Relational Solutions Blog

Transactional versus Analytical Business Intelligence

Posted by Janet Dorenkott

Fri, Aug 23, 2013 @ 01:37 PM

Applications that Run Your Business vs. Manage Your Business

The easiest way to understand the difference between a transactional and analytical system is to think of transactional systems as those applications designed to run your business and analytical systems are those designed to manage your business.

Applications like SAP, Oracle Financials, JD Edwards and JDA for example, are transactional applications. They provide reports, but they tend to be reports from their systems unless you separately acquire their data warehouse modules. In most cases, even their data warehouse modules handle their own data better than other data sources. In general, ERP (Enterprise Resource Planning) systems are systems that are modeled for data entry. They are updated constantly throughout the day.

Reports derived from these systems are reports designed to understand what is going on at this moment. For example, what time did my last truck leave? Is my manufacturing formula set correctly today? What did that last customer complain about? They answer the "What?" not the "What if?" questions. 

These are transactional reports, coming from transactional systems. They are necessary reports required to run your day to day operations. A report pulled from a transactional system at noon will produce different results than a report pulled at 12:01 because the operational system is constantly changing. Even reports pulled symotaneously will likely produce different results. That is because in a transaction system, the route of each query can take different paths. In addition you never know who might be updating the system at any one point in time. 

We call this the “twinkling database effect.” That is because the data is constantly changing.

These “twinkling databases” are fine for pulling operational reports. But trying to produce an analytical report from a transactional system is not wise.

First, the data is formatted for data entry, not data retrieval. Therefore it could can take days to query the system. In addition, an ad-hoc query against a transactional system will effect the performance of that operational system. It will also negatively effect end users using the system. The last thing you want to do is make it difficult for people to enter orders. This could have a direct and negative impact on sales. Not to mention the negative, time wasting effect it will have on other job functions.

Analytical queries against a transaction system will put an undue burden on your network. In addition, it will return inconsistent, and often times, inaccurate results.

That is why data warehouse solutions became a necessity. Transaction systems are designed to RUN the business, data warehouses are designed to help MANAGE the business.

The data warehouse is modeled in a way that business users can easily find and retrieve the data they need. The underlying infrastructure of an enterprise data warehouse (EDW) offers an architecture that will align data, provide business rules and accommodate growth and change in an iterative manner.

Query tools allow for easy analysis and business intelligence. Users need fast access to reliable information with the flexibility to change the view. They need to be able to drag, drop, drill, sort, compare and ultimately learn and act on the information they are receiving.

More and more, we are hearing business analysts referred to as “Data Scientists.” This is because today, they should have the capability to think outside the box with information available to them. Rather than spending their day gathering and cobbeling together reporting information, they can be freed up to analyze it. Today, data integration can be automated and put into a usable format for data exploration.

By leveraging ALL your data, companies and their Data Scientists can understand not only WHAT is happening, but WHY!

The data warehouse is fed by the operational system and typically updated on a nightly
basis. Sometimes more often but most often, nightly. More and more, we see the data warehouse is also being fed by other outside sources. Relational Solutions advocates leveraging all the information you have access to. Unfortunately, not all data warehouses are created equally, so it's not always as easy as it sounds.

I’m pointing out these differences because this all background information needed to understand how companies can use big data. Big data creates a potentially “fuzzy area” for reporting depending on how it’s defined.

In my next blog I'll explain the difference between data marts and data warehouses, and how evolving data sources such as "big data," should be leveraged in your enterprise data warehouse and offer more business intelligence.



Topics: Business Intelligence, Big Data, Data Warehousing, Demand Signal Repository


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