The Future of Business Process Management Where is BPM heading?

Businesses are looking for a new way of using business process management (BPM) solutions. As they become more dynamic, businesses are demanding faster responses from their business templates. As a result, companies such as CommerceQuest, HandySoft, TIBCO, and Metastorm, are developing BPM suites that are compatible with application, integration, and content suites.

Understanding BPM

Approximately ten to fifteen years ago, organizations began assimilating their legacy systems in specific industries or divisions by integrating enterprise applications via data transformation and routing, event triggering, process automation, and adapters. Enterprise resource planning (ERP), customer relationship management (CRM), and supply chain management (SCM) vendors were flourishing at this time. They automated their transaction systems with ERP software while including information systems from CRM software. Five years later, business process integration (BPI) solutions, namely business process modeling, business-to-business (B2B) connectivity, and vertical industry process templates were built on top of these enterprise application integration (EAI) systems.

Today, the market offers BPM solutions that incorporate both the EAI and BPI functionality in addition to workflow, business activity monitoring, Web services, rule engines, and portal capability, etc.
BPM is a set of tools and services that support human and application interaction with business processes. BPM suites automate manual processes by routing tasks through departments and applications. These routings are rule- and action-based, and are defined in a set of formulas. Actions can be automatically triggered, without an underlying rule requiring additional information; therefore, the process can be continuous and manual processes can be avoided.

Organizations use BPM systems to improve the effectiveness of their core operations. BPM specifically coordinates interactions between systems, business processes, and human interaction. It automates the routing of activities and tasks to employees, taking away non-value adding activities, such as routine decisions, data, and form transfer etc., and instead, provides users with tailored lists of task. With today's tight integration of process definitions and underlying applications, changes in the definition can be deployed and communicated virtually immediately.

Additionally, BPM can also add value to a company requiring procedures to be created and published because it offers compliance management. Companies can use it to meet the US Sarbanes Oxley Act (SOX) and International Standards Organization (ISO) requirements. It can opening up a range of functions such as process (quantitative) analysis, and optimization. Thus, by implementing BPM, companies are able to orchestrate and leverage cross-functional business processes that are used over multiple systems, divisions, people, and partners.

Ultimately, the beneficiary of BPM systems is actually the customer because the customer will receive information sooner and products faster. This results in an improved level of customer satisfaction and translates into more revenue for the company. For more information, see Business Process Management: How to Orchestrate Your Business.

When the DW model was conceived, it was believed that it was necessary to stage data in a warehouse to provide reasonable query performance for users.

3:32 PM 12/4/2009Vendors are retooling themselves to meeting the demand for accurate business intelligence (BI) solutions. Acquisitions and strategic partnerships appear to be the most popular way for vendors to jockey for the top position in this growing market. The following are the issues that customers should investigate if their enterprise applications vendor follows the strategy of partnering with a boutique vendor like Vanguard or Corporate Radar (see Boutique Vendors Can Bring Big Value?):

* If scattered data from enterprise resource planning (ERP), customer relationship management (CRM), supply chain management (SCM), spreadsheets, etc., must be included in the total BI solution, does the boutique vendor provide the tools and service skills required?

* Do you feel comfortable with the financial viability and geographic coverage of boutique vendors, which are smaller due to their tight market focus?

* As both the enterprise and BI products evolve, who is responsible for keeping the two in synch? And who is responsible for integration?

* Are you able to provide the internal hardware and software support required? Or will that have to be the vendors' lookout?

Part Seven of the Business Intelligence Status Report series.

On the other hand, customers considering an enterprise application vendor that follows an alliance strategy with a renowned horizontal BI vendor, like Cognos or Business Objects, should consider the following:

* BI vendors using strategic alliances tend to offer product suites that are broad and functional, but lack deep industry specific needs. Are your industry-specific needs provided by the solution? You should rigorously question industry specific issues and the responsibilities of the two vendors relative to the inevitable integration and future enhancements.

* The horizontal BI vendor may have a large customer base, but may have a limited number of customers in your specific industry. Does this make a difference to you?

* As both the enterprise and BI products evolve, who is responsible for keeping the two in synch? And who is responsible for the integration?

* A solution based upon a BI product from a horizontal provider may be an overkill in terms of unneeded functions, support requirements, and cost. How will the vendor approach your needs?

* The BI product will require internal support. Can you support the hardware and software required for a solution based upon a horizontal BI vendor?

Business Intelligence Vendors

The demand for accurate, timely information across disparate systems in an enterprise has been answered by vendors touting some or near total corporate performance management (CPM) capabilities. Yet, while there are plenty of vendors to choose from, there is no overall CPM market leader. Attempting to gain a competitive advantage in the crowded business intelligence (BI) and CPM market, some enterprise resource planning (ERP) vendors are resorting to prudent BI and enterprise process management (EPM) acquisitions.

Geac Goes the Acquisition Route

Geac Computers' 2003 acquisition of former financial analytics provider Comshare has resulted in Geac MPC. Geac MPC is a single, integrated CPM offering that supports dynamic planning and analysis for CFOs, and improves visibility throughout the organization with the aim of a single version of the truth, and no surprises. Although Hyperion and Cognos are the undisputed leaders in financial planning and budgeting, with Oracle (including the former PeopleSoft Enterprise Performance Management product) and SAP also having a sizeable market share, Geac, is still worth mentioning. While not a market leader per se, it is still notable because it has been reinventing itself within the realm of BI.

Part Five of the Business Intelligence Report Status Quo series.

Geac MPC is a centrally-maintained, Web-based application that provides the enterprise's strategy formulation, planning, budgeting, forecasting, financial consolidation, and reporting and analysis functionality that users need to run their business efficiently and effectively. It is a unified, comprehensive solution that enables management to set strategic goals and translate them into action plans, track results, and take corrective action as needed—all based on a continuous flow of near real-time performance data. In other words, with the solution, organizations should be able to model business plans to develop effective strategies, link these strategies to budgets for better resource allocation, automate global financial consolidation to see accurate results faster, generate statistically accurate budgets and plans, and report and analyze data in the most meaningful ways. All this should reduce the time spent performing manual tasks, and free managers to spend more time analyzing results, evaluating alternatives, and implementing business decisions.

Although integration should be one of the cornerstones of CPM offerings, unfortunately, solutions offered by most vendors are not often integrated. Instead, the solutions are made up of multiple diverse (acquired) applications and administration tools that focus on making interfaces, audits, and reconciliations more efficient. This requires companies to have separate IT and finance department support for each of these applications, with the result being that both the financial and IT staff spend most of their time trying to ensure that each system has the same data, and that the users are accessing the correct, most recent data. Needless to say, these types of solutions could be unnecessarily expensive, may require multiple implementations, and are difficult to administer and maintain, and as a result, they struggle to promote collaboration and do not maximize return on investment (ROI).

To remedy this problem, Geac MPC stores business information on a single platform, using a single business model. Data is contributed only once, which eliminates the need to re-key or link data, copy and distribute templates, and guess which version of the data is correct, as is often the case with error-prone spreadsheet-based management systems. Enterprises should benefit from data integrity, one version of the truth creating confidence in the produced numbers and figures, and a clearer line of sight into operational performance. Furthermore, business professionals, with proper user security, can access data immediately via a Web browser, MS Excel, and a personal digital assistant (PDA), which all should in turn lead to improved productivity. When modifications to structures, business rules, calculations, or the application are necessary, they need to only be made once and are automatically reflected throughout the application. Geac MPC can do this all by leveraging the data stored in existing underlying transactional systems which will allow everyone across the enterprise to work with the same version of accurate, up-to-date information.

In May, Geac launched a major new release, Geac MPC 7, which should offer Global 2000 companies multiple beneefits, including improved enterprise-wide planning and alignment, streamlined reporting, and simplified compliance. The product, which has already been delivered to early adopter customers, will be generally available worldwide this summer, and should further advance how enterprise-wide strategic and operational business planning is done. Rather than just periodically updating a scorecard with operational results, Geac MPC 7 will help organizations transform and communicate their strategic plans into quantifiable objectives, tactics, and supporting activities with assigned ownership at the correct responsibility level throughout the enterprise. Consequently, the result will be a collaborative environment for planning, tracking, and predicting progress toward key management objectives.

Access to Critical Business Intelligence: Challenging Data Warehouses?

For a long time, data warehousing used to be synonymous with business intelligence (BI), to the extent that there is a deep ingrained belief that BI cannot be conducted without a data warehouse (DW). Indeed, when companies are dealing with a deluge of data, it helps to have a DW, since it offers large corporations the ability to leverage information assets to support enterprise reporting and analysis. DWs also provide a technical solution to the problem of multiple systems, separate data stores, and rapidly expanding historical data, since information is extracted from various transaction-based systems, such as spreadsheet, enterprise resource planning ( ERP), supply chain management (SCM), or customer resource management (CRM) systems, and stored in a central repository where it is transformed, cleaned, and consolidated.

During the 1990s, this model grew to form the basis for an entire data warehousing industry, with supporting hardware, software, and consulting vendors (see The Necessity of Data Warehousing).

Many data warehousing proponents also believe that a transaction database cannot support the concurrent demands of both enterprise systems and BI applications, since the argument is that business users querying the database will decimate the performance of the entire transactional system. However, a less known detail might be that the major database vendors have meanwhile created relational database management systems (RDBMS) that are entirely capable of supporting both functions, but most of the enterprise applications and BI vendors continue to use only a small fraction of the total functionality available in the source database management systems (DBMS). Namely, their product developers tend to focus rather on cross-platform design, causing them to leverage only the limited amount of functionality that the major databases have in common.

Conversely, rather than duplicating these tools, Vanguard tries to optimally leverage them as part of the overall solution by introducing Direct Access, the technological enterprise information integration (EII)-like foundation of its Graphical Performance Series (GPS) BI solution. This solution delivers integrated enterprise information directly to business decision-makers without relying on a DW, thereby potentially saving time, increasing business agility, and reducing costs. The Vanguard GPS solution has since been able to directly access the information stored in enterprise systems, without requiring businesses to move or stage data, or invest in complex and unwieldy data warehousing technology.

Businesses are collecting an ever-expanding amount of data in multiple systems, formats, and locations, making it increasingly difficult to maintain and synchronize a redundant copy of the original data in a central repository. As the complexity of this process increases, the administrative costs go up, and the business value decreases. At the same time, the highly competitive nature of the relational database market drives continuous improvements in the functionality of the source databases.

As the processing power and functionality of the databases improve, the most logical approach might then be to size the database server to manage both the transactional and reporting workloads. Vanguard believes that it is essential to leverage effectively all of the available database capabilities, so that the GPS solution includes native data access for each database and takes full advantage of the distinct features of each. The vendor's experience has reportedly shown that properly sizing the database server to support transactional and reporting functions can be far less expensive, while adequately effective, than building and maintaining a redundant DW. Further, the IT management costs of tuning the transaction database are likely less than the cost of the ongoing maintenance required by a DW, which becomes a mission on its own, to a degree that the enterprises even forgot the original purpose of the DW.
When the DW model was conceived, it was believed that it was necessary to stage data in a warehouse to provide reasonable query performance for users. However, this is a case where query performance can be drastically improved simply by taking advantage of the features in the source databases, since Oracle, IBM, and Microsoft now offer declarative summarization capabilities that automate the process of creating and maintaining summary tables. Called materialized views, materialized query tables, or indexed views, these database features, combined with Vanguard's "summary-aware" metadata feature, can enable users to specify and deploy declarative summarization.

Vanguard makes use of this capability to limit the processing impact of user queries and maximize the performance of the solution. By incorporating declarative summarization directly into their database engines, the major database vendors might have removed, in some instances, a primary justification for data warehousing. The database heavyweights Oracle, IBM, and Microsoft are also devising ways to leverage XML and enable multi-format integration with data other than their own.

In fact, Oracle's BI solution, although featuring data warehousing and extract/transport/load (ETL) capabilities, often tends to avoid unnecessary data consolidation, given that historically, companies would dump all the information into a DW. They believed that if they put all of their data into a single database/DW they could actually eliminate the problem of functional silos and everybody would share information and be working off the same playbook.

Yet, the actual findings are too often that when a company builds a DW, the focus becomes one of getting the data from the source systems into the warehouse, whereas users are still left to their own devices to develop reports or write queries, which is a time consuming process. Thus, the right way to do it might be to keep management reporting in the same system with the transactions themselves, so that they bring along with them all the context of why the transaction happened. That approach enables users to drill into the information and explore the metrics/key performance indicators (KPI) all the way down to the very transaction that may have caused the problem. Additionally, by leaving everything in the same system or in the source instance where the transaction occurred, the users can actually drill through a transaction and fix the error on the spot if something is wrong.

Furthermore, as the Sarbanes-Oxley (SOX) and other reporting requirements hold businesses to higher standards of accuracy and accountability, business transparency is vital, but a DW, by definition, is a copy of the original data records. DWs are constantly being shifted, updated, or consolidated, and they combine data from multiple systems, each with different business rules. On the contrary, Vanguard's Direct Access pulls information directly from the transaction systems—the real systems of record—so that the question of what "version" of the data is reported becomes obsolete.

The issue is also whether there is a point of integrating a large amount of data in a DW when one only needs a small sliver of it. Given that the nature of corporate information is dynamic, trying to keep it replicated and synched in multiple databases when, for example, merged with another entity, is impractical, especially if data is accessed infrequently. Changes to a traditional DW model to bring in new data can take months, whereas EII-like data federating solutions are not as fragile as the procedural ETL scripts and can accommodate the necessary changes much more quickly.

Attaining Real Time, On-demand Information Data: Contemporary Business Intelligence Tools

Some pure play business intelligence (BI) vendors have long been providing BI platforms, which offer complete sets of tools for the creation, deployment, support, and maintenance of BI applications. Pure-play vendors attempt to sell these platforms to original equipment manufacturers (OEM) and independent software vendors (ISV), and even to IT organizations and end users that are information technology (IT) savvy enough to build their own applications on top of it. These BI platforms logically combine many database access capabilities like structured query language (SQL), online analytical processing (OLAP) data manipulation, modeling functions (what-if analysis), statistical analysis, and graphical presentations of results (charting) to create data-rich applications. The applications have customized user interfaces (UI), and are organized around specific business problems that target business analyses and models.

Part Three of the Business Intelligence Status Report series.

Most BI platform vendors also offer their own BI applications as the BI platform's validation. These enterprise BI application suites are the descendants of basic query-and-reporting tools, which they tend to displace or extend. The suites provide support for varying levels of users, with a variety of query, reporting and OLAP capabilities, all available with the idea of minimal training.

The BI market is currently crowded with a number of vendors with adept product suites. Some players in the market include MicroStrategy, Informatica, Information Builders, Oracle, IBM, SAP, Microsoft, Teradata, and Ascential, which was reunited with its short-term foster parent Informix, when Ascential was acquired by IBM, and See IBM Buys What's Left of Informix). Other vendors include Applix, arcplan, ProClarity, Siebel Systems, OutlookSoft, CombineNet, and SPSS. Obviously, these vendors have different origins. Some are traditional database vendors and enterprise application vendors; others were BI suite vendors, pure players in certain niches (such as enterprise reporting), while some have evolved to cover multiple bases.

Lately most of these vendors have updated their client/server tools with a Web-based UIs. Many BI software providers create standards-based portlets, sometimes using Web services, to expose BI functionality and information when more than viewing is required, and to be consistent with other portal add-ins. The advantage of portlets over simple hyperlinks (which have initially been leveraged) is a richer, more interactive experience and a more uniform integration approach. Otherwise, a portlet is a Web-based component that will process requests and generate dynamic content. The end user essentially sees a portlet as being a specialized content area within a Web page that occupies a small window in the portal page. The portlet provides users with the capability to customize content, with the appearance and position of a portlet.

Incidentally, current portlet standardization might help Web enablement and portal environment integration efforts, as most BI vendors are currently and cautiously developing products that will adhere to JSR 168, a standard that enables portlet interoperability. Since a JSR 168-compliant portal should be compatible with all Java-based portal solutions, it should alleviate the development burden on BI vendors. As a result, vendors can then focus on more advanced BI functionality rather than on porting their solutions to the individual, commercially available enterprise portal products. Thus, because of a strong Web similarity associated with BI application suites, some vendors describe their offerings as BI portals, whereby these portal offerings typically provide a subset of the counterpart client/server functionality via a Web browser. However, the vendors have been steadily increasing this functionality to come closer to that provided by rich, Microsoft Windows-like client desktop tools.
There are those who always want more due to the many pressures that demand the need and investment in data management and integration. The trend of massive growth in data volumes continues with no end in sight, while enterprises have to manage and share large amounts of data across diverse regions and lines of businesses (LOB). The introduction of new data generating technologies, such as radio-frequency identification (RFID), will only accelerate this growth and the subsequent need for real time BI. Traditional BI systems use a large volume of static data that has been extracted, cleansed, and loaded into a data warehouse (DW) to produce reports and analyses. However, the need is not just reporting, since users need business monitoring, analysis, and an understanding of why things are happening.

The demand for instant, on-demand access to dispersed information has grown as the need to close the gap between the operational data and strategic objectives has become more pressing. As a result, a category of products called real-time BI applications have emerged. These can provide users, who need to know (virtually in real-time) about changes in data or the availability of relevant reports, alerts, and notifications regarding events and emerging trends in Web, e-mail, or instant messaging (IM) applications. In addition, business applications can be programmed to act on what these real-time BI systems discover. For example, a supply chain management (SCM) or enterprise resource planning (ERP) application might automatically place an order for more "widgets", for example, when real time inventory falls below a certain threshold, or when a customer relationship management (CRM) application automatically triggers a customer service representative and credit control clerk to check a customer who has placed an on-line order larger than $10,000.

The first approach to real time BI uses the DW model of traditional BI systems. In this case, products from innovative BI platform providers like Ascential or Informatica provide a service-oriented, near real time solution that populates and the DW much faster than the typical nightly extract/transfer/load (ETL) batch update does. The second, commonly called business activity monitoring (BAM) is adopted by pure play BAM and or hybrid BAM-middleware providers such as Savvion, Iteration Software, Vitria, webMethods, Quantive, Tibco (particularly after the acquisitions of Staffware and Praja) or Vineyard Software. It bypasses the DW entirely and uses Web services or other monitoring means to discover key business events. These software monitors or agents can be placed on a separate server in the network or on the transactional application databases themselves, and they can use event- and process-based approaches to proactively and intelligently measure and monitor operational processes.

For more on these diagnostic BI tools, see Business Activity Monitoring—Watching the Store for You. The most advanced of these applications not only optimize users' time and the information they receive, but also provide the context for them to take appropriate action.

Business Intelligence Corporate Performance Management Market Landscape

The vendor landscape remains diverse, with every vendor touting some or near total corporate performance management (CPM) capabilities. The abundance of astute vendors will prevent any single vendor from achieving leadership any time soon, while growth for all will be, in part, hampered by increasing pricing pressures. Thus, the "arms race" to marshal the most complete CPM platform has been intensified among major vendors, and many have a comprehensive set of business intelligence (BI) functionality, including online analytical processing (OLAP) analytics, ad hoc query, end user reporting, enterprise reporting, planning, and some type of analytic dashboards or balanced scorecards.

Part Five of the Business Intelligence Report Status Quo series. Parts One to Three were published June 27�June 29

While 2003 saw a major onslaught of mergers and acquisitions (M&A) in the market involving large BI vendors like Cognos, Business Objects, SAS, Actuate, and Hyperion (see Has the BI Market Consolidation Been Crystal-Clearly Actuated?), 2004 and 2005 have also had their smaller share of M&A, with IBM acquiring AlphaBlox and Ascential, and Cognos acquiring Frango and Optima Analytic Solutions.

The pressure for these pure-play BI players also comes from large enterprise applications vendors like SAP, Microsoft, Oracle, or Siebel and their resources and business motivation to invest in their own BI solutions. This includes the underlying technology and the analytical applications, with their install base as the primary target.
or example, SAP is changing the positioning of its business information warehouse, SAP BW, to become a part of SAP NetWeaver, a platform aimed at delivering infrastructural functionality like collaboration, portal, business process management (BPM), application integration, and BI across the entire enterprise applications landscape. (For more details, see SAP Bolsters NetWeaver's MDM Capabilities). It opted for this route instead of delivering a packaged standalone data warehouse (DW), as was initially marketed after its launch in 1998.

Building on the successes of SAP NetWeaver BI, and the Strategic Enterprise Management (SEM) suite, SAP, during its European SAPPHIRE '05 user conference, unveiled more than 100 industry-specific analytic applications built on the SAP NetWeaver platform. These applications should empower users with new ways to drive core processes and business decisions based on actionable business insight. Accordingly, SAP Analytics are a new breed of model-driven, composite applications across more than twenty-five industries. SAP Analytics aim at merging data from SAP and non-SAP applications with BI queries, to eliminate disparate islands of data. They will also combine transactional, analytic, and collaborative steps across multiple business functions, departments, and even organizational boundaries.

Unlike traditional after-the-fact reporting tools, SAP Analytics applications will aim at pulling all relevant information—whether historical or current—from across a wide variety of enterprise systems to deliver clear and broad business insight that should help users drive current processes and take the wisest possible steps. These will reportedly deliver data in the business context of the specific process—letting a business manager know, for example, not only the day's sales figures but also whether these figures are on target compared against past performance and the current year's revenue goals.

Reportedly, each SAP Analytics application will be designed to easily be combined and extended with other analytics applications, and will play a specific role across areas such as SCM, CRM, and product lifecycle management (PLM). Some examples include

* SAP Analytics for retail will help store managers better understand and predict the performance of core activities, such as trade-promotions, in order to make adjustments to processes and strategies while there is time to impact outcomes.

* SAP Analytics for credit management will allow financial service companies to display customers' credit information, buying behavior, past purchases, and credit lines in the historical context of data stored in SAP and non-SAP systems or syndicated data sources such as Dun & Bradstreet. From inside the same application, users can then increase or stop access to credit lines for a given customer or partner and even block or authorize individual purchases.

* SAP Analytics for tax management will complement the SAP for Public Sector solution. It will allow organizations to better monitor and understand the tax basis, where contributions are coming from in the context of historical tax collection, and take steps to reclaim amounts due using the same application.

* SAP Analytics for high-tech manufacturing will allow managers and other employees at production plants and warehouses to gain an insight into order status, plant utilization, order backlog and restock levels. Some SAP partners have consequently built SAP Analytics applications that unify manufacturing execution system (MES) data with order supply chain and production data from SAP systems in order to provide highly granular views down to individual machines' uptime status and throughput capacity.

* SAP Analytics for CRM will continue to complement the mySAP CRM solution by providing visualization across marketing, lead generation, pipeline visibility, sales effectiveness, and individual customer views. By unifying sales data with financial data, fulfillment data, and manufacturing inventory data, SAP Analytics for CRM will empower sales executives and corporate offices with a complete view of customer buying patterns and profitability allowing them to detect hidden opportunities for future business growth.

SAP touts that its model-driven, code-free, and services-enabled design environment, SAP Analytics, will allow business users and analysts to easily deploy, configure, and combine analytic applications to customize SAP Analytics to support evolving business requirements. Further, SAP Analytics leverage SAP NetWeaver Visual Composer, Macromedia Flex, and multiple platform capabilities including BI and enterprise portal, which should provide industry savvy system integrators (SI) with the applications and tools to support their clients' evolving business needs. Independent software vendors (ISV) and syndicated content providers will also likely benefit from these new applications and tools. They will be able to better help mutual customers, as both partners and ISVs will be able to build new analytic applications by becoming certified in the Powered by SAP NetWeaver program. SAP Analytics will be available toward the end of 2005 and sold as add-on products. One should note, however, that SAP currently has analytics that are sold with SAP BW, whereas SAP's new move mainly adds additional industry-specific analytics. In any case, both old and new capabilities still also require the implementation of SAP BW to get the analytics.

Business Intelligence Status Report

Economic and regulatory pressures have made a broad set of technologies called business intelligence (BI), more important than ever for all enterprise application users. Users rarely feel satisfied with the amount of information they can extract, if they can extract any at all, from their enterprise applications. Enterprise resource planning (ERP) and BI (sometimes called analytics, which is specialized analytical software) are inseparable concepts, but they have taken different trajectories and evolved differently.

ERP systems have positively transformed many enterprises' business processes, yet many users feel oversold because ERP appears to inhibit access and lock up vital information. I In most traditional ERP systems operational activities are grouped together to form artificially created processes, which bear little resemblance to the actual business activities. For example, the focus of ERP has often been to get the correct figures into the general ledger (GL) and create a transactional glut (for more information on the genesis of enterprise applications, see Enterprise Applications—The Genesis and Future, Revisited.).

Conversely, BI, which has for few decades been called executive information systems (EIS), offers a new breed of similar, but more insightful and functional tools to help enterprises operate more efficiently and profitably. Many manufacturing and distribution enterprises of all sizes are amenable to leveraging software that would not only sense the daily pulse of the operations, but would also spot incongruities, analyze the performances of multiple areas, and initiate corrective adjustments. BI tools promise to help "rank and file" employees harness data too complicated for manual manipulation. For instance, few departments are as hard pressed for new tools as purchasing and sourcing, where rapid increases in materials costs, greater deviations in lead times, and supplier base growth and instability require ever increasing buyer dexterity. BI can provide this dexterity.
Enterprise software systems are designed as transaction processing tools and, nowadays the main job is to optimize an informed decision-making process for users at all levels of the organizational hierarchy. Recent trends seem indicate that access to key operational data is no longer under the purview of executives alone. Many manufacturing executives today are allowing (if not pushing and encouraging) access to operational performance data to the shop floor and in distribution centers to enable better and more timely decision-making by operators.

Most operational data in ERP systems—and in its younger siblings like supply chain management (SCM) or customer relationship management (CRM) is stored in what is referred to as an online transaction processing (OLTP) system, which is a type of computer processing where the computer responds immediately to user requests. Each request is considered to be a transaction, which is a computerized record of a discrete event, such as the receipt of inventory or a customer order. In other words, a transaction requires a set of two or more database updates that must be completed in an all-or-nothing fashion. The opposite of transaction processing is batch processing, in which a batch of requests is stored and then executed all at one time. In other words, transaction processing requires interaction with a user, whereas batch processing can take place without a user being present. Still, both approaches result with an immense number of records in the database.

To further refresh our memory, a database is a collection of structured data that is application-independent. This data processing file-management approach was designed to establish the independence of computer programs from data files, whereby redundancy is minimized, and data elements can be added to, changed, or deleted from the file structure without changing existing application programs.

Relational database are most commonly used in enterprise applications nowadays. A relational database is a software program that allows users to obtain information drawn from two or more databases that are made up of arrays of two-dimensional data (tables). Contrary to this, a hierarchical database is a method of constructing a database that requires that related record types be linked in tree-like structures. In this instance, no child record can have more than one physical parent record.

Relational databases are more powerful than the others because they require few assumptions about how data is related or how it will be extracted from the database. As a result, the same database can be viewed in many different ways. Another important feature is that a single database can be spread across several tables, which differs from, for example,, flat-file databases, where each database is self-contained in a single table. Accordingly, relational databases are prevalently deployed within enterprise applications.

Bundled with this are database management systems (DBMS) that access data stored in a database and present multiple data views to end users and application programmers. They are a collection of software programs designed for organizing data and providing the mechanism for storing; maintaining or modifying; and retrieving or extracting data on the database. A DBMS separates data from the application programs and people who use the data, and permits many different views of the data.

From a technical standpoint, DBMSs can differ widely, since terms such as relational, network, flat, and hierarchical all refer to the way a DBMS organizes information internally, which can affect how quickly and flexibly users can extract information. For example, a relational databasee management system (RDBMS) is a type of DBMS that stores data in the form of related tables, whose architecture is based on a formal method of constructing a database in rows and columns using rules that have formal mathematical proofs. In these systems, which originated in the work of EF Codd, relationships between files are created by comparing data, such as account numbers and names. In addition, an RDBMS has the flexibility to take any two or more files and generate a new file from the records that meet the matching criteria.