The Role of Data Warehousing in Your Business Intelligence Architecture
Data warehousing (DW) is a core component of business intelligence (BI) architecture that assists in organising, cleaning, storing and extracting useful business data. In this piece we’ll look at how these two work together, and why they’re vital for modern business operations.
What is data warehousing (DW)?
Data is an important asset of any business, but the value of data to any organisation depends on its quality. Data warehousing is the process of collecting and managing data from a number of different sources. The data warehouse is effectively a secure, electronic storage of business data as a way to create a historical trove of data for future analysis and insight.
What is business intelligence (BI) architecture?
BI architecture then is the standards and policies used by a business for organising the data stored in the warehouse. This relies on several computer-based technologies and techniques which create BI systems that contribute towards data visualisation, reporting and analysis. Effectively, data warehousing is a component of BI architecture.
What are the differences between DW and BI?
While data warehousing and business intelligence cannot function without each other, it’s important to understand how they differ to get a full idea of what they bring to your business.
1. What they’re trying to achieve
- BI focuses on generating insights for business such as sales performance, forecasting and strategies. This allows you to analyse and explore actual measurable aspects of your business.
- DW is focused on data storage, providing the data foundation for BI systems and tools.
2. How they display data
- BI provides information through data visualisation, online dashboards and reports.
- DW shares data in dimensions and fact tables for BI applications.
3. Tools they use
- BI tools used include statistics, visualisation and data mining.
- DW uses data cleansing, data distribution, storage management, metadata management, recovery and backup planning.
4. Who uses it?
- BI is used by managers and C-level executives to create sales reports or strategic development forecasts.
- DW cannot be accessed by management as they don’t have the expertise. They rely on BI to translate the data into useful insights. Rather data engineers and back-end developers will work with DW.
What are the BI tools to consider?
If your business is looking into BI software, then it’s important to understand the various features available. You might want all or some of these features, depending on the business needs.
- Executive dashboards
- Location intelligence
- Interactive or ranking reports
- What-if analysis
- Predictive analytics
- Conditional formatting
- Drill downs
What are the components of BI and DW?
To better understand the benefit of BI and DW for your business, here’s a look at the process of creating a stable BI architecture.
Step1: Data collection
Data sources – such as enterprise resource planning (ERP) software, customer relationship manager (CRM) software, files, application programming interface (API) and more – provide the necessary data to be gathered by BI tools. Modern BI software picks up on data connectors and enables communication between different systems and departments. This minimises errors and outlines potential trends and patterns.
Step2: Data integration and storage
Once the data has been extracted from these disparate sources, it’s then loaded into the BI data warehouse through a process known as ETL (extract – transform – load). Once the data is extracted, it’s conformed into a clean format and loaded into the warehouse.
Step3: Data analysis
The BI application tools will be used to analyse data which can then be visually represented on dashboards or reports. Through data analysis, businesses are able to gain actionable insights into the operational and strategic efficiency of business.
Step4: Data distribution
Once the data has been effectively analysed, these insights can be shared with stakeholders for implementation into business development initiatives. Some of the ways data is distributed includes:
- Reports via email: The data reports can be shared with stakeholders on a daily, weekly or monthly basis.
- Dashboards: These can be shared with stakeholders; however, the data cannot be manipulated.
- Embedding: You can integrate the BI system into your application. This allows for customisation as well as making the report interactive and accessible.
Step5: Business decisions
Using data warehousing and business intelligence, stakeholders can make informed business decisions that are based on accurate data. This enables managers to make comprehensive strategic decisions, areas for cost reduction and notable patterns that are emerging. This creates a much more profitable business operation.
Who works with the BI and DW?
When dealing with such sensitive business information, it’s important to maintain strict security measures throughout the data process. Quality BI and DW tools will come with inbuilt security features with authentication required for edits. The main individuals working with both BI and DW include:
- BI developer: The developer is responsible for creating and improving the BI-driven solutions at the technical level. This includes performing the ETL, general management and maintenance of all the databases.
- BI architect: This individual is charged with the design and development of the entire customised BI solution. This includes all the platforms, processes and procedures for the centra data warehouse.
- Data analyst: This person is in charge of the data management processes, finding opportunities and insights for strategic decision-making.
- BI user: This is the average employee who doesn’t have the technical expertise but uses the BI dashboards to understand the business achievements and opportunities.
Why you need to implement DW into BI architecture
While it’s clear that there’s a lot that goes into the process of business intelligence and data warehousing, it provides businesses with the necessary advantage to remain competitive in the modern business market. Here’s a look at the reasons why DW and BI is so important for your business.
Read More: Why Invest in a Data Warehouse?
1. Automation of tasks
The IT department has long been overstretched with so many data-related tasks such as generating the performance reports. This is incredibly time-consuming and takes IT employees away from other cyber-related tasks they could be performing. With a BI architecture system, the creation of accurate reports is no longer an IT task, but is fully automated. This also means businesses don’t have to worry about hiring massive IT teams for report generation.
2. Increased efficiency
With the IT department focused on other business-driven tasks; stakeholders working from accurate, data-driven reports; and the automation allowing for real-time access to data, businesses are benefitting from increased efficiency overall.
3. Accuracy of data use
The power of data is understood by many businesses, but if it’s not used correctly, then it does more harm than good. The data collected comes from a number of different sources, available in different formats and applications making it incredibly difficult to manage. However, with BI architecture, unstructured data is no problem. Businesses are able to collate and analyse the data effectively.
4. Cost savings
It’s clear that BI architecture saves employees valuable time but it also saves companies a lot of money on salary costs as well as improved efficiency. This is because departments are not working in siloes any longer, rather they are interconnected through centralised data. This collaboration leads to improved operations and profitability.
To find out more about how you can use business intelligence architecture, get in touch with industry experts, Canvas Intelligence, a leading business intelligence company today.