THE ARCHITECTURE OF BI

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 A High-Level Architecture of BI
Data Warehouse Business Analytics Performance and
Environment Environment Strategy
Data Technical staff Business users Managers / executives
Sources Built the data warehouse Access
Data
ü Organizing Warehouse BPM strategy
ü Summarizing Manipulation
ü Standardizing Results

User Interface
Future component - browser
intelligent systems - portal
- dashboard

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 The Architecture of BI
• A BI system has four major components
1. A data warehouse, with its source data
2. Business analytics, a collection of tools for manipulating,
mining, and analyzing the data in the data warehouse
3. Business performance management (BPM) for monitoring
and analyzing performance
4. A user interface (e.g., dashboard)

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 Components in a BI Architecture
1. Data Warehouse
• Cornerstone of any medium-to-large BI
system.
• Originally, only historical data
• Today access to current data as well, so
they can provide real-time decision
support

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 Components in a BI Architecture
2. Business analytics
tools and techniques that help the user transform
data into knowledge
1. Reports and Queries
» Static, dynamic, multidimensional, drill-down
2. Advanced Analytics
 Financial data visualization , Web Analytics, GIS
3. Data, Text, Web mining and other sophisticated
mathematical/ statistical modeling
» Cross sell / up sell
» forensic audit in case of high profile wilful defaulters

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 Components in a BI Architecture
3. Business performance management (BPM) /CPM –
Corporate Performance Mgmt
An advanced performance measurement and
analysis approach that embraces planning and
strategy
– BPM extends the monitoring, measuring, and comparing
of sales, profit, cost, profitability, and other performance
indicators by introducing the concept of management and
feedback
– BPM provides a top-down enforcement of corporate-wide
strategy
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 Components in a BI Architecture
4. User Interface (i.e., dashboards)
• provide a comprehensive graphical/pictorial view of
corporate performance measures, trends, and
exceptions.

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 Data Warehousing

Definition and Concepts , Process

overview

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 A Simple Definition
A data warehouse is a collection of
data created to support decision-
making applications.

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 Data warehouse
A physical repository where relational data are
specially organized to provide enterprise-wide,
cleansed data in a standardized format

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 Data Warehouse Characteristics
• Subject oriented
– data -organized around sales, products, employees , etc.
• Integrated
– data - integrated to provide a comprehensive view
• Time variant (think time series)
– historical data is maintained
• Nonvolatile
– data is not updated by users

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 Three Types of Data Warehouse
• Data Marts
• Operational data stores (ODSs)
• Enterprise data warehouses (EDWs).

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 Data Mart
A departmental small-scale “DW” that
stores only limited/relevant data
 Dependent data mart
A subset that is created directly from a data
warehouse
 Independent data mart
A small data warehouse designed for a
strategic business unit or a department
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 Types of Datawarehouses
Enterprise Data Warehouse -
Operational data stores (ODS) EDW
• A type of database often • A data warehouse for the
used as an interim staging enterprise.
area for a data warehouse • Large scale
• CRM,SCM,BPM
• Short term decision making
–mission critical
applications

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 Other DW Components
Metadata
Data about data. In a data warehouse, metadata
describe the contents of a data warehouse and the
manner of its acquisition and use

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Source: Inmon
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Data Warehouse Vs. Data
Warehousing

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 A Generic DW Framework
No data marts option
Data Applications
Sources (Visualization)
Access
Routine
ERP Business
ETL
Reporting
Process Data mart
(Marketing)
Select

/ Middleware
Legacy Metadata Data/text
Extract mining
Data mart
(Engineering)
Transform Enterprise
POS Data warehouse
OLAP,
Integrate

API
Data mart Dashboard,
(Finance) Web
Other Load
OLTP/wEB
Replication Data mart
(...) Custom built
External
applications
data

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Components of the Data Warehousing
Process
1. Data Sources 4. Comprehensive
– Legacy, External Data database -EDW
Providers 5. Metadata
2. Data extraction and 6. Middleware Tools
transformation – Enable access to the DW
– custom-written or – e.g. BO
commercial software
called ETL
3. Data loading

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The Extraction, Transformation, and Load
(ETL) Process

Packaged Transient
application data source

Data
warehouse

Legacy
Extract Transform Cleanse Load
system

Data mart
Other internal
applications

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 Corrected Data
Parsed Data First Name: Beth
First Name: Beth Middle Name: Christine
Middle Name: Christine Last Name: Parker
Last Name: Parker Title: SLS MGR
Title: SLS MGR Firm: Regional Port Authority
Firm: Regional Port Authority Location: Federal Building
Location: Federal Building Number: 12800
Number: 12800 Street: South Butler Drive
Street: Lake Calumet City: Chicago
City: Hedgewisch State: IL
State: IL Zip: 60633
Zip+Four: 2398

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Standardisation

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Matching

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 Consolidation
Account No.
83451234 Policy No.
ME309451-2

Transaction
B498/97
Account No.
83451234 Policy No.
ME309451-2

Transaction
B498/97 28
Data Warehousing Architecture

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 DW Architecture
• Three-tier architecture
1. Data acquisition software (back-end)
2. The data warehouse that contains the data & software
3. Client (front-end) software that allows users to access and analyze
data from the warehouse
4. Easy to create datamarts
5. Functionally separate
• Two-tier architecture
First two tiers in three-tier architecture is combined into one
… sometimes there is only one tier?

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DW Architectures

Tier 1: Tier 2: Tier 3:

Client workstation Application server Database server

Tier 1: Tier 2:
Client workstation Application & database server

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REPRESENTATION OF DATA IN DW
X axis (periods 2001, 2003, and 2003), the Y axis (regions), and the 33
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Z axis (products--front to back).
Data – Dimension

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 Dimensions

• What is a dimension ?
– Dimensions are perspectives with respect to
which an organization wants to keep record.
– products, salespeople, market segments, business
units, geographical locations, distribution
channels, country, or industry
• Time is usually an important dimension by default

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 Measures
• Measures are used to report the values of the
particular variable with respect to a given set
of dimensions.
 money, sales volume, head count, inventory profit, actual versus
forecast

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 Multidimensionality
The ability to organize, present, and analyze data by
several dimensions, such as sales by region, by product,
by salesperson, and by time (four dimensions)
• Multidimensional presentation
– Dimensions: products, salespeople, market segments,
business units, geographical locations, distribution channels,
country, or industry
– Measures: money, sales volume, head count, inventory
profit, actual versus forecast
– Time: daily, weekly, monthly, quarterly, or yearly
 Representation of Data in DW
• Dimensional Modeling
– A retrieval-based system that supports high-volume query
access
• Star schema
– The most commonly used and the simplest style of
dimensional modeling
– Contain a fact table surrounded by and connected to
several dimension tables
• Snowflakes schema
– An extension of star schema where the diagram resembles
a snowflake in shape
 Example of Star Schema
time
time_key item
day item_key
day_of_the_week Sales Fact Table item_name
month brand
quarter time_key type
year supplier_type
item_key
branch_key
branch location
location_key
branch_key location_key
branch_name units_sold street
branch_type city
dollars_sold province_or_street
country
avg_sales
Measures
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Han: Data Cubes 39
 Example of Snowflake Schema

time
time_key item
day item_key supplier
day_of_the_week Sales Fact Table item_name supplier_key
month brand supplier_type
quarter time_key type
year item_key supplier_key

branch_key
branch location
location_key
location_key
branch_key
units_sold street
branch_name
city_key city
branch_type
dollars_sold
city_key
avg_sales city
province_or_street
Measures country
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ACCESSING DATA IN DW
 Why Data Warehouse ?
• Everybody stores data in a database..

• Why should the organization have a data

warehouse ?

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 Data and Decisions
• Database
– Throughput high for
transactional data..
– IRCTC
• Who has booked tickets in the
last week ?
– ICICI Bank
• Does the Kelambakkam ATM
have enough cash ?
• Data warehouse
– Analysis / Analytics
– Higher order decision making
– IRCTC
• Which route can benefit using
tatkal pricing ?
• Which route is optimum for freight
carriers
– MakeMyTrip
• Who can I cross sell an
international holiday to
– ICICI Bank
• What is the frequency at which
ATMs in different locations need to
be loaded?
• Optimal Routes
• Fraud Protection

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 Data and Decisions
• Apollo hospitals
– Demographic Profile of patients in the south
Chennai hospitals
– Geography and Asthma relationship
• How can the Government of India use a
datawarehouse ?

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OLAP vs. OLTP
OLAP Operations

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1. Slice
Slice is a subset of a
multidimensional array

Usually 2D

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 A 3-dimensional
OLAP cube with Sales volumes of

OLAP
slicing
operations
a specific Product
on variable Time
and Region

Slicing
Operations on a

e
m
Ti
Simple Three- Product

Dimensional

Geography
Cells are filled
Sales volumes of
Data Cube
with numbers
representing a specific Region
sales volumes on variable Time
and Products

Sales volumes of
a specific Time on
variable Region
and Products

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2. Dice

Slice on more
than two
dimensions of a
data cube

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 Drill down

From higher level summary

to lower level summary
Detailed data, or
introducing new
dimensions

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Roll up

Summarize data by
climbing up hierarchy or
by dimension reduction

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Pivot
It is used to
change the
dimensional
orientation of a
report or an ad
hoc
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Business Performance
Management

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 A High-Level Architecture of BI
Data Warehouse Business Analytics Performance and
Environment Environment Strategy
Data Technical staff Business users Managers / executives
Sources Built the data warehouse Access
Data
ü Organizing Warehouse BPM strategy
ü Summarizing Manipulation
ü Standardizing Results

User Interface
Future component - browser
intelligent systems - portal
- dashboard

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 Business Performance Management
(BPM) Definition
• What is it ?
– Framework that helps organizations deliver critical
insight to improve financial and operational
performance
• What does the framework specify ?
– Framework for organizing, automating, and
analyzing business methodologies, metrics,
processes, and systems

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 Business Performance Management
(BPM) Overview
• BPM and BI Compared
– BPM is an outgrowth of BI and incorporates many
of its technologies, applications, and techniques
– BPM is an enterprisewide strategy that seeks to
prevent organizations from optimizing local
business at the expense of overall corporate
performance
– BPM is part of the daily work of managers

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 Major BPM Processes
• Strategize
• Setting goals and objectives
• Plan
– Establishing initiatives and plans to achieve those
goals
• Monitor
– Monitoring actual performance against the goals
and objectives
• Act and Adjust
– Taking corrective action
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Business Performance Management
(BPM) Overview
 Strategize:
Where Do We Want to Go?
• Strategic planning
– Tasks common to the strategic planning process:
1. Conduct a current situation analysis
2. Determine the planning horizon
3. Conduct an environment scan
4. Identify critical success factors
5. Complete a gap analysis
6. Create a strategic vision
7. Develop a business strategy
8. Identify strategic objectives and goals
 Strategize:
Where Do We Want to Go?
• Strategic planning
– Strategic objective
A broad statement or general course of action
prescribing targeted directions for an organization
– Strategic goal
A quantified objective with a designated time
period
 Strategize:
Where Do We Want to Go?
• Strategic planning
– Strategic vision
– A picture or mental image of what the
organization should look like in the future
– Critical success factors (CSF)
Key factors that delineate the things that an
organization must excel at to be successful in its
market space
 Strategize:
Where Do We Want to Go?
• The strategy gap
– Four sources for the gap between strategy and
execution:
1. Vision
2. People
3. Management
4. Resources
 Plan:
How Do We Get There?
• Operational planning
– Operational plan
Plan that translates an organization’s strategic
objectives and goals into a set of well-defined
tactics and initiatives, resources requirements,
and expected results
 Plan:
How Do We Get There?
• Operational planning
– Tactic-centric plan—tactics are established to
meet the objectives and targets established in the
strategic plan (used by best practices
organizations
– Budget-centric plan—a financial plan or budget is
established that sums to the targeted financial
values
 Plan:
How Do We Get There?
• Financial planning and budgeting
– An organization’s strategic objectives and key
metrics should serve as top-down drivers for the
allocation of an organization’s tangible and
intangible assets
– Resource allocations should be carefully aligned
with the organization’s strategic objectives and
tactics in order to achieve strategic success
 Monitor:
How Are We Doing?
• A comprehensive framework for monitoring
performance should address two key issues:
– What to monitor
– How to monitor
 Monitor:
How Are We Doing?
• Diagnostic control system
– Inputs, a process for transforming inputs into
outputs, a standard against which to compare
these outputs, and a feedback channel allowing
information on variances to be communicated so
that it can be acted upon.
• Management by exception
– Don’t have to constantly monitor
– Scheduled and Exception reports

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 Monitor:
How Are We Doing?
Business
Strategy

Strategic
Objective

Strategic
Goal

Business Business Business Variance

Input Processes Output Analysis

Feedback

Figure 9.2 Diagnostic Control System

 Monitor:
How Are We Doing?
• Pitfalls of variance analysis
– The vast majority of the exception analysis focuses
on negative variances when functional groups or
departments fail to meet their targets
– Rarely are positive variances reviewed for
potential opportunities, and rarely does the
analysis focus on assumptions underlying the
variance patterns
 Act and Adjust:
What Do We Need to Do Differently?
• Hackett Group’s benchmarking process
divides planning and management reporting
into four subprocesses:
1. Strategic planning
2. Operational and financial planning
3. Reporting
4. Forecasting
 Performance Dashboards
• Dashboards / Scorecards
– provide visual displays of important information
– consolidated and arranged on a single screen
– information can be digested at a single glance and
easily explored
Performance Dashboards
Scorecard
Major differences between a scorecard
and a dashboard
Characteristic Dashboard Scorecard
Purpose Measures Charts progress
performance
Users Supervisors, Executives,
specialists managers, staff
Updates “Right-time” Periodic
feeds snapshots
Data Events Summaries
Display Visual Visual graphs,
graphs, raw text comments
data
 Tactical and Strategic Dashboards
• Operational Dashboard • Tactical dashboard
– frontline workers and – Managers and analysts
supervisors – track detailed and
– monitor key operational summarized data
data that are lightly – departmental processes
summarized and projects on a daily
– Updated frequently or weekly basis.
throughout the day.
 Strategic Dashboard
• Strategic dashboard
– used by executives, managers, and staff
– monitor detailed and summarized data
– strategic objectives on a monthly or quarterly
basis.
 Planning your Dashboard
• Research your requirements:
– Dashboard Purpose
– Audience
– KPI’s (Key Performance Indicators)
– Time Period
– Data Source
– Frequency & Delivery
 Performance Measurement Systems
• Balanced Score Card (BSC)
– organization’s financial, customer, internal process,
and learning and growth objectives and targets
into a set of actionable initiatives
– Why is it “balanced”?
• Inclusion of non-financial measures
BPM Methodologies

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 BPM Methodologies

Strategy map
A visual display that delineates
the relationships among the key
organizational objectives for all four
BSC perspectives

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 BPM Methodologies
• Six Sigma
– More of a “process improvement” model
– The DMAIC performance model
A closed-loop business improvement model that
encompasses the steps of defining, measuring,
analyzing, improving, and controlling a process