What Exactly is Business Intelligence?

OLAP is that piece of the tool set that provides Dimensional Analysis, enabling huge volumes of data to be efficiently made available for exploration in a large variety of formats and arrangements.

The repository of high-volume data and the special methods for designing its storage was given the title of “Data Warehousing” (DW). Within the DW, a representation technique called “Dimensional Modeling” evolved, which is aimed at economic, context-based access (querying) of the immense tables held in the DW database.

Once the data has been captured and arranged in this way, through a process known as “Extract, Transformation and Load” (ETL), it can be passed through a further stage of processing that generates a “Cube”.

The Cube, in this context is actually another highly optimized form of storage in which the Dimensionally Modelled data can be pre-aggregated and cross-mapped for efficient retrieval and presentation to the user, who can enjoy parsing data at many levels of summarization moving quickly between almost limitless varieties of analysis.

Activities such as setting up multi-dimensional charts of data summary (known as “slicing and dicing”) or moving to lower levels of detail and back again to highly summarized versions (known as drill-down and drill-up), using tools to create graphical representations of the Cube data, with a great many formats from which to choose.

Employing yet other tools to perform sophisticated analyses, whereby trends and anomalies buried deep in the data may be discovered, understood and exploited (a technique called “Data Mining”). Data Mining models are created and refined to become sensitive to and resonant with the data patterns and can themselves be used to generate forecasts of future trends and movements within the tracked data. A veritable gold mine of such gems lies hidden and largely unexplored in the “exploding” mountains of data that have accumulated in companies since the price of storage came tumbling down.

It seems that IT organizations have been hanging onto data, keeping it in cold-storage, knowing that there will come a time when it will be of benefit. This is analogous to the hopefuls who upon departing this world, have their brain frozen, awaiting the emergence of technologies that can bring it back to life, perhaps with an artificial body. Business Intelligence is the technology that allows companies to unfreeze their data assets, bringing them back to a much more useful life than before. A New Era for Information Usage?

Early in the eighteenth century, inventors were making new discoveries about heat, energy and motion. There quickly evolved coal-fired, steam-driven locomotion (railways) and pumping engines (for the mines) and giant power plants for making every machine in a factory turn and churn incessantly. Spinning cotton, weaving cloth, cutting and shaping iron and then steel. The Industrial Revolution was born. Mills and factories sprung up all across the coal-rich fields of Northern England (this writer’s birthplace – although a little later).

From their long heritage of back-breaking land work, people seeking to earn a regular (monetary) income flocked to grasp the many new (but equally back-breaking) factory jobs that emanated from the urban sprawl of gleaming red-bricked labyrinths, that housed these awesome machines. Industrial empires were spawning all over and wealthy (already) magnates-to-be, stepped up to invest, build and rule over them.

What did they think of Business Intelligence? Of course, it seems unlikely that the term would ever have been uttered back then but, business empires had to managed somehow. If you could see those monolithic structures and enjoy the experience of visiting them, still churning and clunking, you may notice that almost every square foot of factory space was given over to production or storage of raw materials and finished goods. No room for desks and filing cabinets and, of course, no information technology; not even a telephone!

In one corner of the giant mill, you will see a well appointed office (where the owner would be found most of the time) and one or two nearby, less auspicious areas, being the workplaces of a couple of clerks, whose job was to record all the transactions of the business. Keepers of great leather-bound volumes of hand-written fiscal matters, committed to parchment but rarely revisited. So where was the “Decision Support System”? Where were the “Executive Information Systems” and “Balanced Score Cards”?

It was all there; all that was needed in those horse-drawn days, where real business took place between the various well-heeled mill owners over a mug of coffee or a mulled ale at some local tavern, gentlemen’s club or city-based mercantile gathering hall. The mill owner was kept informed of the production issues, inside his work-house, by visits from the foreman and kept his business knowledge up to scratch by his time spent over the tablecloths of his privileged meeting places. Intelligence was handled by “word of mouth”. Business deals were a handshake, followed by a letter, days or weeks later.

After the initial gold rush of mechanization, little changed for a long time; at least in terms of administration methods. Only after a slow but gradual increase in the number of non-production workers and the (mostly) record-keeping tasks they performed, would another unannounced “giant leap forward” occur, to irreversibly revamp the business scene once again.

Hail, Data Processing Due to regulatory requirements, statutory accounting practices and other external demands, together with a burgeoning management’s appetite for information, the ever-growing office spaces were becoming jammed with bursting-at-the- seems filing cabinets, filled with all manner of records of the company’s actions, transactions and anything else that mattered. All typed-in-triplicate, carbon-copied and filed in strict order (ready to be retrieved and hand-altered or joined by an extension or superseding entry.

Hot, clattering, manufacturing machinery had ushered in the Industrial Age and hot, clattering data processing machinery would now usher in the Information Age. Tabulators, card punches, paper-tape punches and prattling line printers were among the first commercially successful data processing machines. Rapidly progressing into electronic mainframe computers, humming, or even whistling musically (but still quite hot) and requiring huge rooms for their banks of hand-threaded core-memories (as much as 8 Kilobytes per cabinet), and looms of backplane wiring to connect central processor’s thousands of discreet components, soldered to hundreds of Bakelite circuit boards.

Strangely, this great revolution of number-crunching, heat-belching behemoths did little to shake up the world of business. Large corporations would quickly shell out millions for their first pride-and-joy, accompanied by the odd educational institution, here and there. However, vast swathes of less well endowed organizations held back, presumably seeing no threat of extinction as the consequence of not joining in the party for the second great era of industrialization.

Well maybe it is not so strange. The astute leaders of small to medium sized businesses (SMB’s) not known for “leaping before they look”, should be expected to play wall-flower, at least until the proposition looks sound, justifiable and absolutely necessary for survival. Today though, a mere sixty years on, it is hard to find any kind of business, of any shape, size or ethical standing, that does not have heavenly amounts of computing power, at every fingertip.

Bigger, faster, cheaper, more. So the years went by at the “speed of thought”, everyone got onboard and computer systems became as common in the workplace as steam-pipe
leaks, machinery-induced deafness and finger blisters had become in the cotton mill.

Actually, the “Technology” part of “Information Technology” (the “T” in IT) has come an incredibly long way since the days of machines peering through holes in cardboard (which, incidentally, was first conceived of by Industrial Revolution luminary, Jacquard, the inventor of the all-important weaving loom that bears his name).

Some software of today is also astronomically more advanced than that of the mid-twentieth century. Lamentably, it is, however, the “I” in IT that has not kept pace with the advances of electronics and related cost-performance ratios.

With some exceptions, corporate use of computers has essentially become locked into the business of record keeping; frozen solid in the first great ice-age of non-progressive wheel-spinning, running faster to stand still, quagmire, where huge budgets evaporate, just trying to keep up with the avalanche of necessary upgrades and replacements.

Is that the Cavalry I hear?

Having painted a grim picture of stagnation and nil return on investment, we have paved the way for the trumpeters and knights in shining armor. So the cost of storage has come down dramatically, the data we are holding there has ballooned dramatically, now must be the time to do something with it, dramatically.

Instead of just “record keeping”, let’s use all this computing power and endless data in ways that can make us better at what we do. How about introducing software that performs large-scale, sophisticated analysis. How about using that sophisticated analysis to help us make better decisions. How about using improved decision making to choose a better direction to go in and better direction to improve marketing efforts, customer experience, product investment, vendor selection, volume prediction, price setting, etc.

Let’s just call this whole new leap forward “Business Intelligence”.

Get more intelligent about business by seeing more clearly what we have done and what has been happening around us; by predicting where trends are heading and do all this by exploiting data we already have, tools we already own and brains that have not yet been put into deep freeze.

This all sounds good. Lets get started, “as soon as the movement hits critical mass”.

IS there anyone out there already using BI?

When the first great era of commercial computing began, there were early adopters and late adopters. The early adopters paid for all the R&D (as usual) and the tail-draggers paid with loss of market-share, employee job satisfaction and investor confidence. Well, not really; business and consumers were not so hurried, cost conscious or quick to change horses back then.

Today is a different story, however. Deals are canceled at contract signing, shoppers abandon their carts at the check-out, construction is halted on the first foreclosure and stock market indicators have not seen a flat line in years. Panic is the normal state-of-rest.

Businesses sink quickly and everyone is hoping that the next object that floats by will have an outboard motor, wings and booster rockets attached. One such vehicle is that broad set of capabilities currently flying under the banner of Business Intelligence.

Many companies have made a leap of faith and invested in a BI initiative. For some of those entities, valuable gains have been achieved. For others, the project has been fruitless, hard lessons learned and second attempts made from a different approach.

Compared to the early data processing efforts, today’s BI ventures are light years more advanced and equally more challenging. The potential for success is there for all qualified entrants and many have proved the point. Eventually, the deployment of BI will be as ubiquitous as the first generation of applications.

Just as every organization has implemented “passive” record-keeping applications of some sort or another, there will be a time when most will also have “active”, even “thinking” intelligent software that examines data, sniffs out issues, evaluates propositions, recommends actions and monitors results. If you detect a difference in those two scenarios, you are understanding the meaning of Business Intelligence.

There was a time when computers were depicted in entertainment media as futuristic and the stuff of science fiction. Now we can smile at all of that and, yes, there are differences between what novelists and screenwriters created and the more mundane, however clever, computers that support every aspect of our lives today.

Don’t forget, however, that the likes of HAL, C3P0 and R2D2 are seen in laboratories where artificial intelligence and other far-out technologies are constantly making progress. In our business world, we are not looking to replace people with thinking software, but with BI we can get people thinking better (with software).

BI may not be required or mandated for every type of organization; nor is it for the faint-of-heart; nor is it for the uninitiated (i.e. Those not understanding the issues). The separate MeasureGroup™ publication “Who needs BI?” can help an organization decide if it should, or should not, be looking at a BI initiative.

A summary of Business Intelligence

The following panel contains a summary of Business Intelligence in the form of a bullet list of the most significant attributes generally being assigned to this new but not-so-new technology that is going to be recognized one day as the “second great era of computing in business”.

Summary of the key aspects of Business Intelligence:

– Leveraging Data Assets to glean Insights otherwise unavailable
– Exploring Business Analytics in an almost endless variety of ways
– Gaining Competitive Advantage thru the Power of Knowledge
– Seizing Opportunities to improve Status and Profitability
– Enhancing Business Agility – First to Start – First to Finish
– Using Intelligent Questions to generate Intelligent Answers to generate Intelligent Questions…
– Enabling Proactive Management to replace Reactive Damage Control

In the early days of computers, many did not see a use for them. That was because they did not yet understand their capabilities. BI is at that same point now. BI is being enabled by a new set of software tools and technologies that are continuing to evolve.

Source by Derek Ashton

Popular Posts