The collection and analysis of data in order to improve the way a business runs isn’t a new concept, but it’s one that has been renewed through a variety of technological advancements. New software packages and computer processors have made it possible for people to use data more effectively and without the need for high-priced analysts.
While this has made the use of data more accessible, it also raises many questions for those just starting to learn the ins and outs of the process. Perhaps the biggest question for newcomers to this methodology is about the difference between data warehousing and Business Intelligence. After all, isn’t the collection of data pretty much the same thing as business intelligence?
The short answer is — kind of. And that’s what makes it such a common issue because the truth is, there’s a lot of overlap between the two. But there is a simple way to understand the difference and that’s by following data from collection to implementation.
Data can come from any number of sources — accounting programs, sales figures, customer returns, online surveys and about a million other sources. All of this data is fed into a data warehouse system that stores, catalogs and maintains the raw data. That’s where business intelligence systems pick things up. The data warehouse feeds information into the BI system which then formats and combines different data sets in order to give people information they can then act upon. This can come in the form of sales forecasting tools, inventory management reports and a variety of other formats that can guide business decisions.
Simply put, business intelligence is what data warehouses aim to produce. The two work closely together and while there is overlap, they are, in fact, independent information systems. That’s why integration is key anytime you’re looking to add a piece of software to your overall business suite. Programs designed to work and communicate across platforms will be the best foundation for building a data warehouse you can actually use.