Traditional and operational business intelligence components and data latency

¶ … components of BI. Distinguish between traditional and operational BI.

BI, or Business Intelligence, is very important to companies. It takes raw data and turns it into useful information, so the business can take it and use it to find ways to make things better for customers and for themselves (Rausch, Sheta, & Ayesh, 2013). A company can recognize the need for BI by studying the data it has been collecting and how that data is used. It is very important that data is only collected if it is needed, and many companies collect a huge amount of data that they do nothing with. That wastes a great deal of time and money that could be better spent, and also fails to get the data that is needed properly analyzed (Rausch, Sheta, & Ayesh, 2013). There are a number of components to BI, including multidimensional aggregation, real time reporting, denormalization, interfacing with the source of unstructured data, and group consolidation (Rausch, Sheta, & Ayesh, 2013).

Additional components are statistical inference, the optimization of key performance indicators, process management, version control, and the management of open items (Rausch, Sheta, & Ayesh, 2013). Understanding the components of BI is a great way to provide historical and current views of the operations of a business, as well as to predict what might take place in the future (Rausch, Sheta, & Ayesh, 2013). There are two types of BI: traditional and operational. Traditional BI is based on handling data the way it has always been used for business operations, and operational BI is focused on addressing a particular operation and how the data for it is considered and processed (Rausch, Sheta, & Ayesh, 2013).

Rausch, P., Sheta, A., & Ayesh, A. (2013). Business intelligence and performance management: Theory, systems, and industrial applications. UL: Springer Verlag.

2. What is data latency? How does giving users the ability to create their own reports reduce data latency? What is the age of fresh data?

Data latency is the length of time it takes for the data to appear after a query has been initiated, and can also refer to how long it takes for a database to update after a change has been requested (Rud, 2009). With that in mind, companies have to carefully assess their data latency issues, because a serious lag time can become a problem for customers -- and a problem for customers can quickly become a problem for the company. One of the ways to help reduce data latency times is to give users the ability to create their own reports (Rud, 2009). That reduces latency because they are not waiting for others to update information for them, so they can create reports. Additionally, they are not relying on the reports of others, which may or may not have updated data. Both of those options are important to consider, as both can cause significant difficulties for people who are serious about data latency and the avoidance of it for both employees and customers.

Data should be given to those who need it as soon as possible (Rud, 2009). It is important to collect any and all data that your company can easily use to move the business forward, and it is also important to make sure the right people get that data. However, none of that will be useful if those people do not receive the data at the right time. Getting old, stale data does nothing for the company or business, and can even hurt a company by keeping its employees misinformed regarding what can and should be important to customers (Rud, 2009). When a company collects data and quickly sends it to the people who need it, it can remain fresh and be processed in a way that helps everyone involved.

Rud, O. (2009). Business intelligence success factors: Tools for aligning your business in the global economy. Hoboken, NJ: Wiley & Sons.

3. Define business performance management (BPM). What is the objective of BPM?

Business performance management (BPM) is often synonymous with enterprise performance management. It is considered to be a set of principles and processes that allow the management of a company to reach goals that have been pre-selected (Dresner, 2007). The objective of BPM is to reach those goals, but there are set ways in which this can and should be completed. The first part of BPM is to select a goal or a set of goals that are very important and that need to be met, because the company must be clear in the direction it is taking (Dresner, 2007). Then the information about the company that is relevant to the goals must be consolidated and carefully measured (Dresner, 2007). That will help the company to determine whether the goals are going to be met, and also whether the company is currently addressing issues that would move it toward those goals.

If measuring company information shows that goals are not being worked toward, it is clear that changes will have to be made, and that can take time and effort (Dresner, 2007). When managers realize that goals are not going to be properly met, they can make interventions that will allow them to change the course of the company so that the goals can be worked toward properly. Goal-setting is highly important for any company that wants to see success, but in order for the goals to actually work out properly, effort has to be made and the right direction has to be determined and understood (Dresner, 2007). In other words, a company cannot just set goals and then expect them to happen. It has to focus on making those goals a reality -- and course corrections are often required as a company looks for new and better ways to use BPM to reach its desired goals.

Dresner, H. (2007). The performance management revolution: Business results through insight and action. NY: Wiley.

5. What does IT governance cover?

IT governance covers the efficient and effective use of IT in ensuring that an organization is able to meet its goals (Weill & Ross, 2004). That may sound simple, but it is actually rather complex in that a number of issues must come into play in order to allow that to take place. Governing the IT department and the data it collects, processes, and provides to the rest of the company is no easy task, and there are many aspects -- all of which are potential problems if they are not handled correctly (Weill & Ross, 2004). When data is collected, it has to be the correct data at the right time, and it then has to quickly reach the right person for processing (Weill & Ross, 2004). An organization that is not getting the right data or that does not know what to do with the data it is getting can easily find itself with a serious problem when it comes to relating to customers and providing them with what they want and need. Proper IT governance can help avoid that possibility.

Additionally, companies very often rely on their IT department to have the correct information they need so they can provide that information to other employees or to customers (Weill & Ross, 2004). If the IT department is not being handled and managed correctly, that information is not going to be available. That can result in a loss of customer confidence, which can quickly affect the bottom line of a business. In order for the IT department to help the company meet its goals quickly and efficiently, the management of it has to be something on which the company focuses (Weill & Ross, 2004). Taking IT governance seriously can go a very long way toward the success of a company and the reaching of corporate goals that are important to everyone involved in their planning and implementation.

Weill, P. & Ross, J.W. (2004). IT governance: How top performers manage IT decision rights for superior results. Boston, MA: Harvard Business School Press.