There tends to be some confusion in the industry concerning Business Intelligence (BI) and Data Warehousing (DW). Some people conflate them into a single term – BI/DW (Business Intelligence/Data Warehouse) – and consider them to fundamentally be the same thing. Other people believe that a data warehouse merely stores information to form the back end of business intelligence, and that they are completely separate entities. As with many conflicts, the truth depends upon your point of view.
What are Business Intelligence & Data Warehousing?
According to the Kimball Group, “…data warehousing was relabeled as ‘business intelligence.’ This relabeling was far more than a marketing tactic because it correctly signaled the transfer of the initiative and ownership of the data assets to the business.” While the concept that the users of business data should have ownership of the information, it implies that the storage and access of data (i.e. – data warehousing) is the same as analyzing and interpreting it (i.e. – business intelligence).
To understand how BI & DW work together, first we need to separate the concept of business intelligence from the tools which support it. Business Intelligence is based upon collecting information from across a company’s entire enterprise, and analyzing the data to form global views and reports. BI Tools, such as QlikView, Tableau, or IBM Cognos, are software applications that facilitate BI analysis by creating visualizations, reports, and enabling OLAP (online analytical processing). Data warehouses are another facet of a BI toolset, and are concerned with aggregating data.
A data warehouse is designed to “…consolidate data from disparate databases and to better support strategic and tactical decision making needs…”. Simply put, a data warehouse is intended to help companies achieve a single version of the truth by consolidating information from multiple systems.
Now that the concepts are settled, let’s move on to how business intelligence tools and data warehouses can be used together.
Purpose of Intelligence Systems
The true power of a business intelligence system which relies upon a data warehouse comes from using conformed data dimensions to help analyze and drive business decisions. For example, one system may refer to a customer as someone who has purchased goods within the past twelve months. Another system may define a customer as any company who has ever been in contact about services. “The key insight is that the entire dimension… does not need to be made identical across all subject areas (Kimball Group, Eight Guidelines for Low-Risk Enterprise Data Warehousing)”.
By analyzing data warehoused information based upon dimension, rather than discrete data points, a business intelligence solution can enhance a company’s plans and bottom line. By using BI/DW, a company’s best customers and most profitable avenues can easily be identified based upon multiple criteria. This knowledge can then be used to influence future enterprise direction.
Continue your research of business intelligence and data warehousing with our interactive requirements template.