Knowledge Management and Business Intelligence: The Importance of Integration

Purpose – The purpose of the paper is to provide a thorough analysis of the difference between business intelligence (BI) and knowledge management (KM) and to establish a framework for relating one field to the other. Design/methodology/approach – A review of the literature from approximately 1986 through 2004 served as the basis for analysis and comparison of BI and KM. The theoretical scope of the paper is to distinguish between BI and KM to clarify the role of each in a business environment. Findings – BI focuses on explicit knowledge, but KM encompasses both tacit and explicit knowledge. Both concepts promote learning, decision making, and understanding. Yet, KM can influence the very nature of BI itself. Hence, this paper explains the nature of the integration between BI and KM and makes it clear that BI should be viewed as a subset of KM. Originality/value – This paper establishes a clear distinction between two important fields of study, BI and KM, establishing an expanded role for BI. That is, the role of BI in knowledge improvement. This expanded role also suggests that the effectiveness of a BI will, in the future, be measured based on how well it promotes and enhances knowledge, how well it improves the mental model(s) and understanding of the decision maker(s) and thereby how well it improves their decision making and hence firm performance. The need for the integration of KM and BI is clear.