Business Intelligence: Put the "Business" Back in E-Business

A year ago, with the conclusion of Y2K conversions, many IT organizations focused their attention and their resources in new directions. Business Intelligence (BI) is one of the areas that received much of this new attention. The past year has seen a marked increase of interest and investment in BI. The interest in BI is good news both for business and for BI practitioners. The rush to BI solutions, however, is a cause for some concern.

Most of the recent BI focus has been on tools - in particular front-end tools for data analysis and information retrieval. Yet, it's not all about front-end tools. To continue with technology as the center of attention for BI is a risky scenario where BI becomes the next in a long line of over-hyped technologies whose potential isn't fully realized.

BI Principles

It is time to make the transition from technology-centric business intelligence to business-centric application of BI technologies. To do so, we need to revisit the fundamental principles of BI. Howard Dresner, with the GartnerGroup, originally coined the term "business intelligence." Dresner defined BI as, "a set of concepts and methodologies to improve decision making in business through use of facts and fact-based systems." Three BI principles are explicitly stated in this definition:

1. The purpose of BI is to improve decision making.

2. BI is a set of concepts and methodologies, not a specific technology or class of technologies.

3. Facts and fact-based systems are the implementation structures of business intelligence.

Two other principles of BI may be derived considering the definition and its implications. These are:

4. Concepts and methodologies are needed both for creation of information and for use of that information.

5. BI is a process of data gathering (facts), organizing information (fact-based systems) and using information (decision making).

Business Context

Comprehensive BI solutions have a strong process orientation. Developing solutions based upon principle number five considers the process from the origin of facts through the impact of decisions that are made. BI solutions developed from a business perspective need to consider each of these questions:

• What is the business context? (b-to-b, b-to-c, e-business, etc.)

• What is the decision-making context? (customer-centric, process-centric, product-centric, core competencies, balanced scorecard, etc.)

• What are the business metrics? (financial measures, process measures, market measures, growth measures, etc.)

• What are the business processes of interest? (sales, marketing, order fulfillment, etc.)

• Who are the BI targets? (managers, knowledge workers, customers, partners, etc.)

• Where are the business facts? (legacy systems, data warehouses, data marts, clickstreams, etc.)

BI Goals

With clear business understanding it is practical to design BI solutions that are complete, and that exhibit all of the characteristics of successful and effective business intelligence:

User Centric. BI solutions aren't something that can be defined using top-down or bottom-up methods. Effective business intelligence is built from a "user-out" perspective.

Fact Based. BI is based upon observable, recordable facts about the business. These facts are the raw materials from which information is constructed.

Information Quality. Information products of BI systems satisfy the expectations of those who use them. These are typically business expectations about the accuracy, reliability, availability and timeliness of the information.

Meaningful Delivery. BI information is delivered to those who need it ... where, when and in the form that is needed. Delivery form frequently has characteristics of summarization and visualization.

Shared Insights. BI at its best leads decision makers to common discovery and consensus about business realities.

Proliferation. Successful BI grows, with good information leading to demand for more of the same.

Technology in Perspective

Sound principles, clear business context, and well-defined goals establish the foundation for useful and effective application of BI technologies. With the business foundation, it is possible to select the right combination of technology - data warehousing, OLAP, GIS, data mining and data visualization tools - to get maximum value from your BI investment. The keys are business-orientation and process focus. Let's make 2001 the year that we put "business" back in BI.

About the Author

David Wells is an enterprise systems manager at the University of Washington, the founder and principal consultant of Infocentric, and a fellow of The Data Warehousing Institute (TDWI)

Must Read Articles