Operational Business Intelligence

Understanding Operational Business Intelligence

Business intelligence essentially means any type of data, information, facts and knowledge that's part of a business operation. These can be sales figures, payroll data, demographic information, product and development information and basically any information that a business can use. Operational business intelligence is a bit more specific. This refers to the information a business uses in daily operations.

Without efficient sharing of operational business intelligence, a company is going to suffer breakdowns from small to large, be unable to properly grow and could even be flirting with massive disaster. A small issue, for example, can escalate into something very large very quickly if there's not good sharing of business intelligence, also commonly called BI. No operational intelligence, or incorrect intelligence, means that a company will create strategies and plans, and make decisions, that could very well be bad for the company.

Broad and general intelligence typically doesn't qualify as operational BI. But information that might be used on a daily basis, or even more than once within a day, to make important business decisions does qualify. Good information allows good business decisions to be made, and it allows them to be made faster. To have good BI, it's necessary to have good intelligence and information processing within the structure of the business.

This means that business transactions that take place, transactions that affect everything from inventory to income, need to be processed as fast as possible so that the changes can be reflected wherever they need to be. For instance, a company that has an inventory of 1,000 units and sells 500 in one large order that morning needs the IT infrastructure of the business to process that and apply it quickly. The inventory number needs to drop to the proper number everywhere it might be accessed. A re-order might be issued. Shipping needs to take place. The income must be reported or the purchaser must be billed.

Without this processing, someone might try to fill an order of 750 units, unaware that the inventory is too low. Strategy could be created based on sales without that 500, which can affect how effective future campaigns could be. This is just one example of how effective operational business intelligence allows people within a company to make better decisions. A system that takes business transactions and processes them more quickly will allow employees to have better intelligence and will improve business processes overall.

Think back to how businesses ran before computers. Everything was handwritten or typed, communication was chiefly via telephone and transaction information might not be reflected in real numbers for days, or longer. Today, the key to good operational business intelligence is the type of software and BI processing system that's in place. A company that keeps track of all BI on paper can't compete into today's computerized world. Likewise, a company that has better intelligence processing has an edge over a company that doesn't efficiently manage its information.

When choosing the software package that a company will rely on for business intelligence, there are three basic points of comparison to examine:

1.    Speed and data accessibility. How quickly does it process and how easy is it to get the necessary information.

2.    Scalability. As the company grows, will the software grow with it or will it become confining?


3.    Good report distribution. If someone in the company needs to have a certain piece of information to make a fully informed decision, and a transaction occurs that will affect that decision, the information should automatically be sent to that user or group of users who most need the information. The ability to send reports and data through emails, smart phones and any on-the-go device can be crucial when time is tight.

Inline Process Analytics

Business information is typically information that's gathered over time, collated and carefully analyzed. This type of information is crucial to a business because it allows the people in charge to spot trends, long-term problems, areas that need improvement and other important factors. But analyzing operational business intelligence, also often called inline process analytics, is actually an on-the-fly method of spotting trends, problems and issues that need to be dealt with immediately.

Databases, figures and statistics that are updated more frequently, sometimes in real-time or very close to real-time, allow information to be analyzed immediately, particularly if the software is top quality. This can allow managers to spot potential problems soon after they develop, rather than days after a small problem might have escalated into a huge one.

One of the best ways to understand the importance of operational business intelligence is to compare it to the stock market. When you watch a stock ticker, you're getting real time operational business intelligence. That allows you to make buy and sell decisions based on what's happening now. Imagine the devastation if that information was only collated and shared once a week, or even just at the end of every day. That's the kind of devastation that good operational business intelligence practices can save companies who use it well.