Description
Need for Business Intelligence
This White Paper is for informational purposes only. WISDOM INFOTECH MAKES NO WARRANTIES, EXPRESS,
IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS DOCUMENT.
Wisdom InfoTech
Need for Business Intelligence
INFORMATION AT YOUR FINGER TIPS
May 2007
Wisdom InfoTech
18650 W. Corporate Drive
Suite 120
Brookfield WI 53045
Phone: 262-792-0200
Fax: 262-792-0202
E-mail: [email protected]
ABRAHAM PABBATHI
Principal Consultant – BI Practice
May 2007 A white paper on the need for Business Intelligence
Page 2 of 8
TABLE OF CONTENTS
BUSINESS INTELLIGENCE....................................................................................................................................3
TOP 10 SIGNS YOUR COMPANY MIGHT REQUIRE A BI SYSTEM.............................................................3
WHAT IS A BI SYSTEM? .........................................................................................................................................4
COMPONENTS OF A TYPICAL BI SYSTEM.......................................................................................................5
APPROACH TO BUILDING A BI SYSTEM..........................................................................................................7
May 2007 A white paper on the need for Business Intelligence
Page 3 of 8
Business Intelligence
Over the years with increasing globalization the business landscape has grown larger, more
diverse, more competitive and more complicated. To survive in this treacherous landscape,
businesses need to be smart, flexible and responsive to changes in the market. Till now
businesses have only concentrated on capturing data and using it to run their day to day
operations. But of late businesses have been leveraging the data that they have collected over
the years to study market trends to help them adjust to the fast changing business environment.
This analysis of stored data to discover patterns and trends is known as Business Intelligence
and its delivering rich dividends to businesses in terms of better insight into market trends and
the factors affecting the performance of their businesses which in turn gives them a competitive
advantage.
Top 10 Signs your company might require a BI System
O
Inability to access data quickly and easily:
Typically if you want to know the latest sales numbers you need to call your sales
manager who in turn needs to dig through a bunch of spreadsheets on her laptop to
come up with the numbers. You don’t have easy to use reporting tools.
O
Inability to perform in-depth analysis:
Although you have a report which gives you the total sales at each of your territories
you don’t have an easy way to figure out which products are doing good in each of
those territories. You don’t have the tools to analyze your data.
O
Data scattered over multiple systems:
Your Sales data is stored in an MS-SQL Server database while your production data
is stored in an oracle database and you don’t have a way to combine the data from
these two databases into one report.
O
Historical data not available:
You remove all data older than 2 years from your databases. Hence you cannot run a
trend report to see how your sales did over the past 5 years.
O
Lack of data privacy and security:
You don’t have a way to apply restrictions on the data seen by different employees.
You don’t have a way to securely share your data with your customers and partners.
O
Inability to comply with Government Regulations:
You plan to go public some day but you don’t have the infrastructure to support all the
government reporting requirements that you need in order to go public.
O
Inability to compare performance against goals:
You have set strategic goals for your company but you are unable to track your
performance on a daily basis to see if your company is on track to achieving the
desired performance goals.
O
Inability to track key performance indicators (KPI):
You want to track certain key performance indicators of your business but you don’t
have an easy way to do it with your existing reporting system.
May 2007 A white paper on the need for Business Intelligence
Page 4 of 8
O
Inability to use Data to facilitate decisions making process:
Your business decisions are based on your gut feeling rather than facts. You are
unable to derive information out of the data that you have in your databases to help
you in your decision making process.
O
You are losing market share:
You are slowly losing market share to your competitors. You are unable to manage
your resources to the optimum level to achieve maximum efficiency in the way you do
your business.
What is a BI System?
Business intelligence (BI) is a Business Management term which refers to the services,
applications and technologies that enable organizations to gather, manage and analyze data,
transforming it into usable information which helps them to make better decisions.
The example below shows how analyzing the sales numbers against targets helps you to
concentrate your energies on the most pressing problems at hand.
Figure 1: Analyzing Sales Number Example
At the core BI provides query, reporting, and analysis capabilities. It provides Dashboards and
other visualization techniques which help users to quickly get an understanding of the position
of the business. This is complemented by data quality and data integration services which help
in consolidating data from multiple sources.
The Figure 2: Dashboard Example below shows how a typical dashboard for hotels business
looks like.
May 2007 A white paper on the need for Business Intelligence
Page 5 of 8
Figure 2: Dashboard Example
The Advanced analysis capabilities provided by BI can help users to view data across multiple
dimensions (for example: product, geography, customer, time etc.) and slice-and-dice the data
to look at various combinations, such as the sales of certain product in all geographic locations
in certain year and quickly switch to seeing the sales of all products in a particular geographical
location during the same year. Advanced analysis functionality also enables organizations to
define hierarchies so, for example, sales could first be viewed for each year and then the user
could drill down to view the sales in each month in certain year and consequently drill down to a
particular week of a month. All these operations can be done with the click of a mouse button.
These advanced analysis capabilities make it easy to compare the results of one time period
with that of another, so this year’s sales can be compared with sales of a previous year across
geography, customer, and salesperson. BI also provides capabilities which allow predictive
analysis to discover hidden patterns and enable what-if analysis.
Components of a typical BI System
The Figure 3: Components of Business Intelligence System below shows the important
components that go into building a robust BI system.
May 2007 A white paper on the need for Business Intelligence
Page 6 of 8
Figure 3: Components of Business Intelligence System
On the left we show your existing database systems which might be in RDBMS, Mainframes or
Spreadsheets. The arrows show the flow of data out of the existing database systems into the
components of the BI system. Each of the components are sold separately and need to be
installed and tied together to create a BI system. Below each component we have mentioned
the popular vendors who build that particular BI component. Below is the description of each of
the BI components.
Data Integrator: This is a specialized software tool (also called ETL tool) which can extract data
from varied systems like RDBMS, Mainframe and spreadsheets and load the consolidated data
into a “data warehouse”. ETL tools also take care of “cleaning” the data if the data in the source
systems is bad. By “cleaning” we mean removing duplicated data, correcting name/address
data and the like.
Data Warehouse: The database where all the important data from an analysis stand point is
stored. Selected data from the existing databases systems (OLTP systems) is collected and
loaded into this database. This database could be loaded with fresh data weekly, daily or real-
time depending on the user’s requirements.
OLAP Engine: OLAP stands for “On-Line Analytical Processing”. Certain specialized software
tools called OLAP tools provide the capability to run reports which have slice and dice, drill
down and drill through capabilities. Typically these tools would build another database on top of
the data warehouse called the multi-dimensional cube (a highly de-normalized database) to
allow for quick query response. These reports are used by Business managers to analyze the
company’s performance and also to forecast future performance.
May 2007 A white paper on the need for Business Intelligence
Page 7 of 8
Reporting Tool: Reports are built on top of the data warehouse using special Reporting tools.
These tools can provide pre-built reports (canned reports) which could be refreshed as per
certain schedule or give the users the capability to build their own reports (ad-hoc reports).
Typically these kinds of reports are required by middle level managers to run the operations.
Digital Dashboard: This is again provided by yet another type of software tool which allows for
building reports which are easy to comprehend and allow for visualizing the data in the data
warehouse in different formats, for example Charts, Gauges, and Alerts. Typically these reports
would report all the key performance indicators of the business on one page so that the
executive managers can understand the health of the business with one glance of the report.
Approach to building a BI System
Building a complete business intelligence system spanning over all the departments/business
processes of the enterprise can turn out to be an expensive proposition. But it is not necessary
that you implement the BI System for the entire enterprise in one go. A good approach would be
to implement the system for one department/business process at a time. You add more
departments/business process to your BI system as your company grows and expands. This
way the cost to build the BI system is more manageable and the lessons learnt during one
implementation can be leveraged during the next implementation. Each cycle of implementation
will have the below mentioned phases.
Figure 4: Approach to build BI System
Initiate: This is the most important phase of implementing a BI system as it sets the course for
the rest of the process of building the BI system. In this phase we would set the course for the
BI System by defining a road map. This will be a guide in deciding which business processes
would be incorporated into the BI system and in what sequence. Typically we would want to
divide all the business processes in the enterprise into 3-4 groups and attempt at building the BI
system for one group at a time. This way we would be able to cover all the business processes
in 3-4 cycles. Once we have narrowed down the scope for the first cycle to a group of business
processes we would identify the users who are involved with the business process who would
be the first to start using the BI system. Next we need to survey the market and decide on the
software and hardware technologies which would serve the needs of the BI System best.
May 2007 A white paper on the need for Business Intelligence
Page 8 of 8
Plan: In this phase we execute the typical steps we would do in any IT project. First we make a
project plan followed by Requirements analysis. Once the requirements analysis is done we
would proceed with designing of the system.
Build: In this phase we actually build the system and unit test all the components built.
Test: In this phase we conduct various tests like System Test, Load Test and User Acceptance
Test on the BI system. Once the system passes all the above mentioned tests, we plan the
deployment of the system into production environment.
Deploy: In this phase we install the BI System in production environment followed by user
training so the users know how to use the system. Finally we also setup a support team for the
application and train them in handling issues which may arise in the system during the course of
its usage.
The above mentioned steps are followed for each cycle of implementation of the BI system.
doc_404247421.pdf
Need for Business Intelligence
This White Paper is for informational purposes only. WISDOM INFOTECH MAKES NO WARRANTIES, EXPRESS,
IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS DOCUMENT.
Wisdom InfoTech
Need for Business Intelligence
INFORMATION AT YOUR FINGER TIPS
May 2007
Wisdom InfoTech
18650 W. Corporate Drive
Suite 120
Brookfield WI 53045
Phone: 262-792-0200
Fax: 262-792-0202
E-mail: [email protected]
ABRAHAM PABBATHI
Principal Consultant – BI Practice
May 2007 A white paper on the need for Business Intelligence
Page 2 of 8
TABLE OF CONTENTS
BUSINESS INTELLIGENCE....................................................................................................................................3
TOP 10 SIGNS YOUR COMPANY MIGHT REQUIRE A BI SYSTEM.............................................................3
WHAT IS A BI SYSTEM? .........................................................................................................................................4
COMPONENTS OF A TYPICAL BI SYSTEM.......................................................................................................5
APPROACH TO BUILDING A BI SYSTEM..........................................................................................................7
May 2007 A white paper on the need for Business Intelligence
Page 3 of 8
Business Intelligence
Over the years with increasing globalization the business landscape has grown larger, more
diverse, more competitive and more complicated. To survive in this treacherous landscape,
businesses need to be smart, flexible and responsive to changes in the market. Till now
businesses have only concentrated on capturing data and using it to run their day to day
operations. But of late businesses have been leveraging the data that they have collected over
the years to study market trends to help them adjust to the fast changing business environment.
This analysis of stored data to discover patterns and trends is known as Business Intelligence
and its delivering rich dividends to businesses in terms of better insight into market trends and
the factors affecting the performance of their businesses which in turn gives them a competitive
advantage.
Top 10 Signs your company might require a BI System
O
Inability to access data quickly and easily:
Typically if you want to know the latest sales numbers you need to call your sales
manager who in turn needs to dig through a bunch of spreadsheets on her laptop to
come up with the numbers. You don’t have easy to use reporting tools.
O
Inability to perform in-depth analysis:
Although you have a report which gives you the total sales at each of your territories
you don’t have an easy way to figure out which products are doing good in each of
those territories. You don’t have the tools to analyze your data.
O
Data scattered over multiple systems:
Your Sales data is stored in an MS-SQL Server database while your production data
is stored in an oracle database and you don’t have a way to combine the data from
these two databases into one report.
O
Historical data not available:
You remove all data older than 2 years from your databases. Hence you cannot run a
trend report to see how your sales did over the past 5 years.
O
Lack of data privacy and security:
You don’t have a way to apply restrictions on the data seen by different employees.
You don’t have a way to securely share your data with your customers and partners.
O
Inability to comply with Government Regulations:
You plan to go public some day but you don’t have the infrastructure to support all the
government reporting requirements that you need in order to go public.
O
Inability to compare performance against goals:
You have set strategic goals for your company but you are unable to track your
performance on a daily basis to see if your company is on track to achieving the
desired performance goals.
O
Inability to track key performance indicators (KPI):
You want to track certain key performance indicators of your business but you don’t
have an easy way to do it with your existing reporting system.
May 2007 A white paper on the need for Business Intelligence
Page 4 of 8
O
Inability to use Data to facilitate decisions making process:
Your business decisions are based on your gut feeling rather than facts. You are
unable to derive information out of the data that you have in your databases to help
you in your decision making process.
O
You are losing market share:
You are slowly losing market share to your competitors. You are unable to manage
your resources to the optimum level to achieve maximum efficiency in the way you do
your business.
What is a BI System?
Business intelligence (BI) is a Business Management term which refers to the services,
applications and technologies that enable organizations to gather, manage and analyze data,
transforming it into usable information which helps them to make better decisions.
The example below shows how analyzing the sales numbers against targets helps you to
concentrate your energies on the most pressing problems at hand.
Figure 1: Analyzing Sales Number Example
At the core BI provides query, reporting, and analysis capabilities. It provides Dashboards and
other visualization techniques which help users to quickly get an understanding of the position
of the business. This is complemented by data quality and data integration services which help
in consolidating data from multiple sources.
The Figure 2: Dashboard Example below shows how a typical dashboard for hotels business
looks like.
May 2007 A white paper on the need for Business Intelligence
Page 5 of 8
Figure 2: Dashboard Example
The Advanced analysis capabilities provided by BI can help users to view data across multiple
dimensions (for example: product, geography, customer, time etc.) and slice-and-dice the data
to look at various combinations, such as the sales of certain product in all geographic locations
in certain year and quickly switch to seeing the sales of all products in a particular geographical
location during the same year. Advanced analysis functionality also enables organizations to
define hierarchies so, for example, sales could first be viewed for each year and then the user
could drill down to view the sales in each month in certain year and consequently drill down to a
particular week of a month. All these operations can be done with the click of a mouse button.
These advanced analysis capabilities make it easy to compare the results of one time period
with that of another, so this year’s sales can be compared with sales of a previous year across
geography, customer, and salesperson. BI also provides capabilities which allow predictive
analysis to discover hidden patterns and enable what-if analysis.
Components of a typical BI System
The Figure 3: Components of Business Intelligence System below shows the important
components that go into building a robust BI system.
May 2007 A white paper on the need for Business Intelligence
Page 6 of 8
Figure 3: Components of Business Intelligence System
On the left we show your existing database systems which might be in RDBMS, Mainframes or
Spreadsheets. The arrows show the flow of data out of the existing database systems into the
components of the BI system. Each of the components are sold separately and need to be
installed and tied together to create a BI system. Below each component we have mentioned
the popular vendors who build that particular BI component. Below is the description of each of
the BI components.
Data Integrator: This is a specialized software tool (also called ETL tool) which can extract data
from varied systems like RDBMS, Mainframe and spreadsheets and load the consolidated data
into a “data warehouse”. ETL tools also take care of “cleaning” the data if the data in the source
systems is bad. By “cleaning” we mean removing duplicated data, correcting name/address
data and the like.
Data Warehouse: The database where all the important data from an analysis stand point is
stored. Selected data from the existing databases systems (OLTP systems) is collected and
loaded into this database. This database could be loaded with fresh data weekly, daily or real-
time depending on the user’s requirements.
OLAP Engine: OLAP stands for “On-Line Analytical Processing”. Certain specialized software
tools called OLAP tools provide the capability to run reports which have slice and dice, drill
down and drill through capabilities. Typically these tools would build another database on top of
the data warehouse called the multi-dimensional cube (a highly de-normalized database) to
allow for quick query response. These reports are used by Business managers to analyze the
company’s performance and also to forecast future performance.
May 2007 A white paper on the need for Business Intelligence
Page 7 of 8
Reporting Tool: Reports are built on top of the data warehouse using special Reporting tools.
These tools can provide pre-built reports (canned reports) which could be refreshed as per
certain schedule or give the users the capability to build their own reports (ad-hoc reports).
Typically these kinds of reports are required by middle level managers to run the operations.
Digital Dashboard: This is again provided by yet another type of software tool which allows for
building reports which are easy to comprehend and allow for visualizing the data in the data
warehouse in different formats, for example Charts, Gauges, and Alerts. Typically these reports
would report all the key performance indicators of the business on one page so that the
executive managers can understand the health of the business with one glance of the report.
Approach to building a BI System
Building a complete business intelligence system spanning over all the departments/business
processes of the enterprise can turn out to be an expensive proposition. But it is not necessary
that you implement the BI System for the entire enterprise in one go. A good approach would be
to implement the system for one department/business process at a time. You add more
departments/business process to your BI system as your company grows and expands. This
way the cost to build the BI system is more manageable and the lessons learnt during one
implementation can be leveraged during the next implementation. Each cycle of implementation
will have the below mentioned phases.
Figure 4: Approach to build BI System
Initiate: This is the most important phase of implementing a BI system as it sets the course for
the rest of the process of building the BI system. In this phase we would set the course for the
BI System by defining a road map. This will be a guide in deciding which business processes
would be incorporated into the BI system and in what sequence. Typically we would want to
divide all the business processes in the enterprise into 3-4 groups and attempt at building the BI
system for one group at a time. This way we would be able to cover all the business processes
in 3-4 cycles. Once we have narrowed down the scope for the first cycle to a group of business
processes we would identify the users who are involved with the business process who would
be the first to start using the BI system. Next we need to survey the market and decide on the
software and hardware technologies which would serve the needs of the BI System best.
May 2007 A white paper on the need for Business Intelligence
Page 8 of 8
Plan: In this phase we execute the typical steps we would do in any IT project. First we make a
project plan followed by Requirements analysis. Once the requirements analysis is done we
would proceed with designing of the system.
Build: In this phase we actually build the system and unit test all the components built.
Test: In this phase we conduct various tests like System Test, Load Test and User Acceptance
Test on the BI system. Once the system passes all the above mentioned tests, we plan the
deployment of the system into production environment.
Deploy: In this phase we install the BI System in production environment followed by user
training so the users know how to use the system. Finally we also setup a support team for the
application and train them in handling issues which may arise in the system during the course of
its usage.
The above mentioned steps are followed for each cycle of implementation of the BI system.
doc_404247421.pdf