Business Intelligence

What is BI?
(Part 1 of 2)
 How do I make decissions
in my business?
• How does the company make decissions? Using
intuition? You have to make business decisions based
on reality (facts and numbers!)
• EPM (Enterprise Performance Management) is a
management style focused on measuring companies
• Several Methodologies / Strategies:
• Balanced Scorecard
• Six Sigma, ABC - Activity Based Costing, TQM - Total
Quality Management
Phases in the Decision
Making Process
Intelligence Explicit the problem

Design Plan for possible solutions

Election Evaluate based on the outcome

Implementation Actions according to a plan

Control Verify expectations and effects

 Types of decisions
Structured Semi structured Non structured

Strategic

Tactic

Operational
 I need information!
• All of these methodologies are based in several
numeric indicators
• “If you can’t measure it, you can’t manage it”
• Indicators come from “day-to-day reality” (main
street)
• Monthly outcome, Number of complaints filed
per product, Number of satisfied customers,
Returns
• Data exists, but ...
Different Points of View (1)
• The CEO says “We need to sell more”

• Marketing Mgr thinks “What can we offer to our

customers?”

• To do this, we need to know: What are the most sold

products? What bundles are the most successful?

• Who can provide us with this information? Because, we

already have this information, don’t we?

• IT Mgr, while upgrading platforms and implementing a new

CRM system, estimates that the information will be available
in 20-30 days...
Different Points of View (2)
• Marketing Mgr asks: A month!? Didn’t we have this kind of
information in our servers already?

• IT Mgr answers:Yes, the data is there, but it doesn’t have the

right structure to answer the questions you’re asking

• Marketing Mgr keeps thinking that if the data is there, it can’t

be so difficult to get the answers they need

• IT Mgr keeps thinking that Marketing Mgt always asks for

weird things, and with not time at all

• And the CEO just wanted to sell more!

 Business Problem

• Where is the problem?

• Marketing Mgr is right: the data IS in the servers
• IT Mgr is also right: is not easy to give data the right
structure to answers questions
• For IT is just enough to deal with data, Marketing
needs to extract information from this data.
 Data and information
are not the same
• Companies always maintain several systems to run
their everyday business
• All of the company workers add and check data from
this systems all the time
• However sometimes this data, presented in this way,
is not enough to make business decisions
Data, Information and
Knowledge
• Data: entity and transactions stored as
structures and codes
• Information: is the outcome of processing and
extraction of data, with specific domain
meaning to those who access it
• Knowledge: Information becomes knowledge
when is used to make decisions and take
actions accordingly
What is Business Intelligence?
• Is a set of processes, technologies, applications and
practices used to provide information and support
the decision making process
• It is NOT a standard software product, it is
specifically designed by consulting and targeted to a
particular business need
• There is a series of technology tools that support
this objective
• To better understand this, a new type of systems
categorization appears:
OLTP (Transactional) and OLAP (Analytical)
 What is BI?
SCD
MOLAP RDBMS ROLAP
ODS Data Warehouse ETL Forecasting
Analytics
Analytics Data Mining Clustering EIS
HOLAP Alerting KPI Reporting OLAP
Alerting
Time Series
Key Performance Indicators
Dashboards
Sales Intelligence
MDM Data Mart
Knowledge Discovery
Online Analytical Processing Data Integration
 Transactional Systems
OLTP
• Designed to solve everyda work
transactions (i.e. sales, customer care,
manufacturing)
• Points where the data is captured and
recorded in the company
• Very efficient in the management of specific
information
• ERP, CRM, RRHH, SCM, Email, Others
 Problems and Disadvantages
• Relational Databases were designed for everyday
work and not for analysis
• It is difficult to manage historical information
• Data is distributed among multiple systems and
databases. How and where do you gather all of the
systems data?
• To extract information from data you need knowledge
of non-trivial skills (programming or SQL language)
and is not a dynamic process
 Analytical Systems
OLAP
• OLTP Systems complement
• Designed specifically to obtain information, analyze
and solve business problems
• Specific analytical information is added to the data
• They use a different database technology, optimized to
extract information.
• Analytical systems unify all of the company’s data in
one system: the Data Warehouse
What is a Data Warehouse?
• Is a digital warehouse with all of the electronic
registered data in a company
• They store all of the company’s information:
daily and historical data
• They gather heterogeneous information sources
in one centralized space
• It is used for reporting, data analysis and
exploration, to see and detect changes and
tendencies
• Only two operations exist: load and query
 Data Warehouse or
Data Mart?
• A Data Warehouse contains all of the
company’s information (wide scope, higher risk
project)
• A Data Mart is targeted to solve one
company’s department needs in particular
(limited scope, lower risk project)
• The Data Warehouse can be built joining
multiple specific Data Marts
 DWh Objectives
• Must allow easy access to the company’s
information

• Must present this information in a consistent way

• Must be adaptable and change-resilient

• Must be a safe store, protecting the company’s

information assets

• Must support the decision making process

• Must be accepted by the decision makers to be

successful
 DWh Challenges

• Has to unify the whole company’s data model

• Data latency
• Historical data storage
• Data granularity
• Speed and performance in queries
• Independent of OLTP system changes
How do we build a DWh?
• ETL processes Extract the information from
transactional systems, Transform this information and
they Load it into the data warehouse
• The information is stored in multidimensional
databases
• Information is ready to be used
• The systems to access information are easy to use,
you don’t have to work at NASA!
Dimensional Modelling (1)
• This is what makes a Data Warehouse a
business oriented database
• Measures. Business Variables
• Numerical values
• Sums, consolidations, arithmetic operations
• Dimensions
• Texts
• Filters
 Dimensional Modelling (2)
Time Date-ID
Facts
Dimension Year Product-ID
Month Date-ID
Date-ID SKU
Day Product-ID
Branch-ID Description
Category
Total Type
Branch-ID
# Products Price
Country
# Tickets
State Product
Branch City Dimension
Dimension
Why is it multidimensional?
• A dimension is one of
the “edges” of your
business
• Customers • It is called
multidimensional
• Invoices because you can see
the information from
• Orders different “edges” at
• Quotes the same time

• Time
• Activities
 ETL Processes
Database

Data Information
OLTP ETL
Warehouse Access
Systems
Transformation
Extraction Loading
 What’s in a cube?
Time

ts
uc
od
967
Jan Feb Mar Apr

Pr
540

P4
967

P3
P2
780 P1
Clients
Josh Sarah Joe Anna
 Data Warehouse
Database Technology

• MOLAP : Multi Dimensional

• ROLAP : Relational
• HOLAP : Hybrid
How do I “see” what’s in
a DWh?
• OLAP Cubes
• Reports
• Dashboards
• KPIs - Key Performance Indicators
• Alerts
 OLAP Cubes
• They let you analyze all of the information available
in the Data Warehouse
• Each cube stores a set of specific information, and
contains different “measures” and “dimensions”
• Measures are numbers (i.e. amounts, quantities,
percentages)
• Dimensions contain attributes to filter and order
information
• Several visualization tools: Excel, Reports, Web
 Some cubes
• Sales
• Stock
• Suppliers
• Orders
• Accounting...
• Human Resources...
• Finances...
• Dimensions
Sales
• Date / Time
• Customer
• Branch / Store
• Product
• Discount
• Measures
• Quantity
• Cost
• Profit
 Stock / Inventory
• Dimensions
• Date / Time
• Store / Branch
• Product
• Measures
• Qty / Price / Cost
 Supply
• Dimensions
• Date / Time
• Supplier
• Product
• Contract / Contract terms
• Type of transactions
• Measures
• Qty / Amount / Cost
 Orders
• Dimensions
• Date / Time
• Product
• Customer
• Salesperson
• Terms of sale
• Measures
• Qty / Amount / Discount
 Reports
• These are the classic reports we already know
• When your reports are built with data from the
DWh, you can trust on a reliable data source
• Historical data can be accessed too
• You can build reports with data coming from
different systems in the company
• All of the reports are accessed from the same
location
 Digital Dashboards

• Is an information system similar to a car’s

dashboard, designed to be easy to read
• Easy and visual information presented in a way
to help you detect and correct tendencies
• Use them to align company strategies among
departments and global objectives
 Key Performance
Indicators (KPI)
• They measure specific items and help you
organize, define and evaluate your objectives
• SMART: Specific, Measurable, Achievable,
Relevant, Time-bound
• Number of new Customers, Opportunity closing
average time, Customer loss index
 Conclusions
• OLTP systems to support everyday work and
give information to the company
• OLAP systems to extract and analyze
information and to make decisions
• Dashboards to concentrate information in a
centralized view
• OLAP cubes to solve specific questions and
freely explore information
Some Software Products
you might need
• Microsoft SQL Server Analysis Services
• Microstrategy
• SAS
• OpenSource Alternatives (Pentaho)
The End?