The major difference between business intelligence and knowledge management is the scope of activities involved in each area. Business intelligence focuses solely on capturing data, manipulating the data and analyzing the data. Whereas knowledge management would perform business intelligence activities while also pursuing the creation of new knowledge.
Table 1 Activities of knowledge management and business intelligence
|Knowledge Management||Business Intelligence|
|1. Capture data||1. Capture data|
|2. Organize data||2. Organize data|
|3. Analyze data||3. Analyze data|
|4. Aggregate data||4. Aggregate data|
|5. Apply data||5. Apply data|
|6. Create new knowledge||6. No equivalent action!!!!!!|
|7. Knowledge dispersion||7. No equivalent action!!!!!!|
The differences between business intelligence and knowledge management are subtle, they are not readily apparent because both areas of study contain similar processes. Both business intelligence and knowledge management perform similar activities in collecting data, organizing the data, analyzing data, aggregating data, and applying data to generate solutions to help make business decisions. However knowledge management includes two other activities that business intelligence lacks. These activities are the creation of new knowledge and the dispersion of knowledge throughout an organization. This is where knowledge management encompasses the activities of business intelligence.
The future of these areas is still uncertain; however there are several companies emerging to provide services for both business intelligence and knowledge management. Business intelligence firms, such as The Center for Business Intelligence, Microstrategy, and SAP; sell their services as decision support for executive decision makers. These businesses sell and implement software that captures data, manipulates it into useful information and applies the information to answer specific questions, show trends, create reports or forecast future events.
Industry offers little in the way of knowledge management services. Perhaps this is because knowledge management encompasses many activities that are classified as business intelligence. Bergeron states that “many database companies and reengineering consultants became KM companies overnight by simply modifying copy in their sales brochures.” Despite this, there are a few dedicated knowledge management consulting firms, such as Sveiby Knowledge Associates, that are willing to provide advice, tools (including business intelligence tools) and a certification program to further knowledge management.
Whatever industry offers now and in the future, it is apparent that both business intelligence, and as an extension knowledge management are both areas that will continue to grow. As long as businesses need to make important decisions that are based upon information that can be captured with information technologies these two areas of study will remain a popular topic in the future.