Business Intelligence - What is it?

Business Intelligence is a process for increasing the competitive advantage of a

business by intelligent use of available data in decision making. This process is
pictured below.

The five key stages of Business Intelligence:

• Data Souring
• Data Analysis
• Situation Awareness
• Risk Assessment
• Decision Support

Data sourcing
Business Intelligence is about extracting information from multiple sources of
data. The data might be: text documents - e.g. memos or reports or email
messages; photographs and images; sounds; formatted tables; web pages and
URL lists. The key to data sourcing is to obtain the information in electronic form.
So typical sources of data might include scanners, digital cameras, database
queries, web searches, computer file access, etc.

Data analysis
Business Intelligence is about synthesizing useful knowledge from collections of
data. It is about estimating current trends, integrating and summarizing disparate
information, validating models of understanding, and predicting missing
information or future trends. This process of data analysis is also called data
mining or knowledge discovery. Typical analysis tools might use the following:

Probability theory - e.g. Classification, Clustering and Bayesian networks;

Statistical methods - e.g. Regression;
Operations research - e.g. queuing and scheduling;
Artificial intelligence - e.g. Neural networks and fuzzy logic.

Situation awareness
Business Intelligence is about filtering out irrelevant information, and setting the
remaining information in the context of the business and its environment. The
user needs the key items of information relevant to his or her needs, and
summaries that are syntheses of all the relevant data (market forces, government
policy etc.). Situation awareness is the grasp of the context in which to
understand and make decisions. Algorithms for situation assessment provide
such syntheses automatically.

Risk assessment
Business Intelligence is about discovering what plausible actions might be taken,
or decisions made, at different times. It is about helping you weigh up the current
and future risk, cost or benefit of taking one action over another, or making one
decision versus another. It is about inferring and summarizing your best options
or choices.

Decision support
Business Intelligence is about using information wisely. It aims to provide
warning you of important events, such as takeovers, market changes, and poor
staff performance, so that you can take preventative steps. It seeks to help you
analyze and make better business decisions, to improve sales or customer
satisfaction or staff morale. It presents the information you need, when you need
it.

Difference between Database,Datamart and Datawarehouse

Collections of Data: Bases, Marts, Warehouses

-- A database is an organized collection of information.

-- A data warehouse is a very large database with special sets of tools to extract
and cleanse data from operational systems and to analyze data.
-- A data mart is a focused subset of a data warehouse that deals with a single
area of data and is organized for quick analysis.

The explosion of e-business - and the massive amount of data it created - has
made data management and organization more important than ever.

We often hear the terms database, data warehouse and data mart, but the
differences among them aren't always clear.

Some experts say that the difference between, say, a data mart and a data
warehouse is more conceptual than real. Nonetheless, here are some general
rules of thumb to sort out these terms.

Database Management System

A datum is a raw piece of information that's capable of being moved and stored.
In the broadest sense, a database is a collection or aggregation of such data,
along with information on how pieces of data relate to one another. A database is
typically organized into records - one record per item, such as an order - that are
themselves divided into several fields, with each field containing information
about a specific aspect or attribute of the item. For an order, these could include
customer data, part numbers, prices and discounts.
In theory, a database doesn't even require a computer, but it certainly makes its
use a lot more scalable and efficient. A pocket address book is certainly a
database, but searching contact entries by city or industry requires flipping
through each page.
Database management systems, such as those from Microsoft Corp., Oracle
Corp. or IBM, act as the underlying vault and retrieval technology.

In addition to storing data, a database management system handles security and

access control, Business intelligence tools then access this data for analysis.
However, databases rarely exist just to run analytical operations; in general,
they're vital to running a business.
Database management systems can be organized in different ways. A relational
database stores information in tables and then joins or combines those tables
across common fields. A hierarchical database stores data in a tree structure; an
order record might have every line item underneath it. An object-oriented
database encapsulates both data and business logic.

Datawarehouse and Datamarts

Data warehouses and data marts are very similar technologies, say experts, but
they usually service different types of clients. For instance, a warehouse typically
contains a massive amount of data from across an enterprise.Data marts tend to
be smaller and dedicated to a single division or line of business. Data
warehouses are "similar to a real food warehouse, storing massive amounts of
food and then distributing subsets of food to grocery stores [the marts] for people
to access [or] purchase," .

A data mart can run in size from megabytes to gigabytes, whereas data
warehouses usually run from gigabytes to terabytes. Consider a data mart that
supports a firm's cellophane-tape division. It might contain relevant facts about
making cellophane tape - suppliers, deliveries, rates, quality control
information.However, the uncontrolled proliferation of such data marts can
become an IT nightmare unless each data mart uses standard naming and
cataloging schemes and compatible data types. The last thing you want are data
marts that can't talk to one another.
Users tend to assemble a warehouse from different pieces of technology, then
customize it to meet their needs, rather than just put it together out of the box.

Warehouses are often built using relational databases, because the relational
model can more efficiently store and organize the huge amounts of information
that make up a high-volume, multipurpose data warehouse. However, getting
data from many large relational tables can require massive amounts of
processing and storage.

For that kind of slice-and-dice analysis, data marts use multidimensional

databases geared for quick responses with multiple elements. Often-selected
data from a data mart is fed into a smaller database called a data cube for
intensive processing.
FYI

To build datawarehouse system, ETL (Extraction, Transformation, Loading) tools

are used. Informatica is an ETL tool which is widely used.

There are OLAP (On Line Analytical Processing) tools available to do slice,dice
analysis on the data stroed in the datamarts/datawarehouse. Commonly used
OLAP tools are Cognos, Microstrategy, Oracle OSA/OFA, SAP BIW