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July 20, 2008
Data Warehouse vs. BI
Data Warehouse and BI are considered synonymous. The reality is that Data Warehouse is one of the components of BI. There are many more components, which are needed to be in place for an actionable BI platform from an IT perspective. These elements are:
OLAP server- This is a multi-dimensional database, which provides extensive analytical capabilities. It sits between data-warehouse and the end-user tools. It picks data from Data Warehouse, summarize it and store it in its OLAP multi-dimensional database. The OLAP database is designed in a way that it helps analytics and other BI functions. OLAP has wide range of pre-built analytical functions, which can be used by users or application which are accessing it.
Enterprise Reporting- These set of tools, provide enterprise level (mostly scheduled) reporting. These tools take their data from OLAP or directly from Data Warehouse. OLAP typically has summary data. When you need detailed transaction level data, one will have to take it from Data Warehouse. In the past BI was typically used only for analysis. However, as Data Warehouse and OLAP combination is expanding its use, enterprise reporting tools have started using DW OLAP as the source.
Query and Analytics Tools- These are the tools, which enable you to do wide range of analysis. This typically deals with summary data (you would not look for individual transactions in our analytics). Many BI platforms is that they enable you to drill down to the transaction level, if you need to investigate into details. This means that in the back-end, you move from OLAP (summary) database to the detailed data warehouse database.
Performance Management Tools- This is the world of Dashboards, scorecards, setting standards, goals, reporting on the performance variance etc. This breed of tools, enable you to manage the functional or enterprise performance, and link it to analytics and enterprise reporting. Therefore, if you have a dip in performance, you can do analytics to find the root cause, and use reporting to list the transactions which are contributing to the same.
Data Mining Tools- While the above three end-user tools (reporting, analytics and performance management) are core to an organization's BI capability, Data Mining is the next level of sophistication. These are knowledge discovery tools, which generate patterns, trends and co-relations on the data.
Business Modeling tools- These tools enable you to create models (like pricing models, actuarial models, business planning models, sales projection model...).
Therefore, when your vendor states that they offer BI solution, do check on what components are they offering. While there are end-to-end BI platforms like SAS and Business Objects, there are many vendors, which provide competitive individual components.
For details around end-to-end BI, you can refer my portal Business Intelligence and Performance Management Institute.
Posted by Rajan Gupta at July 20, 2008 9:45 PM
