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Next year marks the 15th anniversary of The Data Warehousing
Institute (TDWI), an association of data warehousing and business
intelligence (BI) professionals that has grown nearly as fast as the
industry it serves, which now tops $9 billion according to Forrester
Research.
In 1995, when data warehousing was just another emerging information
technology, most people—including some at TDWI—thought it was just
another tech fad that would fade away in a few short years like others
before it (e.g. artificial intelligence, computer-assisted software
engineering, object-relational databases.) But data warehousing’s light
never dimmed, and it has evolved rapidly to become an indispensable
management tool in well-run businesses. (See figure 1.)
 Figure 1. As data warehousing has morphed into business intelligence
and performance management, its purpose has evolved from historical
reporting to self-service analysis to actionable insights. At each step
along the way, its business value has increased.
In the beginning…
In the early days, data warehousing served a huge pent up need
within organizations for a single version of corporate truth for
strategic and tactical decision making and planning. It also provided a
much needed, dedicated repository for reporting and analysis that
wouldn’t interfere with core business systems, such as order entry and
fulfillment.
What few people understood then was that
data warehousing was the perfect, analytical complement to the
transaction systems that dominated the business landscape. While
transaction systems were great at “getting data in,” data warehouses
were great at “getting data out” and doing something productive with
it, like analyzing historical trends to optimize processes, monitoring
and managing performance, and predicting the future. Transaction
systems could not (and still can’t) do these vitally important tasks.
Phase Two: Business Intelligence
As it turns out, data warehousing was just the beginning. A data
warehouse is a repository of data that is structured to conform to the
way business users think and how they want to ask questions of data.
(“I’d like to see sales by product, region and month for the past three
years.”)
But without good tools to access,
manipulate, and analyze data, users can’t drive much value from the
data warehouse. So organizations began investing in easy-to-use
reporting and analysis tools that would empower business users to ask
questions of the data warehouse in business terms and get answers back
right away without having to ask the IT department to create a custom
report. Empowering business users to drive insight from data using
self-service reporting and analysis tools became known as “business
intelligence.”
Phase Three: Performance Management
Today, organizations value insights but they want results. Having an
“intelligent” business (via business intelligence) doesn’t do much good
if the insights don’t help it achieve its strategic objectives, such as
growing revenues or increasing profits. In other words, organizations
want to equip users with proactive information to optimize performance
and achieve goals.
Accordingly, business intelligence is now morphing into performance
management where organizations harness information to improve
manageability, accountability, and productivity. The vehicles of choice
here are dashboards and scorecards that graphically depict performance
versus plan for companies, divisions, departments, workgroups and even
individuals. In some cases, the graphical “key performance indicators”
are updated hourly so employees have the most timely and accurate
information with which to optimize the processes for which they are
responsible.
Organizations have discovered that publishing performance among peer
groups engenders friendly competition that turbocharges productivity.
But more powerfully, these tools empower individuals and groups to work
proactively to fix problems and exploit opportunities before it is too
late. In this way, performance management is actionable business
intelligence built on a single version of truth delivered by a data
warehousing environment.
The Future
As Timbuk3 once sung, “The future looks so bright I have to wear
shades.” The same could be said of business intelligence as it
increasingly becomes a powerful tool for business executives to
measure, monitor, and manage the health of their organizations and keep
them on track towards achieving strategic goals.
Wayne Eckerson is TDWI's Director of Research. TDWI (The Data Warehousing Institute™) provides education, training,
certification, news, and research for executives and information
technology (IT) professionals worldwide. Founded in 1995, TDWI is the
premier educational institute for business intelligence and data
warehousing.
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