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The Building Blocks of Business Intelligence: A Comprehensive Guide to BI Architecture

Daniel Thyrring31 Jul 23 • 14 min read

Blog > Manage

The Building Blocks of Business Intelligence A Comprehensive Guide to BI Architecture

Business intelligence (BI) has become an essential component of any modern business. The ability to collect, analyze and leverage data is now vital to gain a competitive advantage and make informed business decisions. Business intelligence provides organizations with greater insights into market trends, customer behavior, and operational efficiencies, that in turn enable companies to identify areas for improvement and capitalize on opportunities.

When it comes to implementing business intelligence, the infrastructure that a company adopts to support the process plays a critical role in the success of the overarching strategy. This is where BI architecture comes into play, which encompasses a series of components that work together to support the entire BI process.

From data collection, cleansing, structuring, storage, and analysis to reports and dashboard delivery and insight operationalization, each stage of the BI process requires a specific set of infrastructure components to operate effectively.

If your organization is looking to build a comprehensive BI architecture that supports business requirements, then read on to explore the different components that need to be put in place. Whether you’re just starting with BI or looking to optimize your existing strategy, understanding the building blocks of BI architecture is essential. Leveraging the right infrastructure components means businesses can ensure that their BI strategy is scalable, efficient, and effective.

So, join us as we explore the key components of BI architecture and how to build a successful BI strategy.

Data Warehousing Architecture

This is the foundation of any successful business intelligence strategy. Data warehousing involves collecting, integrating, and managing large volumes of data from disparate sources in order to support accurate and timely decision-making.

So, where do you start with data warehousing?

The first thing to consider is the data store – there are two main types: transactional and analytical. Transactional data stores are used to capture and store operational data, such as sales transactions, customer interactions, and financial transactions. On the other hand, analytical data stores are used to store historical data that has been transformed and optimized to support reporting and analysis purposes, such as inventory levels and sales performance.

The second component of data warehousing is data integration and management processes. Combined, these processes involve collecting, integrating, and managing data from various sources to create a unified view of the whole business. Data integration brings data from disparate sources together and transforms it into a consistent format. Whereas data management involves organizing and structuring data for easy storage, retrieval, and analysis.

Organizations need specific technologies to get a handle on data warehousing. For example, Extract, Transform, Load (ETL) tools, are used to extract data from various sources, transform it into a consistent format, and then load it into the data warehouse. Business intelligence tools can then be used to create reports, dashboards, and visualizations from the data that’s stored in the data warehouse. From there, data mining and predictive analytics tools are used to analyze data and identify patterns and trends that can be used to inform business decision-making.

Data warehousing architecture has been undergoing significant evolution in recent years. The introduction of innovative new technologies such as Big data and the Internet of Things (IoT) are just two trends making an impact. Traditional data warehousing systems can’t handle the management and analysis of extremely large data sets involved with big data. That’s why technologies such as Hadoop and NoSQL databases have emerged, they have been specifically designed to handle big data. The same goes for IoT – the volumes of data that connected IoT sensors and smart devices create is often huge. Using the right tools, this data can be integrated into the data warehousing architecture to provide insights into customer behavior, product usage, and operational efficiencies.

Data Analytics Architecture

Next on the list is data analytics. These are the tools, techniques, and processes used to analyze data and generate business insights.

For example, data visualization is a data analytics technique that’s used to represent data in a visual format, such as charts, graphs, and maps. This is an effective way to communicate complex information and patterns to other team members and stakeholders in a way that is easy to understand and simpler to consume. Data visualization tools also enable users to create interactive dashboards and reports that provide real-time insights into key business metrics. Organizations should consider popular and effective data visualization tools such as Tableau, Power BI, and QlikView.

Reporting is another important component of data analytics in relation to BI architecture. They allow users to create standardized reports that can be distributed to stakeholders across the organization, offering complete visibility. These reports can be customized to display specific metrics and scheduled to run on a regular basis so reports are always up-to-date and ready to inform business decisions. They also offer the ability to drill down into the granular layers of data to uncover insights and trends that may not be visible at a high level.

Performance management is another data analytics process, it’s used to monitor and optimize business performance. Key performance indicators (KPIs) are used to measure progress toward specific goals and objectives, which enables users to set targets, easily track progress, and quickly identify areas for improvement. Performance management tools can be integrated with data visualization and reporting tools to provide a more comprehensive view of overall business performance.

Some other analytical tools that businesses might use for BI architecture include data mining and predictive analytics tools. Data mining identifies patterns and trends in large data sets, while predictive analytics can forecast future trends and outcomes. Businesses use these tools to identify opportunities for growth, optimize operations, and improve decision-making efforts.

The Benefits of Business Intelligence Section

Data Governance and Security

As organizations continue to rely more heavily on data to drive decision-making and improve performance, it’s crucial to implement robust security measures and data privacy controls to protect sensitive data and ensure the accuracy and reliability of data insights. Let’s take a look at the key data governance and security practices used in BI architecture…

Data Privacy

This is a top concern for organizations, particularly in light of regulations such as GDPR and CCPA. In the world of BI architecture, organizations need to implement strong access controls, encryption, and anonymization techniques to ensure data privacy. This involves ensuring that only authorized users have access to sensitive data, using encryption to protect data in transit and at rest, and anonymizing data whenever possible to minimize the risk of data breaches.

Master Data Management and Data Quality Management

Master Data Management (MDM) is the creation and maintenance of a centralized repository of master data, which is used to ensure consistency and accuracy across different data sources. This helps organizations to avoid data duplication and reduce the risk of errors and inconsistencies.

Data Quality Management (DQM) is the implementation of processes and tools that ensure the accuracy, completeness, and consistency of data. This includes data profiling, data cleansing, and other data enrichment techniques. By ensuring the quality of data, organizations can inherently trust data, make more informed decisions and avoid costly errors and mistakes.

Alerting and Triggers

Alerting and triggers are used to notify users when certain events or conditions occur in the data, such as the detection of anomalies or outliers, changes in data patterns or trends, or the crossing of certain thresholds or limits. By implementing alerting and triggers, organizations can respond quickly to emerging issues or opportunities and take corrective action where necessary.

Continuous Monitoring

Real-time monitoring and alerting tools are used to detect and respond to security threats or data breaches. It also involves regular audits and assessments to ensure that security controls and data governance policies are being followed.

Data Access Controls

Ensuring that only authorized users have access to sensitive data is vital to prevent security breaches and adhere to data privacy regulations, So, implementing role-based access controls which restrict access to data based on the user’s job function and level of access is the core goal. It also involves implementing data access policies and procedures that should be followed to ensure that data is only accessed and used for legitimate business purposes.

Establish clear data quality standards

Business Intelligence Architecture

The hardware and software infrastructure used in BI architecture is an essential aspect of the overall system. It includes servers, storage systems, databases, and networking components that work together to collect, store, process, and analyze large volumes of data. 

Servers

BI servers are typically high-performance machines that are optimized for data processing and storage. They are designed to handle complex queries and large data sets, and they often run specialized software to support BI processes.

Storage Systems

There are several types of storage systems used in BI architecture, including disk-based storage, tape storage, and cloud-based storage. Disk-based storage is the most common type of storage used in BI, and it typically consists of high-capacity hard drives or solid-state drives.

Databases

Databases are the backbone of BI architecture, as they store and manage the data. There are several types of databases used in BI architecture, including relational databases, NoSQL databases, and columnar databases. Relational databases store structured data, NoSQL databases are used to store unstructured or semi-structured data, while columnar databases are used to store large volumes of data in a column-wise format.

Networking Components

These enable data to be transmitted between different systems and applications. There are several types of networking components here, including switches, routers, firewalls, and load balancers. These components are designed to ensure that data is transmitted securely and reliably between systems.

Software Infrastructure

The software infrastructure used in BI architecture includes the applications and tools used to collect, store, process, and analyze data. These include data integration tools, data modeling tools, ETL tools, and data analysis tools. They are designed to work together seamlessly to support the entire BI process, from data collection to analysis and reporting.

As you can see, there are a whole host of processes, tools, techniques, and technologies that organizations need to consider in order to build a comprehensive business intelligence strategy. 

However, none of these elements can work effectively and support business intelligence without the right underlying foundation. That foundation is data culture.

The Evolution of Business Intelligence (2)

The Data-Driven Organization

In today’s data-driven world, organizations must have a data culture to succeed. This is an organizational culture that places a high value on data and data-driven decision-making. This means that data is at the center of all business operations, and employees are empowered to use data to make better-informed decisions.

Benefits of a Data Culture

An effective data culture has numerous benefits, including improved decision-making, increased agility, and overall better business outcomes. By encouraging and supporting a data culture, organizations can make more informed decisions based on data-driven insights, rather than relying on intuition or guesswork. This leads to better outcomes as decisions are based on real-time data rather than outdated or inaccurate information.

Instilling a culture of data can increase agility, allowing organizations to respond quickly to changes in the market and customer requirements. Having access to real-time data and insights means employees can quickly identify trends or opportunities and adjust their strategy accordingly.

Examples of a Data Culture

There are several examples of companies that have successfully implemented a data culture. For example, Amazon is known for its data-driven approach to decision-making. The company collects vast amounts of data on customer behavior and uses this data to inform product development, marketing, and other business decisions.

Another example is Netflix, which uses data to drive its content recommendations and production decisions. The company collects data on user viewing habits and uses this data to develop personalized recommendations for each individual user.

Self-Service BI and Data Democratization

One of the key components of a data culture is self-service BI or data democratization. This means that more people within an organization have access to and can use data, which in turn helps to drive data-driven decision-making and improve the business.

Data democratization can be achieved through self-service BI tools that allow users to easily access and analyze data. This reduces the burden on IT teams, as business users can access and analyze data on their own, which also encourages greater accountability and instills data ownership.

There is a growing emphasis on data democratization within organizations as more and more companies realize the benefits of allowing more people to access and use data. This trend is being driven by the increasing volume of data being generated, as well as the need for faster decision-making in order to keep pace with ever-changing industry standards and customer expectations.

Organizations can improve the speed and quality of decision-making by democratizing data because more people are empowered to use data to inform their decisions. 

Data Preparation by Business Users

Another trend in data democratization is data prep by business users. This means that business users are responsible for preparing and cleaning data, rather than it being the sole responsibility of IT teams. Again, this reduces the burden on IT teams.

Data Discovery

Data discovery involves the exploration of data to identify trends, patterns, and insights that can inform decision-making. Data discovery tools allow users to visually explore data, making it easier to identify trends and patterns.

By having a data culture that includes self-service BI, data democratization, data prep by business users, and data discovery, organizations can drive data-driven decision-making and improve business outcomes. This requires a commitment to data and a willingness to invest in the tools and infrastructure necessary to support a data culture.

The Future of Business Intelligence

BI has undergone a significant transformation in recent years, in part, due to the advent of emerging technologies and the growing need for organizations to gain insights from their data. The future of BI architecture is shaped by several current trends and future directions that organizations need to consider to improve their BI capabilities.

AI and ML

One of the most significant trends is the use of Artificial Intelligence (AI) and Machine Learning (ML) techniques. AI and ML have become essential tools in the BI toolkit, enabling organizations to automate data processing, improve data accuracy, and make data-driven decisions quickly. Predictive analytics – a subfield of AI – is increasingly becoming a popular feature in BI architecture as it allows organizations to forecast future trends, identify potential risks, and make proactive decisions.

Data Warehouse Modernization

Another trend that is driving BI architecture’s future is the modernization of data warehouses. Data warehouse modernization is all about making the data pipeline more efficient and automated. By using tools like TimeXtender, Azure Synapse/Data Factory, and Snowflake, organizations can automate the data pipeline process, reducing the time and effort required to create and maintain their data pipelines. This allows organizations to focus more on data analysis and decision-making than on data pipeline management.

Data Democratization and Data Mesh

Data democratization aims to provide access to data and insights to all stakeholders in the organization, making it easier for everyone to use data for decision-making. Data democratization promotes a self-service BI approach, where business users can access data without relying on IT teams. Data mesh is a newer concept related to data democratization, where data is considered a product, and individual teams are responsible for creating, managing, and sharing data products.

Real-Time Analytics

Real-time data analytics helps organizations make decisions based on up-to-date information, enabling them to respond quickly and effectively to changing business conditions. This trend has been accelerated by the rise of Internet of Things (IoT) devices, which generate a massive amount of real-time data that can be used to improve decision-making.

The future of BI architecture is all about best practices and key considerations that organizations need to focus on. Businesses need to focus on data quality, as bad data can lead to inaccurate analysis and decision-making. They also need to consider data governance and security, ensuring that data is managed appropriately and that access to data is controlled. Another key consideration is the need to integrate different data sources, which can help organizations gain a more comprehensive view of their data and make better-informed decisions.

 

Conclusion 

There are several key elements that organizations need to consider when it comes to encouraging and supporting business intelligence. But as long as these elements are addressed and a data culture is created and adopted, businesses can start or improve their journey to true business intelligence.

If your business is looking for external support to get on the way to business intelligence, then contact exMon to discover how their portfolio of data solutions can help your business succeed.

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