Converting Data into Information
To make better decisions by analysis, Organization executives and managers need relevant and useful facts at their fingertips. But there is usually a huge gap between kind of information needed by corporate executives as well as low level employees and the information available due to day to day transactions. We call this the analysis gap.
To bridge this analysis gap, organizations make significant investments in the development of Business Intelligence (BI) systems to convert raw data into useful information which can be applied to some purpose and adds value or some meaning for the recipient. For example a set of raw sales figures is data. For the Sales Manager tasked with solving a problem of poor sales in one region, or deciding the future focus of a sales drive, the raw data needs to be processed into a sales report. It is the sales report that provides information.
Data by itself is useless, especially for improved decision making. Companies that don’t realize this try to improve their odds of success by acquiring yet more data. Instead, they should realize that data, like iron ore, is merely a raw material. Smart companies use business intelligence to process their data so that it turns into information and, ultimately, into knowledge.
With information, the true destination in the pursuit of data is achieved i.e. knowledge. When the enterprise turns its data into information with BI, it has tools with which to pursue and gain competitive advantage, and even build entirely new business models.
The most effective BI systems access huge volumes of data (measured in gigabytes and even terabytes) and deliver relevant subsets instantly to decision makers in a form to which these people can easily relate. Some call this ”analysis at the speed of thought”—being able to get an answer to a question almost as quickly as the question is formulated. This makes possible a quantum leap in the quality of analysis that can be performed, which leads to a much better understanding of the business.
To be transformed into useful information, data must be relevant to the specific purpose, complete, accurate, timely and in the right format.
While technology is a significant part of this process, often the hardest aspect of business intelligence is being able to define what information is useful and relevant to a decision. BI solutions at the enterprise level are charged with collecting and reporting a company’s most important metrics, sometimes called key performance indicators (KPIs). KPIs guide businesses in making decisions that affect particular business units as well as the company at large.
To conclude, data converted meaningfully into good information, has the power to improve strategic decisions in the right directions. BI helps transform corporate data into valuable business information and thereby improve corporate decision-making.
Posted on October 3rd, 2011 by Sanjay Mehta
Filed under: Business Intelligence
Business Analytics software enables organizations to convert raw data into accurate information and further use it for improved decision making.
If a business intelligence can not facilitate independent decision making, there is something inherently wrong with the BI strategy. Recent studies point at glaring shortage of BI analysts in near future http://goo.gl/KzaN4 shortage-of-bi-analysts/. If we don’t assure or rather equip the frontline decision maker with the confidence to take informative decisions, rationalizing BI investments would get a sticky wicket situation. How can we empower the end-user? In my opinion the answer lies in adopting cloud-BI, but it has to be brilliantly simple in order to deliver value.