What really is Business Intelligence one may ask? I had noted earlier in my blog about the Convergence of SOA and BI that Business Intelligence enlightens an organization about Information (and it has to be relative to the business process). I went on to note that Statistics (why things are happening), Trends and Forecasting / Predictive Modeling (what will happen next and will it continue) and finally Business process optimization (whats the best that can occur) all require an understanding of the data in context.
Data in context says a lot let me start by saying that we are in the information age and data is everywhere and information is not! Let me also start with an assertion that business needs information to thrive. Data must be integrated, cleansed, refreshed and turned into reliable business information in order for a corporation to flourish. Information is as critical to a corporations success today as water is to life on this planet and without a clean supply of integrated information, corporations will labor to even exist!
The value of information is also directly proportional to how fast a business can react to it in other words, a corporation loses money every time it delays getting information into the hands of decision makers. Nowhere was this as clearly demonstrated than in a graph created by Dr. Richard Hackathorn called the Time-Value Curve. If you never saw it, it shows that the value of data is highest when the event occurs and then it slopes downward. The delay in time it takes for a user to see it and then to react to it he gave metrics such as analysis latency and decision latency. The time it took to take action was the value lost!
Wikipedia defines BI as Business intelligence (BI) refers to skills, knowledge, technologies, applications, quality, risks, security issues and practices used to help a business to acquire a better understanding of market behavior and commercial context. What it fails to mention first is the most important data is not information. Information is made up of data but it is data with understanding and a single dictionary (one dictionary breeds understanding, two or more breed confusion).
Data is raw junk and consists of both structured (dbs, files) and non-structured components (Documents, Web pages, etc.). Structured data is data with corresponding metadata or data with its syntax but t is still not information yet. Semantics give meaning to structured data elements but this is not information. Information is structured data combined with semantics (or what the data is in the context of the business. Knowledge goes on to create purposeful combinations of information giving the information relevance. Dr. Peter Aiken has been speaking about this for years and it seems that people are just now starting to understand what he has been raving about.
So, raw data reporting is the display of data with a simple description of the field. Performance reporting, the first phase of BI, is placing information (businesses facts in context with semantics) in the context of your business model and operations process. Data Warehousing, the more mature phase of BI, is making sense of these facts so that we can now derive conclusions from related and non-related information. Business Performance Management [BPM], an advanced form of BI, is making coherent judgments and inferences from the knowledge gained by evaluating all the possible outcomes and with the understanding of patterns (from the D/W phase) gives benefits driven usage or options.
Most in this field have seen the Data Triangle Data at the bottom, Information above this, knowledge above that and Wisdom at the top of the triangle. This is where we all are trying to get to! The elusive peak of information is wisdom!
I will next describe how different business stakeholders require different types of information!
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