Wednesday, June 4, 2008

What is Business Intelligence

Business Intelligence, commonly referred to as BI, provides historical, current, and predictive views of business operations, most often using data that has been gathered into a data warehouse or a data mart as well as operational data. The software elements of BI support reporting, interactive "slice-and-dice" pivot-table analyses, visualization, and statistical data mining. It is these capabilities that the Pentaho software provides on a freely distributable basis based on standard Open Source Licenses without the absurd cost of licensing fees. Software license costs are very common with many BI vendors, a.k.a. our competition. ( more on this later )
Pentaho Reports and Analysis in a portalEvery time you interact with an organization, data is being captured. Sales transactions, bank deposits, stock trades, doctor visits, blood tests, educational test scores, sports stats and more are all collected in some sort of fashion. These transactions, or data, are entered into a transactional computer system of databases. In order to view this data so that it provides useful information for decision making, a number of processes and methodologies can be followed. Usually the information is extracted into another database form, such as a data warehouse, that is fit for reporting. Reports are then created to fill a need to know something more about this data that was entered. For example, if I wanted to know what were the total sales, profits and costs of a particular item I was selling in my business, I would use BI software to figure that out. I could then analyses this report to make a decisions on what to sell or not to sell in the future.

Pentaho Reports and Analysis in a portalYou might be using some sort of BI today in your very own homes. If you are using Microsoft Money or Quicken, for example, you are storing transactional data about your banking, credit cards and spending habits. You then can review a chart or report on which items you have spent the most on in the past month. (If it's anything like ours its usually the mortgage and then groceries.) Simply by looking at the report, I know that there isn't much I can do about my mortgage except maybe refinance. As far as my grocery spending, I could cut coupons or shop at Sam's Club to try and lower my grocery bills. I wouldn't know to take these actions without looking at these reports. So therefore I took the raw data, my spending transactions, and created a report which told me where my spending was the highest. This in turn made me take action to adjust my spending by finding another location to shop that might be cheaper or to start cutting coupons. BI transforms data into information and that information into action. This happens everyday and in many industries. One of the problems facing these industries is that they don't have sufficient BI today. An additional problem is that most proprietary BI vendors are being bought out by larger companies such as IBM, Oracle and SAP. What does that means for businesses who need BI software? Expense software just got more expensive. That is were Open Source software and the Open Source Business model comes in.

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