|“||Strategic execution requires a systemwide approach that consistently drives organizations to do the right things-and to do those things right.||”|
—Morgan et al. 2007
Business Intelligence and Business Intelligence Systems
Business intelligence focuses on making organizations more effective. For profit maximizing organizations this means using BI to achieve continuous profitability. For non-profit and governmental organizations this means efficiently and effectively serving their benefactors or constituents. How is it that BI can serve the interests of any type of organization?
Regardless of their objectives all organization engages in two types of activities (Porter 1996 and Morgan et al. 2007):
- Strategic Effectiveness - Doing the right thing (projects and programs)
- Operational Effectiveness - Doing things right (right processes)
The most competitive and efficient organizations achieve superior performance over time. They do this through both operational and strategic effectiveness. Operational effectiveness means performing similar activities better than rivals perform them by better utilizing inputs. It is a necessary but not sufficient condition for success. Strategic effectiveness means performing different activities from rivals or performing similar activities in a different way (Porter 1996). Only after achieving operational effectiveness can an organization focus on strategic effectiveness. This is because it is possible (but not probable) for an organization to function effectively while doing the wrong thing right. However, superior profitability or public service occurs when organizations do the right things right (Porter 1996 and Morgan et al. 2007).
BI systems help organizations make better-informed decisions. They help middle management determine if their business unit is operationally effective. Once the orgaization's leaders are certain that the company is operationally effective then executives can determine if the company is executing the strategy effectively. In order to perform these tasks decision makers need intelligence in order to evaluate both strategic and operational effectiveness. Business Intelligence systems deliver the intelligence necessary to both develop and evaluate strategy and implement the strategy (operations). Thus an effective, organization-wide BI system allows decision makers to evaluate both strategic and operational effectiveness.
This book outlines a way to think about BI and build a BI system using framework architecture. Specifically, this book focuses on a specific type of BI system architecture. Information systems have both an architecture and infrastructure (Poe et al. 1997). An architecture is a set of rules providing a framework for the overall design of a system (blueprint). A technical infrastructure (or just infrastructure) is closely related to architecture and includes technologies, platforms, databases, networks, and any other components necessary to make the architecture function (Poe et al. 1997). This book defines a BI system by developing an architecture and infrastructure for both frames and frameworks.
The approach in this book assumes that:
- Company strategy can and should be embedded in the BI architecture (blueprint)
- BI architecture and infrastructure (technology) are related, with architecture driving infrastructure
- The basic unit of the BI system is a decision maker
- There are many ways to look at an organization. Each view is a reference frame (or just frame)
- A BI system is the interconnection of frames (framework)
- The BI system allows decision makers to determine if they are doing things right and doing the right things (operational and strategic effectiveness)
This book demonstrates how to build a Business Intelligence (BI) system using a step-by-step approach. We adopt the current view that BI is systemic and pervasive, not the application of information systems or products to isolated parts of a company. Business Intelligence is also not just a module to be added to an ERP or data warehouse to produce reports. Rather Business Intelligence, by empowering decision makers with organizational oversight, control and steering through information feedbacks, focuses on the operations, processes and strategic planning needed to run a company. For this reason a solid methodology that guides the construction of a successful BI system must focus simultaneously on both strategic and operational efficiency. This requires a systems approach to organizational planning and control.
This book demonstrates how to build a Business Intelligence system, step-by-step, using a framework approach. This technique divides a BI system into a system (framework) and its parts (frame). Each frame corresponds to the reference frame of a decision maker, such as a manager, vice president, director, etc. A frame can reside at the highest level of an organization (CEO, CFO, CIO, etc.) at the middle (Director and Manager, for example), or at the lowest level (analyst, staff, etc.). The framework is the interconnection of frames, both vertically (up and down the hierarchy) and horizontally (between business units or silos), that allows for the sharing and consolidation of information. The structure of the framework allows for decision makers to centralize information, control and leadership of the firm while maintaining a degree of local autonomy.
The system creates a synergy of both architecture and infrastructure between multiple levels of the organization. Each frame has an architecture and infrastructure. The framework also contains an architecture and infrastructure. The application of a systems approach to the framework architecture unites the parts into a system. Information flows through the system, both horizontally and vertically.
We propose that the framework provides a systems approach methodology for building an organization's BI system. The structure of the book takes the reader through the process of building this system. The process of building a BI system is sequential and is best taught using a hierarchical structure. The highest level are the sections corresponding to the knowledge needed to understand and create a BI system. The sections are sequential and segmented. The first section demonstrates how to build a frame. An information system is composed of both an architecture (blueprint) and infrastructure (building). One the reader understands both the architecture and infrastructure of a frame they move on to the section showing how to create a framework. The section on framework outlines the architecture and infrastructure of the whole BI system.
The first step is to learn how build the architecture of a frame (section 1: stage 1). We then show how to create the infrastructure for the frame (section 1: stages 2 and 3). The next section shows how to build both the architecture (section 2: stage 1) and infrastructure of the framework (section 2: stages 2 and 3).
The definition of each is as follows:
- Section is the highest division and corresponds to an important aspect of building a BI system. The approach taken by this book presents a BI system as a framework with interconnected frames. To build a BI system first requires knowledge of building a frame, both the architecture and infrastructure. Next, it is necessary to understand how to connect the frames into a framework. This requires understanding the framework architecture and infrastructure.
- Stage divides a section into three parts. The stages include Skunkworks, prototype development (Agile methodology) and finally production (SDLC). Skunkworks means a group of individuals that produce innovative products that constitute the architecture. The prototype (agile development) stage applies the agile software development methodology to produce the prototype (infrastructure) based on the frame (architecture). Production refers to sending the prototype through a process designed to turn the prototype into a product that meets the rules and regulations of the company, including Sarbanes-Oxley, HIPPA, and rules regarding architecture and infrastructure.
- Step is the smallest segment and is synonymous with a chapter. Each chapter has a purpose and describes the activities that will achieve the purpose of the step. Specifically, each step or chapter has a name, purpose, input, activities, output and documents.
- Step name: synonymous with chapter name. This is a short descriptor of step purpose.
- Purpose: Explains the reason for engaging doing the step
- Input: the output from one step becomes the input for another.
- Activities: the activities take the inputs and create outputs and documentation.
- Output: this is the product of the activities.
- Documents: describe the output and include written descriptions, user manuals, code, diagrams, etc.
The purpose of this book is to train the reader to become a Business Analyst for Business Intelligence systems. Note that a business analyst and an analyst are not the same roles.
The term Business Analyst is used to describe a person who practices the discipline of business analysis. A BA is responsible for analyzing the business needs of clients to help identify business problems and propose solutions. This book assumes the BA performs the broadest role in helping to build the BI system. They are involved in the creative stage or Skunkworks ("A Skunkworks is a group of people who, in order to achieve unusual results, work on a project in a way that is outside the usual rules." - http://searchcio.techtarget.com/sDefinition/0,,sid182_gci214112,00.html), developing the prototype and putting the final product into production. They are the architects of the BI system as well as the individuals that implement the infrastructure. As such they are involved in many parts of the process:
- Business Requirements gather specifications of what the business wants, the purposes of initializing a specific project (Project Initialization Document), what the needed achievements will be, and the quality measures. They are usually expressed in terms of broad outcomes the business requires, rather than specific functions the system may perform. Specific design elements are usually outside the scope of this document, although design standards may be referenced.
- Functional Requirements describe what the system, process, or product/service must do in order to fulfill the business requirements. Note that the business requirements often can be broken up into sub-business requirements and many functional requirements. These are often referred to as System Requirements although some functionality could be manual and not system based, e.g., create notes or work instructions.
- User Requirements are a very important part of the deliverables, the needs of the stakeholders will have to be correctly interpreted. This deliverable can also reflect how the product will be designed, developed, and define how test cases must be formulated. The Business Analyst will record requirements in a Requirements Management Tool; this can be a simple spreadsheet or a complex application.
- Non Functional Requirements are requirements that do not perform a specific function for the business requirement but are needed to support the functionality. For example: performance, scalability, quality of service (QoS), security and usability. These are often included within the System Requirements, where applicable.
- Infrastructure development this role requires the BA to develop the technical infrastructure for the BI system. A BI system includes such items as a data mart, data warehouse, network and front-end tools. The Business Analyst must be familiar with the workings of all parts of the infrastructure, if not an expert.
The analyst performs the day-to-day analytics for a company and is the main business intelligence worker. Analytics includes quantitative and qualitative analysis, explanatory data analysis, predictive modeling, querying, reporting, OLAP, and the "alerts" needed for decision making. The analyst, by using the BI system, can answer such questions as:
- What happened?
- How many?
- How often?
- Where exactly is the problem?
- What actions are needed?
- Why is this happening?
- What if these trends continue?
- What will happen next?
- What is the best that can happen?
- The goal is to understand how they use the system and how the system can help them deliver the intelligence needed for making decisions.