1. Introduction
Todo BI was born a year ago with the purpose of spreading and promoting knowledge of Business Intelligence in Spanish-speaking countries and, fundamentally, in Spain.
business-intelligence-and-information-managementA year later, we can affirm that we are on the right track because month by month, the Portal attracts more readers and interested. Both companies interested in mounting their BI / DW systems, as manufacturers and distributors of solutions, even professionals interested in the subject; all come together in Todo BI as a source of information.
In recent months, we have witnessed many events, seminars and congresses, some of whom have been lucky enough to speak, but I would stay with the sponsorship we do for the most important event on Business Intelligence in Spain: The Forum Business Intelligence 2006, organized by IIR.
In creating this report, we have made a significant effort to condense a large amount of information, for all those who want to be up to date on Business Intelligence technologies, placing great emphasis on strategy and added value for companies as a fundamental value.
Finally, I want to thank all the sponsors of this Report (XLCubed, Business Objects, Stratebi, Denodo Technologies, Hyperion, Iteva Solutions, Symtrax), thanks to which we make this Report available to you completely free of charge.
Business intelligence as a competitive strategy
1. Business Intelligence and business culture
In a company it is necessary to make decisions on a daily basis (some very strategic), which are based on information generated based on real data. Generating this information is the work of Business Intelligence systems (in English, Business Intelligence).
According to Wikipedia:
We call business intelligence (BI) the set of strategies and tools focused on the administration and creation of knowledge through the analysis of existing data in an organization or company. This set of tools and methodologies have in common the following characteristics:
- Accessibility to information. Data is the main source of this concept. The first thing that these types of tools and techniques must guarantee will be the access of the users to the data, regardless of their origin. Support in decision making. It seeks to go further in the presentation of information, so that users have access to analysis tools that allow them to select and manipulate only those data that interest them. Orientation to the end user. Independence is sought between the technical knowledge of users and their ability to use these tools.
According to their level of complexity, Business Intelligence solutions can be classified into:
- Simple queries and reports (Queries and reports) OLAP cubes (On Line Analytic Processing) Data Mining or data mining. Companies often collect information on production, markets and customers, but in reality the success of the business depends on the vision to intuit changes or new trends. Data mining applications identify trends and behaviors to extract information and discover relationships in databases that reveal inconsistent behaviors.
For a company to be competitive, decision-makers need to quickly and easily access company information, and this is done through Business Intelligence.
Business Intelligence, therefore, is the process of analyzing company data to extract knowledge from it. With BI you can, for example: create a customer database, forecast sales and returns, share information between different departments, improve customer service.
The most common areas they are used in are sales, marketing, finance, manufacturing, and production.
All decision making implies accepting a risk, what is undoubted is that the objective is to minimize that risk. This is where BI tools come in. They are responsible for transforming the corporate data from our backoffice system into useful information for business decision-making.
When we talk about BI we are referring to the set of methodologies and technologies, which are aimed at improving the intelligent management of the company, which allow management teams to control business.
Or put another way, "BI is an effort to capture and analyze business data to understand markets, customers or suppliers more clearly, to improve business processes and compete more effectively."
Types of Information Systems:
Information systems are divided according to the following division:
- Tactical System Technical-Operational System Global System Strategic System
Tactical system:
They are designed to support the tasks of coordination of activities and documentation management, defined to facilitate queries about information stored in the system, provide reports and, in summary, facilitate the independent management of information by the intermediate levels of the organization.
Technical-Operational System:
They are the ones that cover the fundamental part of traditional massive data capture operations (data entry) and basic data processing services, with predefined tasks (accounting, billing, warehouse, budget, personnel and other administrative systems). They are called Operational Systems.
These systems are evolving with the emergence of alert automatisms, multimedia systems, more advanced relational databases and datawarehousing.
Global System
This level of information systems is emerging recently, and is a consequence of organizational development oriented to a global market, which forces to think and implement closer communication systems between the organization and the market (extended company, smart organization and integration organizational), all this from the generalization of computer networks of national and global scope (internet), which already become 'de facto', a vehicle of communication between the organization and the market.
In this System, it does not matter where the organization is (intranet), the institution's market (extranet) and the market (internet).
Strategic System:
These systems facilitate the work of management, providing basic support, in the form of better information, for decision-making.
They are characterized because they are systems without periodic work load, that is, their use is not predictable, unlike previous cases, whose use is periodic.
The objective is to generate information that can be worked on and analyzed intuitively, more or less in real time, and with the possibility of integrating different data sources to offer a global vision that can be shared and distributed by all company departments..
It is not that everyone has access to all the information, it is that everyone has access and generates the information they need to make their work as efficient as possible.
Although these types of tools have been around for years, most have undergone major reengineering processes to allow the deployment of their functionalities over the internet.
The latest evolution of these products has made them ready to be able to generate a portal as access to information from where all the users of the company will be able to carry out processes of consultation (query), analysis, reports, graphics, among others. We are talking about a portal, which can be fully integrated with knowledge management systems.
In this way, the organization can create a common information model that supports heterogeneous data sources and multiple applications, both inside and outside the organization.
Before continuing with the agenda, we are going to define a series of key concepts, widely used when talking about Business Intelligence and, which are often used in the wrong way, due to their similarity:
Analytical: It is the process of collecting and analyzing data, such as the behavior of consumers or their purchasing patterns; and use it to develop a series of initiatives that may include promotional or advertising campaigns. Predictive analytics helps companies make decisions based on what is most likely to happen in the future, thanks to the use of statistical models and large databases.
Business Intelligence: It is a process that involves the use of tools, such as application software and methodologies, and that help users, through their use, to make better decisions. Business Intelligence includes reporting, query or analysis, dashboards, scorecards, alerts, etc…
Competence centers: They are groups of people within an organization that develop best practices for a given area or activity. In the case of Business Intelligence, they establish standards to select the best tools, make them available to users and advise them on their correct use.
Dashboards: Dashboards condense large volumes of information in very eye-catching and practical visual environments. Using graphics, maps, and other visual aids, a highly intuitive environment is provided. They manage to make simple, complex data models, formulas and relationships between variables.
DataWarehouse: It is a large centralized Database that integrates data from various sources within a company. The DataWarehouse can be distributed on different platforms, systems, even Database. The data is generally organized by criteria such as sales, departments, dates, etc…
Management by events: It is that automatically critical situations for business can be monitored in real time. Alerts can be sent by mail, to PDAs, mobile phones, etc…
Modeling: This is an analysis technique that looks at data from the past and enables the company to predict what will happen in the future, based on a series of scenarios and conditions.
OLAP (ONLINE ANALYTICAL PROCESSING): It is a set of technologies and software applications that allow the company data to be collected, stored and investigated quickly and intuitively. It is about creating a 'business layer' with functional language on top of complex Database structures.
Reporting: It is a key element of any Business Intelligence solution. Generating reports enables users to observe the progress of the business. The reports must include financial ratios, sales data, information about customers, statistical calculations, etc…
Scorecards: They allow to measure the operation of a company by identifying some key metrics (KPI's, Key Performance Indicators). Scorecards help determine if a company is achieving certain objectives, if it is making progress or if there are clearly deficit aspects that directly affect the overall result of the company.
2. How do companies handle information today?
As Ricardo Sánchez Montoya (Professor of the Academic Department of Marketing at ITESM Campus Monterrey) points out, quoting Geoffrey A. Moore, Director of Chasm Group: “In this new world, information reigns… ” We live in a time when the Information is the key to gaining a competitive advantage in the business world. To stay competitive, managers and decision makers require quick and easy access to useful and valuable company information. One way to solve this problem is through the use of Business Intelligence or Business Intelligence.
In the following image of the Forrester study company, we see how a scorecard can bring business intelligence to the department.
Sometimes we have heard of business intelligence and do not know what it means. Much is said about it, but few really know what it can do for your business. The idea of this point is to describe in a simple and practical way how business intelligence can benefit companies.
Today's companies collect, create, and store more data than ever. And, that information comes from a wide variety of sources: clients, suppliers, partners, consultants, market research companies, etc… Managing all that information and turning it into useful information for decision-making is becoming a task. increasingly complicated. However, the potential benefits of using all that information appropriately are even greater, so it is worth the effort: improving employee productivity, increasing customer service, achieving higher income, higher quota. market, etc…
A survey of more than 1,300 CIOs in more than 30 countries, released in January 2005 by Gartner Research, showed that CTOs planned to increase their Business Intelligence investments by more than 6% this year. This same study pointed out that Business Intelligence was the second priority for these executives behind the improvement of security tools but well ahead of issues such as providing mobile infrastructure to employees, workflow management, implementation and integration, ERP, CRM, storage management, etc…
In addition, these managers believe that from the improvement in the investment in Business Intelligence, benefits can be derived for the improvement of the company's business.
Delete information islands
CIOs believe that the proper use of business intelligence solutions gives significant advantages in the fight against one of the recurring problems in large companies with enormous volumes of information: the creation of islands of information where data is not. shared throughout the company.
A very common situation is that in each department they have their own Data Warehouse or Data Mart, with a totally different structure from that of other departments.
The commercial, human resources, financial and production areas create their own databases and there is no way to obtain a unified and common vision of the entire company.
In recent times, the concern of companies was focused on hoarding a large amount of data from diverse sources. In order to deposit such a large amount of data, large data warehouses were created. However, the value of these data is not in themselves, but in the information that can be generated from them. For this to be possible it is necessary to centralize, structure and contextualize them to extract value from them. BI technology enables a deeper understanding of data based on analysis.
In this way, new business opportunities or services can be identified. Transforming data into information means having the necessary weapons to make better decisions that will directly impact cost savings, greater profitability and better relationships with customers and the supply chain.
Real cases of the application of Business Intelligence:
- A hotel chain uses Business Intelligence applications to collect statistics on the average occupancy of its rooms, as well as the average rates used. In this way, you want to know the average income you get for each room. It also collects information for each hotel on its market share and customer surveys, to find out the relative position of that hotel with respect to competitors. These data are analyzed in trends that go from day to day, month to month, to annual evolution. In this way, there is a clear vision of the operation of each hotel, even if the company has hundreds and these are distributed throughout the world.A Bank manages to establish a link between its old open and legacy systems with the new data provided by departmental databases. In this way it is possible to identify who are the most profitable clients of a certain office, and what products can be offered with guarantees of obtaining cross sales.
Thanks to these tools, the IT department is freed from having to carry out all these tasks and leaves it to the users themselves, office managers, to take over these functions.
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