's understanding of the terms data, information, and knowledge, let's use the following conceptual definitions.

• Data is a collection of raw value elements or facts used for calculating, reasoning, or measuring. Data may be collected, stored, or processed but not put into a context from which any meaning can be inferred.

• Information is the result of collecting and organizing data in a way that establishes relationships between data items, which thereby provides context and meaning.