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What Is Business Intelligence and Why Do We Need It?


Business Intelligence, what is it and why do we need it?

Business intelligence is the ability to make “fact based decisions” based on reliable, integrated, data.

Business intelligence leverages data to provide you with reports and information, and allows users to move away from “Hunch based decisions” to “Fact Based Decisions.”

Business intelligence can come from both transactional and analytical reports. But in the true sense of analytical, business intelligence the data is derived from an enterprise data warehouse. Designed correctly, we call it “The Truth Database.”

Business intelligence can arguably also be derived from “stove pipe” solutions. These are point solutions typically developed within a department to answer specific questions. It can also be argued that ERP reports provide business intelligence. Business intelligence can also be derived from reports that end users had to manually integrate in order to develop reports for management, buyers or others.

Various types of reports are delivered through different means. As purists, we believe
analytical business intelligence should be derived from the data warehouse. But again,
that doesn’t mean all reports are the same. We also recognize that even business intelligence reports, designed for managing the business are derived in a multitude of ways.

Do we really need Business Intelligence? Back in the 90’s business intelligence (BI) was
considered a “luxury.” That’s because building a data warehouse was very costly to build and BI tools were very expensive to license. Today, business intelligence is NOT a luxury, it is a necessity. Your competitors are understanding more about their business and therefore you must as well, in order to maintain your competitive advantage.

Companies in the 90’s built data warehouses to GAIN a competitive advantage. Today it’s needed just to MAINTAIN your competitive advantage. Those companies who were visionaries in the 90’s and recognized business intelligence as a way to achieve competitive advantage are the same companies today who are leveraging big data from other sources to GAIN a competitive edge.

At Relational Solutions we believe it's important to note that operational reports are not the same as Analytical reports. That will be described in my next blog. But this series of blogs will discuss the evolution of big data.

A true analytical, business intelligence application is designed to support management decisions. It includes reports that are derived from a single, queryable source, of reliable, integrated data, fed by a single staging area. It should have applicable business rules established for your business users. In an ideal world, business intelligence is derived from a data warehouse that is designed, based on the union of all marts. The presentation layer should offer fast access to information that’s easily understood by the end users.

Look for my next blog that describes the differences between transactional and analytical reports and delves deeper into the evolution of big data.



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