Dynamic Warehousing and the Next Generation of Business Intelligence

This past week, IBM announced a comprehensive strategy to enable dynamic warehousing, a new generation of business intelligence capabilities that enable organizations to gain real-time insight and value from their business information.  So what exactly is dynamic warehousing?  And what is this next generation of business intelligence?

Well, dynamic warehousing is about making information AND analysis available as needed to address ALL of the different demands organizations have for business intelligence.  This includes the traditional needs for historical reporting and analysis, but also extends to generate increased business insights from all information across the enterprise, and enables that knowledge to be delivered in real-time when needed - often referred to as operational intelligence.  Dan Everett, at Ventana Research has been talking about this concept and some of the challenges organizations face in achieving this lofty goal for over a year.  Let' s break it down by looking at what companies started out doing with BI tools to better understand what this next generation of cabilities is about.

Initial efforts at generating business insight were focused on query and reporting to understand what happened.  Police agencies reported on crime statistics to learn about frequent criminal activities, insurance companies reported on fraud to determine how much money to write off, and retailers reported on store sales to find out which locations were underperforming.  The second wave focused on technologies such as online analytical processing (OLAP) and data mining for historical analysis to understand why things happened and recommend future action – strategic and tactical planning.  Police agencies began analyzing criminal activity to optimize deployment of personnel, insurance companies analyzed characteristics of fraud for better customer segmentation, and retailers analyzed customer purchases to improve merchandising and better manage inventory.

Dynamic Warehousing provides a new approach to companies who want the ability to rapidly analyze and act upon the hidden benefits of their business information.  This third generation approach is about making available and analyzing information on demand to optimize each transaction – in the call center, in the field, when helping customers, or when taking orders.  Dynamic Warehousing is helping the New York City Police Department (NYPD) identify related incidents upon receiving an emergency call and deliver a list of potential suspects in real-time to detectives before they arrive at the crime scene (see the video).  Likewise, insurance companies can identify potentially fraudulent claims prior to approval and payment, while retailers can rapidly leverage buying patterns and changes in consumer behavior to identify the most effective cross sell and up sell opportunities at the point of sale.

There are four key things required to enable dynamic warehousing:

1. Real-time access, in context - being able to access and work with aggregated, cleansed information in the context of the business process or activities being performed
2. Analytics, as part of the business process - going beyond just providing access to information and providing embedded analytics capabilities that can be leveraged as part of a real-time business process
3. Incorporating knowledge from unstructured information - leveraging all types of information, including the ability to extract additional insights buried in unstructured forms of content, such as free form text fields, documents, web pages, audio recordings, etc.
4. Extended capabilities, tightly integrated - providing a complete set of integrated capabilities that extend beyond the warehouse to enable use of information on demand.  This includes search and text analysis, information integration, business process management, enterprise data modeling, master data management and industry specific models to make these technologies more applicable to a particular business area.

These are the key tenets of dynamic warehousing.  And these are the things needed by organizations to further innovate their businesses and drive the next level of competitive differentiation.

Comments

[rob meldahl]

The application of dynamic data warehousing will eventually lead to the obsolescence of the quarterly reports as we discover that we can have financial performance data delivered to us on a real-time basis. Multidimensional analysis, the cornerstone of data warehousing is exactly how all fundamental financial data is actually recorded. Financial summaries are just sums of this data accross the dimensions of time and account assignment.

[Dan Linstedt]

Please see my posts on Dynamic Data Warehousing, I believe IBM has done a disservice to the terminology yet again. What IBM has defined is nothing more than a serious attempt at producing an ACTIVE data warehouse, which in all reality is a great component - it just needs to be separated from that which is truly Dynamic in nature.

Respectfully,
Dan Linstedt