Q:

I found several definitions of BI. I wonder what the real meaning of BI is and what is its relation with CRM and ERP?

A:

Sid Adelman’s Answer: The following definitions are taken from the glossary in "Impossible Data Warehouse Situations: Solutions from the Experts." The authors are Sid Adelman, Joyce Bischoff, Jill Dyche, Douglas Hackney, Sean Ivoghli, Chuck Kelley, David Marco, Larissa Moss and Clay Rehm.

Business intelligence (BI): Normally describes the result of in-depth analysis of detailed business data. Includes database and application technologies, as well as analysis practices. Sometimes used synonymously with "decision support," though business intelligence is technically much broader, potentially encompassing knowledge management, enterprise resource planning, and data mining, among other practices.

Customer relationship management (CRM): Infrastructure that enables delineation of and increase in customer value and the correct means by which to increase customer value and motivate valuable customers to remain loyal – indeed, to buy again. A collection of integrated applications which facilitate the seamless coordination between the back-office systems, the front-office systems and the Web. The DSS expansion of CRM analytics refers to customer- centric analytics applications.

Enterprise resource planning (ERP) : Tying together and automating of diverse components of a company’s operations, including ordering, fulfillment, staffing and accounting. This integration is usually done using ERP software tools.

Larissa Moss’ Answer: My guess is that you will continue to hear different definitions for business intelligence (BI), even from the experts. To some CRM experts, BI is all about seamless integration of operational front-office applications with operational back-office applications. To some data warehouse experts, BI is just a new term for data warehousing; that is, providing decision support applications on a new technology platform. To some data mining statisticians, BI represents the advanced data mining algorithms, such as neural induction techniques. In my definition, BI is an enterprise architecture for an integrated collection of operational as well as decision support applications and databases, which provides the business community easy access to their business data and allows them to make accurate business decisions. It is a new "discipline," in which data is finally treated as the corporate resource, that it is. Any operational system (including ERP and CRM) and any decision support application (including data warehouses and data marts) are BI, if and only if they were developed under the umbrella and methodology of a strategic cross-organizational initiative. I recommend the book: Business Intelligence Roadmap: The Complete Project Lifecycle for Decision Support Applications, by Larissa T. Moss and Shaku Atre, Addison Wesley Longman, 2003, ISBN 0-201- 78420-3.

Les Barbusinski’s Answer: Just as military intelligence is information that helps the military better understand its opponents’ intentions and capabilities vis-à-vis its own (i.e., so that it can effectively manage its assets in the face of an evolving threat), Business intelligence is information that helps an enterprise better understand its challenges and opportunities (i.e., customers, products, processes, suppliers, competitors, capital, etc.) so that it can effectively react to emerging market conditions. More to the point, business intelligence (BI) is a term used to collectively define technologies and/or applications that generate and distribute dimensional analytics about a given segment of an enterprise. It replaces such terms decision support and OLAP, which have fallen into disfavor in recent years.

CRM and ERP are just two types of operational systems to which BI analytics can be applied. For example, CRM-oriented BI analytics might include such metrics as the average estimated lifetime value of customers in the 31-45 age bracket who live in the Northeast and have an annual income greater than $100,000. ERP-oriented BI analytics might include such metrics as the mean-time- to-failure for a given machine tool in a particular manufacturing facility.

Hope this helps.

Clay Rehm’s Answer: To me, business intelligence (BI) is about giving our business partners easy-to-use tools, easy-to-understand data and meta data, and the control and power they have been asking for and never receiving for years. Customer relationship management (CRM) is focused on integrating "customer" data and interactions, while enterprise resource planning (ERP) is focused on integrating several mainstream business functions. I believe that CRM and ERP rely heavily on successful BI implementations that may or may not be part of the vendor package.

Joe Oates’ Answer: Although enterprise resource planning (ERP) theoretically includes business intelligence (BI) and customer relationship management (CRM), in practice this is generally not the case.

BI is a term that encompasses a broad range of analytical software and solutions for gathering, consolidating, analyzing and providing access to information in a way that is supposed to let an enterprise’s users make better business decisions. The term BI includes software for ETL, data warehousing, database query and reporting, multidimensional/OLAP data analysis, data mining and visualization. The key, of course, is consolidating data from the many different enterprise operational systems into an enterprise data warehouse. Due to the vast scope of this effort, few organizations have a truly enterprise data warehouse.

ERP generally refers to commercial software packages that integrate business functions and data across unit and division lines including sales, human resources, financial and operations. ERP has probably had its greatest success in the manufacturing sector. Implementing a full ERP system is a huge undertaking for most organizations and can even soak up the entire IT budget for up to several years. While most ERP vendors advertise that their ERP system covers all aspects of a business, including BI, there are still large areas that the software does not cover and many or most ERP customers have a BI function that is different from the ERP vendor’s solution. Generally, ERP solutions satisfy operational requirements. Additionally, many organizations only implement the Financials portion of the ERP suite.

CRM is, or at least should be, an organization-wide ongoing strategy, not a vendor product. The main purpose of CRM is to develop a single, integrated, enterprise-wide view of the customer to understand who the customers actually are, what their experience with the organization has been, what they are happy with and what they are unhappy with, which ones are profitable and to provide superior value and service to the "best" customers. Although this may sound a little cynical, the purpose is really to maximize wallet share at the expense of competitors.

CRM has both operational and analytic components. The operational component deals with the day-to-day customer contact and selling function. The analytic component provides information so that the company sales people increase productivity by spending their limited time and resources on existing and prospective customers who are likely to buy their products. The analytic component also helps marketing understand to which customer segments promotional campaigns should be targeted, as well as understanding which campaigns are cost-effective and which are not.

To be successful, an organization must cover all of the above areas. The organizations that do the best job will survive and be successful.

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