It has been a busy few months for the business intelligence marketplace. Microsoft is making its presence felt, and Reporting Server will soon join an already crowded marketplace. Recent weeks have seen a wave of consolidation, as companies improve their software by buying in missing features: Business Objects bought Crystal Decisions, quickly followed by Hyperion's purchase of Brio.

So what is business intelligence? Graham Walter of Cognos calls it "getting meaningful information from databases". Over the past decade or so, companies have invested considerable sums in database technologies. They have also built IT infrastructures around the customer relationship management systems and enterprise resource planning tools that fill their servers with data. With terabytes of operational information to hand, businesses need to find ways of unlocking its value. This is where business intelligence software comes in; usually as a mix of analytic tools and report generators.

Business Objects' business intelligence tools build performance management dashboards. These help management teams see the information they need, when they need it. Dashboards can be built around various measurements and performance indicators, and give companies the tools they need to match performance to strategy, as well as alerting users to important events. A visual scorecard of goals and results, linked to historical performance, shows where a company is today, and where it is likely to be in three months.

So far, business intelligence (which Hyperion calls "business performance management") sounds very like existing management and enterprise information systems. Yes, they both take information from company databases and display them on users' PCs. However, today's business intelligence systems can take advantage of the whole of a company's information infrastructure, and deliver target information. Instead of information being kept in privileged silos, it is available to the whole organisation, not just individuals and departments. Rob Stevens, SAS's director of technology strategy, points out that business intelligence is not just about usability and access to data, it's also about ensuring the validity and reliability of the information that users see. To get the most out of any business intelligence system, compa nies need to manage information throughout its lifecycle - from creation to final archiving.

With the IT industry pressed to deliver return on investment, does business intelligence come up with the goods? Certainly it's had a significant effect at the brewers Greene King, where the first few reports from their Cognos systems more than paid for the project - with one report revealing the opportunity to increase profits by £250,000. The AA is using Business Objects to look at customer service performance, and expects a 300% return on its investment in three years.

For a technology that offers businesses so much, business intelligence is surprisingly little used. Some estimates suggest that as few as 10-15% of businesses actually use busi ness intelligence systems. One reason for this low penetration is complexity: until comparatively recently it was difficult to construct an effective system. As well as ad hoc query and reporting tools, business intelligence systems needed portals, analytic engines, data-warehouses and data-mining tools. Then all the tools needed to be assembled into a coherent whole, along with data from multiple sources.

One option is to buy a complete business intelligence infrastructure like Actuate's. The Siebel customer relationship management toolset also uses Actuate, which makes it easier for Siebel users to roll out a full business intelligence system. Oracle is building a business intelligence infrastructure into its tools. The Oracle database contains the tools you need to load and create large data stores, and add-ons help with building data warehouses. A single query language handles relational and multi-dimensional querying, while additional analytics and reporting features can be added directly to the database. However, despite all this investment in an infrastructure, you're not locked into an Oracle-only solution.

While the recent announcement of Microsoft's SQL Server Reporting Services may make it seem to be a new player in business intelligence, it has been offering analysis tools for some time, turning the familiar Excel spreadsheet into a business intelligence front end. Using this you can work with most data sources, designing reports using familiar development tools in Visual Studio. The server renders information into a large selection of output formats -from HTML and Word, to XML web services and email. This will also be the first Microsoft tool to generate documents in Adobe's PDF format. However, perhaps the most interesting feature is its XML-based Report Definition Language, which Microsoft has promised will be offered to standards bodies.

In an economy that demands more for less, businesses need to be able to make quick, effective decisions. Business intelligence systems help deliver the information that is needed, in appropriate and easy-to-understand formats. Like most IT solutions, business intelligence is not something you can consider in isolation. Ultimately, the value you get from a business intelligence system will depend upon how managers and staff actually use the information.