Introduction to Business Intelligence

Business Intelligence is one of the most important technologies in the 2020s.

What exactly is Business Intelligence?

That is what I am going to unleash in this article.

My name is P K Saxena.

I am CTO of Sofcon Systems India Pvt. Ltd.

Sofcon Systems India is having 27+ years of experience in the field of

Automation Solutions.

And now has started helping their clients in their migration path to Industry 4.0.

I have taken guidance from Eric Kimberling,

who is the CEO of Third Stage Consulting, an independent consulting firm.

That helps clients throughout the world with their Digital Transformation

journeys.

One of the technologies that Sofcon Systems would like to help their clients to

plan as well as to implement is Business Intelligence.

Business Intelligence is an important technology for organizations if they would

like to figure out any one

or all three queries given below:

How are they going to make better use of their data?

Also how are they going to predict the future?

Further how are they going to understand their business operations

and performance on daily basis?

I will discuss in detail about Business Intelligence

or BI

and also give its definition in this article.

What exactly Business Intelligence is?

How does it work?

How it might apply to your organization?

Why is BI so Important?

In order to understand why Business Intelligence

or BI is so important today to  organizations

we need to look at-

how we got to where we are today in the 2020s.

If we go back to the 1980s when organizations were really starting to first digitize

and computerize their operations,

there was a real focus on just capturing information.

There was no focus on efficiency gains or looking to the future

or Predictive Analytics

and all other stuff as we have got today.

It was more fundamentally focused on just capturing data

and storing that data digitally within computer systems.

Therefore over the years

or over the last several decades organizations have been

stockpiling only raw data.

Organizations have largely been moving from system to system over the years

and along the way they have brought the data with them in many cases.

And that is leaving organizations with a huge amount of data

that they are sitting on today.

Information

Conversion of raw data to useful information was done by team of managers.

Now when we fast forward to today and look at various types of technologies

and look at the data that is being captured,

then we observe that data collection

and data capture trend is growing exponentially.

Because we have Internet of Things (IoT).

As well as we have smart sensors installed on shop floors.

Also we have data being captured in Warehouses.

Further we have e-Commerce systems

that are capturing information about our customers.

And of course, we still have our back office ERP systems, Financial Systems

and other technologies like that

which are busy in collecting data on daily basis.

In addition to having data

that has been starting to be captured back in the 1980s,

today we have cloud technology

that is capturing data at an even faster speed.

Cloud & Data

Cloud technologies are capturing data in ways

that other On-premise systems had not been able to in the past.

For this reason Organizations are now sitting on tons of information.

They are capturing data every day

and they need to make sense of each data.

Thus the data is of different variety.

There is internal data which relates with their operations,

with their financials and

also with their inventory levels.

There is also external data which relates with their customers

as well as with their suppliers.

This bunch of data that they are capturing belongs to their supply chain

mechanism.

All types of data can be bifurcated in two parts–

structured

and unstructured data.

Historically structured data would be quantitative

and predictable type of data.

Whereas unstructured data are things like social media posts

or social media interactions with your brand.

This type of unstructured data has value

if you can make use of it

otherwise it can be discarded.

To this end the key to Business Intelligence is taking all this

massive amount of data

and figuring out how to make use of it.

How to turn this massive amount of data from data into information?

That we can use as managers to make decisions,

to run our businesses better and

to render better service to our customers

is part of Business Intelligence

or BI.

In fact the organizations that are best able to do

that are the ones that effectively leverage Business Intelligence tools.

And that is what I will be discussing in this article.

Financial Consolidation

The first and the most fundamental use of Business Intelligence is in the area of

Financial Consolidation.

When you look at organizations especially multinationals

or multi-site locations

which are operating across a variety of industries

or in a variety of markets,

then we find that they have a need to take all of their data,

all of their financial information,

all of their transactional information

and roll it  up

and consolidate it to a set of financial results.

Historically tools are available such as

Enterprise Performance Management tools

or Financial Reporting tools for Financial Consolidation.

For example Oracle is a vendor

that is very well known for their Business Intelligence

and their Performance Management

or Financial Consolidation capabilities.

We have had technologies for a while

that have allowed organizations to consolidate

this financial information

at the most fundamental level

but Business Intelligence looks at historic information to get

the fundamental financial performance of an organization.

KPIs and Dashboards

Now if we build on this whole concept of Financial Consolidation

and look at our entire operations more broadly

that brings us to the point of KPIs

or Key Performance Indicators

and Dashboards

and that is something

that Business Intelligence tools are designed to do effectively.

Dashboard

So what is a Dashboard?

In fact it is a screen that you would go to

and look at various KPIs

or Key Performance Indicators metrics

that are important to the organization.

Indeed these Dashboards and the KPIs

that fit within those dashboards might vary from

department to department or

location to location or

even among individuals or

different managers within an organization.

Thus they may have different dashboards,

different data sets

that they need to look at to understand their operations and

also look to the future

and make decisions about the future.

In short Business Intelligence tools start at the top of the organization.

When we look at Financial Consolidation,

as we discussed earlier in this article,

is sort of the highest top level Business Intelligence results which you can get.

What Dashboards and KPIs do is look at providing meaning behind the numbers

and providing more real-time quantitative data,

as it relates to operations, as it relates to inventory levels,

as it relates to what your customers are doing,

how they are interacting with your brand

and how people are responding to your marketing messaging.

These are some of the examples of metrics

that can be part of a dashboard.

And these dashboards get rolled out

or sort of cascade down throughout an organization.

To summarize the best Business Intelligence tools are the ones

that provide you the flexibility to manipulate data

and to provide different KPIs

and Dashboards based on the needs of each individual

or group within your organization.

Predictive Analytics

Another emerging and very popular aspect of Business Intelligence is Predictive

Analytics.

Hence what Predictive Analytics does?

In fact it takes the first two things, we discussed about,

Financial Reporting and Dashboards

and then goes one step further and

starts to look to the future.

Rather than looking in the rear view mirror at what happened in the past

or even just looking at what is happening right now,

Predictive Analytics try to take that historic data

and statistically quantify

and predict what will happen in the future?

One common example of Predictive Analytics would be something that is

actually been around for a while which is demand forecasting.

To illustrate let us look at what customer demand is

likely to do

in the coming years,

in the coming months

and in the coming weeks?

What the seasonality might look like?

How macro-economic trends might impact overall demand?

To summarize Predictive Analytics is a way to take all that data

that organizations have accumulated,

make sense of it

and look to the future to help predict

what will likely to happen in the future.

When you think about Business Intelligence,

it is important to think of it not just as historic reporting

but also looking at the Predictive Analytics component of it

to really harness the power of what the analytical tools can do

to predict the future.

Data Warehousing

At last, all the stuff I have discussed about so far sounds great in theory

but the key to it is one missing link

which is Data Warehousing.

In particular a Data Warehouse is essentially taking data from multiple sources

and housing it in a central database

that can then be used to provide inputs into a Business Intelligence tool

to provide the reports,

the Dashboards,

the Predictive Analytics

and all the things I have discussed about so far.

Why Data Warehouses are so important?

Because most organizations do not have just one system

that houses all this data.

Most organizations have multiple systems.

They might have a core financial system

that manages the finance

and accounting.

Also they might have another system

that manages the warehouse,

another system that tracks data

and information on the shop floor.

You are going to have information coming from your e-commerce system.

All these different systems are capturing data

and they are capturing data in silos.

As well as in order for Business Intelligence to do its job

and to provide a complete view of your entire operations,

you need all that data from multiple systems to end up in one place

and that is what a Data Warehouse does.

In brief it houses the data from multiple sources

so that the Business Intelligence tool can pull

the required data from Data Warehouse

to provide the reports in dashboards

and do analytics

that I have discussed here in this article.

Types of BI tools

Moreover the good news with Business Intelligence is

that it has grown so much over the years

as well as there is such high demand for good Business Intelligence

that you do have a lot of different options to choose from.

To this end you certainly have

your traditional Enterprise Resource Planning systems or your CRM or

HR types of systems,

as well as other different technologies

that automate business processes

and provide a limited amount of Business Intelligence

then if you are investing in any modern cloud-based technology

chances are pretty high

that it has some level of Business Intelligence,

Analytics

and Reporting etc. too.

BI Tools

To begin with, the most powerful BI tools are the ones

that are designed just to do Business Intelligence so there is a whole category of

technologies out there that are called Business Intelligence tools products such

as Microsoft Power BI.

Moreover there is also Tableau Software

which is another very common BI tool

to provide Business Insights.

Although there is actually a lot of different systems out there which provide

capabilities like that.

However I have given here just two examples.

In fact Eric Kimberling has created a video for top 10 Business Intelligence

Systems so I encourage you to check that out on Eric’s YouTube channel vide

https://www.youtube.com/watch?v=8lBBgr5VSO0 .

In any case the key here is to understand

that you have a whole lot of options

and just because you are implementing a certain type of technology like an

ERP system or a CRM system,

it does not necessarily mean

that it is going to have the Business Intelligence tools

and capabilities that you need.

In fact the standalone Business Intelligence tools are great for situations where

you are investing in new technology

as well as you want to add to the Business Intelligence capabilities.

But even if you are not investing in a whole host of new technologies

and you are working off legacy systems that are already in place

then also you should opt for standalone Business Intelligence tool.

Particularly Business Intelligence is actually a great way to maximize

and leverage the data

that you are capturing in those older systems.

ROI

In fact I find that many organizations get more of an ROI from Business

Intelligence tools

than they do from investing in core back office systems like

ERP systems or Supply Chain Management systems.

So the key here is to understand what your priorities are

and know them when you are going through your digital strategy and planning.

You should just understand what kind of tool is going to give you the Business

Intelligence that you need

and are looking for within your organization now despite all the benefits of

Business Intelligence

that I have discussed in this article.

The Challenges of BI

There are challenges to getting the most value out of Business Intelligence tools.

For example, your Business Intelligence tools are only as good as your data sets.

So if you have dirty data or

the data is corrupt or

it is inaccurate

then your Business Intelligence tool is going to reflect that inaccuracy.

You also have the challenge

that organizations have massive amounts of data

so in addition to cleansing the data

and making sure that the data is accurate,

you also have to deal with the fact

that you have a massive amount of data

and that is also one of the major challenge.

Most organizations are sitting on multiple systems

that are housing a massive amount of data.

Most organizations just do not know what to do with that massive amount of

data.. This is also one kind of challenge.

The key to Business Intelligence working well is to know exactly

where that data resides and

how you are going to map it and

bring it over to the Data Warehouse to support your Business Intelligence

and reporting needs.

If you are implementing new technologies like ERP or

Supply Chain management or CRM,

you are going to have to migrate the data from your old system to these new

systems and then figure out how that new data that has been brought over to

your new systems is then going to fit in and interact with your Business

Intelligence tools.

That is another challenge and it is just migrating the data from legacy systems to

either new back office systems or to a data warehouse that can support Business

Intelligence.

Conclusion

Altogether implementation of Business Intelligence in your plant can be

a pretty time consuming

and a very exhaustive effort.

Summing up then finally but not the least importantly,

whenever you are deploying a new Business Intelligence tool

that entails a cultural change for taking a step in the direction of becoming a

more data-driven organization with better visibility

then you have to take special care in its implementation.

In brief Business Intelligence or BI helps in using data

to make future predictions

and also to plan for the future.

In that case it requires a mind-set shift for a lot of your employees

and a lot of the team members.

So as to ensuring and having the right organizational change,

migration plan

and strategy for your people side of the equation is very important

when it comes to Business Intelligence.

I hope this has given you some good insights into understanding

what Business Intelligence is.

For more information on Business Intelligence including how it fits into

Digital Transformation

as well as to know independent ratings of the different

Business Intelligence tools out there,

I encourage you to download

Third Stage Consulting group’s annual Digital Transformation report vide

 https://resource.thirdstage-consulting.com/2021-digital-transformation-report .

This guide provides you all the best practices

you need to make your project successful

and also provides additional background information

or research to help you in your decision process.

So I hope you found this information useful.

By Digital Prabhat

Resource: Eric Kimberling-What is Business Intelligence?

Third Stage Consulting Group

www.thirdstage-consulting.com