Skip Ribbon Commands
Skip to main content

Business Intelligence: Making Sense of a Data-Rich Business World


Business Intelligence (BI): what’s not to love about those two words being used together? The term implies the application of intelligence to business, but of course, there’s a bit more to it than that.

In most organizations, business processes such as manufacturing, sales invoice processing, etc. are powered by software. Most business would not be able to do what they do without functional business applications supporting key activities. These applications are generally referred to as operational or transactional systems.

As important as they are, most operational systems have some limitations, namely:

  1. Operational systems are typically ‘single purpose.’ For example, a point-of-sale application is specifically built to streamline customer service in a retail organization. A human resources application is designed to manage staff. But neither the point-of-sale nor human resource system can see the other’s data to compare sales volume to staffing, for example.

  2. Operational systems are typically not designed for reporting and analysis. Although operational systems collect a vast amount of data, it is often difficult to make good use of the data because the systems are not designed for efficient reporting, but to efficiently process transactions.

  3. Operational systems are helpful for looking back, but not forward. Operational systems often have sophisticated reporting and analysis comparisons of prior-period data, but they are not much help in forecasting results.

BI solutions were created to address these shortcomings.

The Challenge: How Do We Make Sense of All the Data We Have?

BI is a combination of software components and underlying technologies that allow organizations to consolidate data from a number of operational systems and data sources (internal and external), transform the data into meaningful information and provide the information to managers in a way that allows them to easily view and manipulate it to support decision making.

That’s a big concept, but what it really comes down to is that BI supports an organization’s transition from being data rich and information poor to information rich and capable of better, fact-based decision making. Recent economic realities have highlighted the importance of senior management having this operational and financial information at their fingertips. An effective use of BI should ensure the right information is available to the right decision makers at the right time.

Business Intelligence is a Management Initiative, Not an IT Initiative

IT should not lead BI projects. Although IT is an extremely important player, the initiative should be driven by the business. BI is one of the most robust managerial initiatives that smart managers can employ to help their organizations create more value for shareholders. Other initiatives include activity-based costing / management, economic value creation and the balanced scorecard.

A Six-Step Approach to Successful Implementation of a Business Intelligence Solution

We recommend a six-step approach to successfully implement BI:

  1. Identify what needs to be addressed with a BI solution. A successful initiative can't exist in a vacuum; it must be linked to business strategies and goals.
  2. Identify the multiple data sources that currently exist within the organization. Most organizations are drowning in data kept in multiple databases, spreadsheets and flat files. To build a solid BI system, it is essential that an organization identify all the data sources it currently has.
  3. Extract, transform and load (ETL) data to create a subject-oriented multidimensional cube. Information critical to fully understanding a particular customer may be stored in different databases. To create a customer subject-oriented knowledge repository, a BI solution needs to use the ETL process to ensure all relevant customer information is brought together and made consistent.
  4. Choose a reporting engine (such as Cognos Active Reports, Excel, PowerViewer, , Cliqview, etc.) to view and analyze the multidimensional cubes created by the ETL step.
  5. Create standard reports and undertake ad hoc analysis and data mining to gain insights into the key drivers of corporate performance.
  6. Plan an enterprise-wide deployment to ensure that the right decision makers have the right information whenever and wherever they need it.

Business Intelligence Gives Organizations an Edge over the Competition

BI is an enterprise-wide strategy that supports reporting, analysis and decision making on multiple levels. It supports organization-wide analysis, which in turn leads to insight, action and the proper measurement of results. The BI approach has been successful at giving many leading companies an edge over the competition because it brings people and technology together to solve business problems using a fact-based approach.