BI vs. Transactional systems: Short-term vision vs. strategic vision.

Apr 28, 2023

 

Introduction.

While transactional systems, such as ERP, WMS and CRM systems, focus primarily on managing day-to-day transactions and automating business processes, a Business Intelligence (BI) system is strategic because it provides a broad, comprehensive and deep view of an organization’s data, enabling better-informed business decisions.

Normally companies generate reports for decision making, but the generation of these reports presents a large amount of manual and repetitive processes; these usually have delays and are prone to human error. They also end up overloading the teams. Much of this reporting ends up being done in Excel or perhaps with visualizations where it is difficult to interpret and identify trends and deviations. The result of all this is that, although reports do exist, they are largely outdated and based on partial, inaccurate and inconsistent information.

While transactional system reports offer a retrospective view, a BI system allows you to analyze large volumes of data and transform them into relevant and useful information and present the information in a clear and consistent way, to facilitate the detection of patterns and trends normally hidden in the data that can be used to make strategic decisions.

 

Systems not designed for the analysis of large volumes of data.

Transactional systems, such as ERP, POS, CRM, or WMS, to name a few, are not designed for the analysis of large volumes of data, but are designed to respond quickly and agilely to one-off transactions. In addition, its use for analytics can compromise the system’s ability to manage business transactions, creating major drawbacks.

At the same time, transactional system reports generally do not contain the entire history of the company: it is very common that there have been migrations, or debugging, of the system, and so it is common that transactional systems do not contain the entire history of the company.

More importantly, transactional systems do not ensure the quality of the information nor do they allow integration with data from other systems or other information sources (such as Excel spreadsheets, CSV, etc.). As a result, cross-referencing information between different sources ends up relying on manual (and therefore error-prone), repetitive and complex processes.

Finally, transactional systems are generally rigid and the generation of reports is usually limited and not simple, generating a dependence on scarce IT resources, delays and friction between the different areas of the company due to competing priorities in the use of scarce resources.

 

The transition from retrospective analytics to prescriptive analytics.

Although transactional systems provide basic reporting and analysis, they are generally not sufficient to fully understand enterprise data. Typical reports from these systems tend to be retrospective, providing a limited view of what has happened in the past. Thus, the reporting of transactional systems is only limited to operational reports that explain “what happened”. In general, these reports offer a retrospective view, through standard, limited and “single-area” reactive reports.

On the contrary, data analytics systems were designed precisely to solve all these drawbacks: they are designed to handle large volumes of data without impacting the performance of transactional systemsThey can contain all the required history in a single repository, regardless of system changes or data migrations. They are also designed to simplify the analysis and understanding of data, so they contain an intuitive and easy-to-understand data model for business users.

From descriptive analytics to prescriptive analytics

Through a comprehensive BI solution, a company can start on its way to having a prescriptive vision, allowing it to have knowledge that allows it to influence reality. In this way, companies can extract greater value from their data, using it to positively and proactively impact the results of their operations; using it proactively to improve profitability, rather than simply reactively reacting to events that have already occurred.

With a BI system, more comprehensive and customized reports can be generated, allowing users to explore data and gain a deeper understanding of patterns and trends. In addition, the data visualization and analysis tools in a BI system are more advanced than those in a transactional system, making it easier to identify important relationships and correlations in the data.

 

BI: improve your profitability through your data.

Typically a company’s data is fragmented, compartmentalized and in multiple sources or transactional systems. Most of an organization’s data is largely hidden and unreachable to the teams that need and depend on it for their daily work.

A BI solution, with an integrated data model, provides a An important additional advantage: it allows you to perform analyses from different sources in a single visualization or report. This exponentially increases the analyses one can extract from the data..

As an example, assuming a company manages its billing processes in an ERP (enterprise resource planning) and its inventory in a WMS (warehouse management system) it may have accurate data on its sales and inventory; but understanding in detail its inventory based on its demand (inventory measured in days sales) to make accurate forecasts of the inventory needed to satisfy it may be a simply impossible task.

As we have mentioned on other occasionsIn the U.S. market, it is estimated that companies lose between 5% and 10% of their sales due to poor inventory management; Deloitte estimates that 80% of retailers do not have a complete understanding of their inventory data and are unable to identify best and worst sellers. In this context, having a BI solution that integrates sales and stock information can have significant positive results, reducing the level of obsolete stock, increasing inventory turnover, and improving the customer shopping experience by ensuring an adequate level of inventory to ensure that the products ordered are available in the stores.

In short, to have a BI solution with an integrated data model opens up an enormous amount of analytics that were previously simply inaccessible or very difficult to generateThis way, teams can have at hand a tool that helps them in a concrete way in day-to-day decision making, while improving the company’s internal processes.

Conclusion

A BI system allows for more advanced analysis and more detailed exploration of data. It allows users to access and analyze data from multiple sources in order to answer more complex questions about the business, to move from a retrospective analysis to a prescriptive one that can positively impact reality.

While transactional systems are important for business process automation, a BI system is crucial for strategic decision making. Having a business intelligence system allows transforming data into useful information and obtaining the necessary answers to better serve customers, differentiate from the competition, and increase business profitability.

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What is bintelligenz?

Bintelligenz, the only business intelligence solution on the market that is:

✔ All-in-one: bintelligenz covers all processes of a comprehensive BI solution:

  • Data Scoping: understanding existing data and its origin
  • Data Integration: validate and transform your data into an integrated model of your organization’s processes.
  • DataWarehouse: enterprise cloud data warehouse with built-in security
  • Data Visualization: world-class visualization tool
  • Data Use: more than 150 pre-assembled dashboards with metrics and KPIs about your business.

✔ No-code: none of the processes require you to program a single line of code; you just need to know your current transactional systems.

✔ Economical: most economical BI solution on the market. Subscription scheme without the need for additional licenses, consultancies or additional technical staff.

✔ Fast implementation: in as little as 1 month.

✔ With guaranteed success: with our accompanied on-boarding process we guarantee that you will have a complete BI solution for your organization.

 

Learn more about bintelligenz at www.bintelligenz.com.

 

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