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Measuring the Value of
ntelligence In
Business Intelligence
By Soumendra Mohanty
I
ntelligence is the ability to solve customers? How can we use the trend to actionable insights.
problems. It is also commonly predict what will happen in the future? The economic benefit of BI is often com-
referred to as practical sense or the ' BI is intelligence based on business plex and difficult to quantify. Several faCTors
ability to get along well in all sorts of information, past actions and strategies may contribute to the overall revenue or prof-
situations. People cannot see, hear, touch, for the future. itability statistics tbat an organization needs
smell or taste intelligence. On the other BI is all about achieving greater prof- to measure. A common factor in determining
hand, the more intelligence people bave, itability by analyzing huge amounts of economic benefit is ROI on BI strategies or
the better their ability to respond to situ- data and numbers - presenting them, other metrics that quantify the number of
ations around them. qualifying tbe assessments, finding trends sales, number of new customers acquired, etc.
On a similar note, we can define and issues hidden in them, empowering These numbers tell us how many and how
intelligence in business intelligence (BI) as action to resolve issues and providing much. Other faaors sucb as customer cen-
the ability to realize business success with
easy access to actionable mformation Figure 1: Intelligent Business Paradigm
througb timely and accurate insight into
business conditions. It is crucial to exam-
Data Business
ine BI initiatives from the perspective of
Structured. Drivers
the value created. If decision-makers do
Unstructured, Forces that
not understand the economic benefit gen- Quantitative, cause the need
erated by BI, they may grow to distrust Qualitative to act
the recommendations it generates. They
may return to strategy by intuition and
prioritization based on a hunch.
How are data, information, intelli- Information Business Goals
gence and BI interrelated? Facts, Metrics Desired Outcomes,
' Data generated by business events is Actions
raw witbout context, like customer
data, product data and transactions.
' Infonnation is data with context and r • •
Intelligence (tnformation+Action) Business Strategies
meaning; for example, information
Trends, insights, Discoueof, Planned means to achieve goals, :
about product purchases made hy the
Decision Enablers Actions to implement strategies •
specific customers.
' Intelligence is actionable mformation
insight and is used hy various informa- Predictive Outcomes Business Results
tion consumers to achieve business
objectives: Which group of customers Value
buys which products? Is there a trend Performance, Profitability ^ •••'
cess or failure?
Answers to these questions He in
monitoring business operations, learning lent transactions) for identifying and actions to be taken when the intelligence
from past performance and then feeding addressing specific business issues. nuggets identify business problems that
the learnings back into transactional sys- In order to do this, tbe BI system must require urgent attention.
tems, thus forming a closed-loop per- provide easy-to-use self-service intelligence Accessibility to information and
formance measurement and optimization nuggets that enable rapid decision-making, exchange of information across the enter-
process. Tbe output of BI applications ideally leading to decision automation prise provide early insight to business
(actionable analytics) gets routed to busi- through decision trees. There should also opportunities and disruptions, thus lead-
ness users in the form of business alerts be a methodology ¡either formal or infor- ing to business agility. Information archi-
and recommendations (such as product mal) to help organizations assign respon- tecture is a key component to achieving
pricing changes, marketing campaign sibilities to specific business users for business agility, and it must underpin
modifications or identification of fraiidu- handling BI applications and to define clear metrics measuring tbe impact of