How Business Intelligence Software Works
In today’s post I want to discuss how business intelligence should work, the connection between strategic, analytical, and operational initiatives, and how business intelligence software should be implemented. What I have learned in all of the different implementations I have been involved in is that each type of BI that used at different levels of an organization can really be categorized into three levels. They are strategic, analytical, and operational. With that in mind let’s understand the best ways to use business Intelligence software to get a good effect within your organization, regardless of the platform
So first of all let’s talk about the classic dashboard scenario. When I say dashboard in this sense I am actually talking about an automobile dashboard. If you look at it as being the strategic display for your automobile. You have many icons on the dashboard that mean different things about the operations of the automobile. If you add to that your speedometer, your navigation system, all of these things on the dashboard help you see how well you are performing and whether you are moving in the right direction.
Of course, this scenario is analogous to the idea of a key performance indicator dashboard that somebody might use within an organization. But let’s just focus on the point of this from an automobile perspective. Let’s say you notice that one of the icons on the dashboard has turned red. This indicates that I am having a problem with some system within the automobile.
Say for example, this time it happens to be the temperature gauge. And if you know much about automobiles, and it’s not expected that you do for a business intelligence blog like this one, but in any case, if an automobile is running hot, meaning that it’s over the expected temperature that an automobile should run at, then the cause could be one of several things. The idea is that the dashboard, itself, doesn’t tell me exactly what is wrong, but it gives me an indication of where I should look.
Continuing on with this example, the thermostat in an automobile is something that regulates the flow of coolant throughout the automobile. So that’s one of the things that commonly can freeze up and cause an automobile to overheat. A rubber gasket which helps to create the pressure that is used for the piston can break down. This is what is called a blown head gasket, and you can actually lose pressure. Then the automobile needs to overwork in order to just perform, and in some cases that can cause overheating.
One of the most common causes of overheating is a broken fan belt so that means that the fan is not turning to cool off the coolant that is flowing in the system when there is a leak. This is another potential reason for my red light turning on. So the point is that we get an indicator on our dashboard that tells us there is a problem, and all that does is help us focus our attention on where we should look for that problem.
After some investigation we might find out it was a broken fan belt, and then we put in a new fan belt to fix the problem. This is the flow of what happens on the dashboard, how you evaluate it, and then how you put in the actual fix to correct the automobile’s operations. If you ignore the red light, then you eventually overheat. If you follow through with what is on the dashboard, do your investigation, and put in the operational fix, then you can drive safely on your way.
The analogy here is that these three areas are synonymous with the three areas of business intelligence software. The dashboard is your strategic level. It’s also called BI performance management. The analysis or the analytical level is where you apply OLAP cube analysis, analytic dashboards, and ad hoc query. The operational level is where you are actually doing the work or fixing the process or fixing the thing that’s wrong in order to be able to improve the performance of the whole organization or in this case the automobile.
So that’s the way business intelligence is supposed to work. In most cases I don’t see that people recognize the necessary connection between the three different levels of BI, so in future posts, we’ll talk about that.