Chapter 5
BI Definitions and “Fundamentals of Business Analytics”
Concepts RN Prasad and Seema Acharya
Copyright 2011 Wiley India Pvt. Ltd. All rights reserved.
Content of this presentation has been
taken from Book
“Fundamentals of Business
Analytics”
RN Prasad and Seema Acharya
Published by Wiley India Pvt. Ltd.
and it will always be the copyright of the
authors of the book and publisher only.
BI Component Framework
Business Requirement
BI Architecture
Data Resource Administration
Data Warehousing
Data Sources
Program Management
BI & DW Operations
Data Acquisition, Cleaning & Integration
Development
Data Stores
Information Services
Information Delivery Business Analytics
Business Applications
Business Value
Business Layer
This layer consists of four components –
1. Business requirements BUSINESS
BUSINESS VALUE
REQUIREMENTS
• Business drivers
• Business Goals
BUSINESS
• Business Strategies LAYER
2. Business Value PROGRAM
DEVELOPMENT
MANAGEMENT
• Return on Investment
• Return on Assest
• Total Cost of Ownership
• Total Value of Ownership
3. Program Management
4. Development
Business Layer – Business Requirements
Business requirements: The requirements are a product of three steps of a
process that includes:
Business drivers - the impulses that initiate the need to act.
Examples: changing workforce, changing labor laws, changing
economy, changing technology, etc.
Business goals- the targets to be achieved in response to the business
drivers.
Examples: increased productivity, improved market share, improved
profit margins, improved customer satisfaction, cost reduction, etc.
Business strategies- the planned course of action that will help achieve
the set goals.
Examples: outsourcing, global delivery model, partnerships, customer
retention programs, employee retention programs, competitive pricing,
etc.
Business Layer- Business Value
When a strategy is implemented against certain business goals, then certain costs (monetary, time, effort,
information produced by data integration and analysis, application of knowledge from past experience,
etc.) are involved.
However, the final output of the process should create such value for the business whose ratio to the costs
involved should be a feasible ratio.
The business value can be measured in the terms of ROI (Return on Investment), ROA (Return on
Assets), TCO (Total Cost of Ownership), TVO(Total Value of Ownership), etc. Let us understand these
terms with the help of a few examples –
Return on Investment (ROI): We take the example of “Digicom”, a digital electrocompany which has
an online community platform that allows their prospective clients to engage with their users. “Digicom”
has been using social media (mainly Twitter and Facebook) to help get new clients and to increase the
number of prospects/leads. They attribute 10% of their daily revenue to social media. Now, that is an ROI
from social media!
Return on Asset (ROA): Suppose a company, “Electronics Today”, has a net income of $l million and
has total assets of $5 million. Then, its ROA is 20%. So, ROA is the earning from invested capital
(assets).
Total Cost of Ownership (TCO): Let us understand TCO in the context of a vehicle. TCO defines the
cost of owning a vehicle from the time of purchase by the owner, through its operation and maintenance
to the time it leaves the possession of the owner.
Total Value of Ownership (TVO): TVO has replaced the simple concept of Owner's Equity in some
companies. It could include a variety of subcategories such as stock, undistributed dividends, retained
earnings or profit, or excess capital contributed.
In its simplest form, the basic accounting equation containing TVO as a component is
Assets = Liabilities + Owner's Equity, or if you like TVO
Business Layer- Program Management
This component of the business layer ensures that people, projects, and
priorities work in a manner in which individual processes are compatible with
each other so as to ensure seamless integration and smooth functioning of the
entire program. It should attend to each of the following:
• Business priorities
• Mission and goals
• Strategies and risks
• Multiple projects
• Dependencies
• Cost and value
• Business rules
• Infrastructure
Business Layer- Development
The process of development consists of
• database/data-warehouse development (consisting of ETL, data profiling,
data cleansing and database tools),
• data integration system development (consists of data integration tools and
data quality tools)
• business analytics development (about processes and various technologies
used).
BI Component Framework
Business Requirement
BI Architecture
Data Resource Administration
Data Warehousing
Data Sources
Program Management
BI & DW Operations
Data Acquisition, Cleaning & Integration
Development
Data Stores
Information Services
Information Delivery Business Analytics
Business Applications
Business Value
BI Component - Administration and Operation Layer
This layer consists of four components-
BI AND DW
1. BI Architecture BI ARCHITECTURE (DATA WAREHOUSE)
OPERATIONS
a. Data
b. Integration ADMINISTRATION
c. Information AND
OPERATION LAYER
d. Technology
e. Organization
2. BI and DW Operations DATA RESOURCE
ADMINISTRATION
BUSINESS
APPLICATIONS
a. Backup and restore
b. Security
c. Configuration and Management
d. Database Management
3. Data Resource Management
a. Data Governance
b. Metadata management
4. Business Applications
BI Component - Administration and Operations Layer -
BI Architecture
• Should follow design standards
DATA • Must have a logically apt data model
• Metadata should be of high standard
• Performed according to business semantics and rules
• During integration, certain processing standards have
INTEGRATION
to be followed
• Data must be consistent
• Information derived from data that has been
INFORMATION integrated should be usable, findable and as per the
requirements
• Technology used for deriving information must be
accessible
TECHNOLOGY • Also, it should have a good user-interface
• Should support analysis, decision support, data and
storage management
• Consists of different roles and responsibilities, like
ORGANIZATION
management, development, support and usage roles
BI Component - Administration and Operations Layer – BI and
DW Operations
Data Warehouse (DW) administration requires the usage of various tools to
monitor the performance and usage of the warehouse, and perform
administrative tasks on it. Some of these tools would be:
• Backup and restore
• Security
• Configuration management
• Database management
Data resource administration: Involves data governance and metadata
management.
Data governance is a technique for controlling data quality, which is used to
assess, improve, manage and maintain information. It helps to define
standards that are required to maintain data quality. The distribution of roles
for governance of data is as follows:
• Data ownership
• Data stewardship
• Data custodianship
BI Component - Administration and Operations Layer– BI and DW
Operations
Metadata management: Metadata is data about data.
Consider CD/DVD of music. There is the date of recording, the name of the artist, the genre of music, the
songs in the album, copyright information, etc. All this information constitutes the metadata for the CD/DVD
of music. In the context of a camera, the data is the photographic image. The metadata then is the date and
time when the was taken. In simple words, metadata is data about data. When used in the context of a data
warehouse, it is the data that defines the warehouse objects. Few examples of metadata are timestamp at
which the data was extracted, the data sources from where metadata has been extracted, and the missing
fields/columns that have been added by data cleaning or integration processes. Metadata management
involves tracking, assessment, and maintenance of metadata.
Metadata can be divided into four groups:
– Business metadata
– Process metadata
– Technical metadata
– Application metadata
Business Metadata Process Metadata Technical Metadata Application Metadata
Source/target maps Data locations
Data definitions Data access history:
Transformation rules Data formats
Metrics definitions Who is accessing?
Data cleansing rules Technical names
Subject models Frequency of access?
Extract audit trail Data sizes
Data models When accessed?
Transform audit trail Data types
Business rules How accessed?
Load audit trail Indexing
Data rules etc.
Data quality audit Data structures
Data owners/stewards, etc.
etc. etc.
BI Component - Administration and Operations
Layer – Business Applications
The application of technology to produce value for the
business refers to the generation of information or
intelligence from data assets like data warehouses/data
marts. Using BI tools, we can generate strategic,
financial, customer, or risk intelligence. This information
can be obtained through various BI applications, such as
DSS (decision support system), EIS (executive
information system), OLAP(On-line analytical
processing), data mining and discovery, etc.
BI Component Framework
Business Requirement
BI Architecture
Data Resource Administration
Data Warehousing
Data Sources
Program Management
BI & DW Operations
Data Acquisition, Cleaning & Integration
Development
Data Stores
Information Services
Information Delivery Business Analytics
Business Applications
Business Value
BI Component – Implementation Layer
The implementation layer of the BI component framework consists
of technical components that are required for data capture,
transformation and cleaning, data into information, and finally
delivering that information to leverage business goals and produce
value for the organization.
1. Data Warehousing
1. Data Sources
2. Data Acquisition, Cleaning, and Integration
3. Data Stores
2. Information Services
1. Information Delivery
2. Business Analytics
BI Component - Implementation Layer
DATA WAREHOUSING INFORMATION SERVICES
INFORMATION
DATA DELIVERY
DATA ACQUISITION, DATA
SOURCES CLEANING AND STORES
INTEGRATION
BUSINESS
ANALYTICS
BI Component – Implementation Layer – Data
Warehousing
It is the process which prepares the basic repository of data (called
data warehouse) that becomes the data source where we extract
information from.
Date Warehouse: A data warehouse is a data store. It is structured
on the dimensional model schema, which is optimized for data
retrieval rather than update.
Data warehousing must play the following five distinct roles:
– Intake
– Integration
– Distribution
– Delivery
– Access
Implementation Layer
BI Component – Implementation Layer – Information Services
• It is not only the process of producing information; rather, it involves
ensuring that the information produced is aligned with business
requirements and can be acted upon to produce value for the company.
• Information is delivered in the form of KPI’s, reports, charts, dashboards or
scorecards, etc., or in the form of analytics.
• Data mining is a practice used to increase the body of knowledge.
• Applied analytics is generally used to drive action and produce outcomes.
Answer a Quick Question
Is BI only for managers?
Who is BI for?
It is a misnomer to believe that BI is only for managers or the executive class. True, it
is used more often by them. But does that mean that BI can be used only for
management and control? Thus, the answer is: NO!
Types of BI Users
Type of user Casual users/ Power users/Information
Information consumers producers
Example of Executives, managers, SAS, SPSS developers,
such users customers, suppliers, administrators, business
field/operation workers, analysts, analytical
etc. modelers, IT professionals,
etc.
Usage Information consumers Information producers
Data Access Tailor made to suit the Ad hoc/exploratory
needs of their respective
role
Tools Pre-defined Advanced Analytical/
reports/dashboards Authoring tools
Sources Data warehouse/Data Data Warehouse/Data
Marts Marts (both internal and
external)
BI Applications
BI applications can be divided into:
• Technology solutions
– DSS
– EIS
– OLAP
– Managed Query and Reporting
– Data Mining
• Business Solutions
– Performance Analysis
– Customer Analysis
– Market Place Analysis
– Productivity Analysis
– Sales Channel Analysis
– Behavioral Analysis
– Supply Chain Analysis
BI Roles and Responsibilities
Program Roles Project Roles
Business Manager
BI Program Manager BI Business Specialist
BI Data Architect BI Project Manager
BI ETL Architect Business Requirements Analyst
BI Technical Architect Decision Support Analyst
Metadata Manager BI Designer
BI Administrator ETL Specialist
Data Administrator
BI DW Best Practices
The list of best practices is adapted from an article TDWI’s FlashPoint
e-newsletter of April 10, 2003.
• Practice “User First” Design
• Create New Value
• Attend to Human Impacts
• Focus on Information and Analytics
• Practice Active Data Stewardship
• Manage BI as a long term investment
• Reach out with BI/DW solutions
• Make BI a business Initiative
• Measure Results
• Attend to strategic Positioning
Do It exercise
Visit www.tdwi.org to read more about BI DW best practices
Open Source BI Tools
RDBMS MySQL, Firebird
Pentaho Data Integration (formerly
ETL Tools
called Kettle), SpagoBI
Analysis Tools Weka, RapidMiner, SpagoBI
Reporting Tools/Ad Hoc
Pentaho, BIRT, Actuate, Jaspersoft
Querying/Visualization
Popular BI Tools
