Understanding Business Intelligence and Related Terminology

UNDERSTANDING BUSINESS INTELLIGENCE AND RELATED TERMINOLOGY

Or, what is the difference between the terms Business Analysis, Business Intelligence, Business Metrics, Management Reporting, Custom Reporting, Data analytics.

I hear confusion from both my colleagues and our clients because somebody wants a report not in QuickBooks, yet we can build it with Business Intelligence tools - that are called Business Analysis.  See what I mean?  I would be confused too.

The purpose of this month's article is to create a glossary of terms, and attempt to clarify the subtle - but distinct differences among the various nomenclature used to describe data extraction and reporting.

GLOSSARY OF TERMS

Let's start with Business Intelligence.  This is a term that was coined in 1989 and adopted the following year by Business Objects, but has become a buzzword - and umbrella - to represent a plethora of data aggregation methods and software available on the market today.

In simple terms, Business Intelligence is a method of analyzing historical data to predict future results. It can take the form of graphing and/or columnar data, but it's strength lies in the ability to drill down from summary data - whether it is graphed or not.  An example would be drilling down on sales figures, starting with year, then drilling down to a particular quarter, and then to a month(s) within that quarter.

Business Intelligence can also take the form of alerts - although it is less known for this feature set.  I will deal more with this in a future article.

Business Objects is a piece of SOFTWARE that was originated by the company of the same name.  The COMPANY Business Objects was bought by SAP about a year ago.  So the name Business Objects is currently used to describe the current SOFTWARE OFFERING. Additionally Crystal Reports is now part of SAP, as part of their buyout of Business Objects.

Web Intelligence is a term used by SAP/Business Objects to describe their web based Business Intelligence software offering.  Sometimes it is called “webi” for short.

Business Analysis is a term coined by Intuit for their hosted on-demand web intelligence offering - Business Analysis ES.  It is built using the Business Objects software tools, and used by companies to build Business Intelligence documents, assets, reports, etc.  So there is no distinction here between Business Analysis and Business Intelligence, other than a way for Intuit to segment their offering.

Management Reporting.  Historically, this is the most prevalent nomenclature for data and reporting that shows things like project status, profit and loss, budget vs. actual, etc.  They are generally documents reviewed by upper management, with minimal detail.

Daily Operational Reporting.  This reflects the type of reporting used by bookkeepers on a daily or routine basis - and mostly used to scan for errors, data entry problems, or even backup for a management report.  These are the types of reports most often found in QuickBooks or any accounting package – and are typically off the shelf.

Custom Reports.  Custom denotes something that is not off the shelf, or needs additional manipulation that the accounting package does not provide.  Both management reporting and daily operational can fall in this category. 

NOTE:  If I could create the same kind of management reporting using the Business Objects Web Intelligence tools, I would not call it custom reports.  Why?  Because the Business Objects tools have re-organized that data such that ANYTHING you do with the tool set, is "off the shelf" i.e. we don't have to combine several QuickBooks reports to create one new one.  You might need someone with advanced knowledge of the tools to create an elaborate widget or data set; thus someone might say "can you customize this for me?"; but again I wouldn't call it a custom report.  I *might* call it customization.

So what are Data Analytics?  This is an "pre" Business Intelligence term that engages the use of quadratic equations, simple regressions, or statistical analysis.  More than often it wasn't graphed, but if it was, the final output might have been somewhat unrecognizable – or not understandable.

Dashboard. This is a term that tends to be overused IMHO, but generally refers to a series of data snippets that you want to glance at - without all of the detail.  It could be something as simple as seeing three figures on a sheet of paper:  Yesterday's sales, Month to date sales, and current bank balance.  Or it could be elaborate as something with sliders, gauges – that you might see using XCelsius. 

The thinking behind these "fancier" dashboards, is that graphical elements give a quicker picture of the data you are glancing at.  In general, there are a plethora of new tools available that operate on this premise - graphical is pleasing to the eye, and even allows you to consume more data points with a single glance.

Last but not least is a term call data metrics, or business metrics.  This refers to a finite set of management reports, dashboards, or business intelligence documents that allow business owners to measure various stages and operations of their business.  The metrics might be comprised of dashboards, management reports, or forms of business intelligence; and they typically cover multiple areas of the business.

For instance: total number of leads, percent of leads closed, opportunities and percent closed, market share, year over year sales, seasonal trends, variable costs, overhead costs, expense vs. sales ratios, liquidity ratios, etc. All are ways of measuring your business to see how you are doing, to see how close you are to your expectations, or to glean information with which to make future decisions.

Data metrics are a function of how you measure your business - not the tools you use to monitor those measures.

I hope your head is not swirling after reading all of the descriptions.  As one gentleman told me:  “I don’t care what is called, I just want to see how my business is doing!”

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