A Process-Centric Approach to Business Intelligence

BI Review Online, January 8, 2007

Colin White

Vendors and analysts often talk about the need to make business intelligence (BI) process-centric. Despite this ongoing discussion, there is no clear definition of process-centric BI, and little has been written about its benefits compared to a data-centric approach. This situation gives me the opportunity to hopefully clarify matters by offering my perspective on this topic.

When designing and deploying IT applications, operational business transaction application developers have a different mind-set from BI developers. Business transaction developers define applications in terms of the business processes they manage, whereas BI developers view applications in terms of the data they handle and maintain. To understand why these different viewpoints exist and how they affect process-centric BI application development, we need to explore four types of IT applications and processing that support business operations - operational business transaction processing, collaborative processing, BI processing and business planning. Master data management is a fifth type of application processing, but for simplicity we will ignore this type in this discussion.

Understanding Business Transaction Processing

The main objective of business transaction applications is to support the day-to-day business operations of a company. When processing customer orders for computers, for example, these applications validate and enter orders, schedule the assembly and testing of the computers, handle the shipping of the orders and bill clients. To support this order processing, other applications track inventory levels, order parts and so forth.

Business transaction processing handles the many interrelated business processes that work together to meet the operational needs and goals of the business. Each process consists of one or more activities that perform specific operational tasks that need to be carried out. The way these business processes and activities interact with each other can be described in business transaction workflows. These workflows may be documented on paper, in spreadsheets or using workflow tools.

As the IT industry has evolved and offered better software solutions, more and more business operations have become automated. This automation was initially done using monolithic applications that exchanged information using batch files. Many of these applications have now been replaced by online applications that communicate using distributed computing technologies. Early distributed computing approaches were time-consuming to implement and involved proprietary techniques and technologies. Organizations are now solving this problem by moving toward interconnecting business transaction applications using a service-oriented architecture (SOA). An enterprise service bus (ESB) is sometimes used to manage the SOA environment and to connect legacy applications to the SOA environment.

Business transactions and their associated workflows involve application-to-application (or service-to-service) communication, possibly with some user interaction. When user involvement is required, the workflow interacts collaboratively with the appropriate users as required. Many business process management tools on the market handle process workflow definition, automation and integration.

The Role of Collaborative Processing

Collaborative processing supports the manual and semi-automated business processes that exist in organizations. Order processing for business computers can be fully automated when orders are entered via the Internet or corporate extranet, but this is not the case when a customer sends in an order using a fax, email or the postal system. These orders have to be entered and documented manually in case it is required in the future. Other examples of semi-automated or manual processes include claims processing, loan applications, customer service calls and purchase order creation and approval.

Collaborative processing tasks and relationships can be defined and documented in a collaborative workflow. These workflows are oriented more toward people-related tasks compared with business transaction workflows. Several vendors offer software solutions that aid in the documentation of these workflows. These tools also help with automating collaborative tasks and managing the unstructured data associated with them. The infrastructure vendors previously mentioned and enterprise content management and collaborative vendors such as Adobe, EMC, FileNet (recently acquired by IBM) and Open Text provide these types of tools.

Until recently, business transaction workflows and collaborative workflows have remained separate, but with the industry moving toward workflow standards (such as Business Process Execution Language and Business Process Modeling Notation) and an SOA environment, these workflows are being brought together. This effort is coming from a number of different vendors, but companies such as Adobe, IBM and Microsoft are putting significant resources into providing shared workflows, common forms handling technology and document management services.

Enter Business Intelligence

So far, then, we can see how business transaction and collaborative applications work together to support daily business operations. The third type of processing is BI, which has the objective of monitoring, reporting on and analyzing business operations. BI is not involved in running business operations but in looking for ways of making those operations more efficient and more effective.

There are three types of BI - strategic BI, tactical BI and operational BI. Initially, most BI applications were developed for business analysts and experts whose daily job involves accessing and analyzing data. These BI applications were tactical and were targeted at making short-term business decisions involving marketing campaigns, the budgeting process and so forth. More recently, BI has been extended to support executives and senior and line-of-business managers. Here, BI is used to support long-term corporate goals and objectives that we see in annual company reports, such as reducing costs and increasing revenues. These long-term goals usually drive the short-term initiatives measured by tactical BI applications.

Strategic and tactical BI applications provide useful information or measurements about business performance, but by themselves they do little to help business users manage performance. For users to manage performance, the BI needs to be put into a business context. This is done by tying actual business performance data to planned performance data. This requires BI applications to be integrated with business planning processes managed by spreadsheets, standalone planning tools and ERP business applications. Tying the two types of data together produces actionable BI that can be delivered to business users through business planning dashboards. When actual performance and planned performance are not aligned, the responsible business owner can then take action to close the gap.

Page 1 of 2.