Business Intelligence has a fairly wide scope but at the fundamental level it is all about “Business Processes”. Let me explain a bit here.
BI, without the bells and whistles, is about understanding an organization’s business model, its business processes and ultimately find the reason (analytics) and way to optimize the processes. The actions are carried out based on informed judgments (aided by BI), to make the organization better in whatever endeavor it has set itself to accomplish.

Assuming that BI practitioners are convinced that understanding business process is critical to their work, let me delve a bit into the basics of it.

1) What is a business process? (As a side note, one of the best explanation for business models is given by Joan Magretta in her book ‘What Management Is”)

Business processes are set of activities involved within or outside an organization that work together to produce a business outcome for a customer or to an organization. The fact is that for an organization to function, there are many outcomes that are required to happen on a daily basis.

2) What are BPM Tools?

Business Process Management (BPM) tools are used to create an application that is helpful in designing business process models, process flow models, data flow models, rules and also helpful in simulating, optimizing, monitoring and maintaining various processes that occur within an organization.

3) The Mechanics of Business Modeling

Business Process Modeling is the first step, followed by Process Flow Modeling and Data Flow diagrams. All these 3 diagrams and associated documentation will help in getting the complete picture of an organization’s business processes. Brief explanation of these 3 types are given below:

a) In Business Process Modeling, an organization’s functions are represented by using boxes and arrows. Boxes represent activities and arrows represent information associated with that activity. Input, Output, Control and Mechanism are the 4 types of arrows. A box and arrows combination that describes one activity is called a context diagram and obviously there would be many context diagrams to explain all the activities within the enterprise.

b) Process Flow Modeling is a model that is a collection of several activities of the business. IDEF3 is the process description capture method and this workflow model explains the activity dependencies, timing, branching and merging of process flows, choice, looping and parallelism in much greater detail.

c) Data Flow Diagrams (DFD) are used to capture the flow of data between various business processes. DFD’s describe data sources, destinations, flows, data storage and transformations. DFDs contains five basic constructs namely: activities (processes), data flows, data stores, external references and physical resources.

Just like the data modeler goes thro’ conceptual, logical and physical modeling steps, a business process modeler creates the Business Process Models, Process Flow Models and Data Flow Diagrams to get a feel for the business processes that take place within an enterprise.

Thoughts for BI Practitioners:

  1. Consider viewing BI from the point of optimizing business processes
  2. Might be worthwhile to learn about Business Process Modeling, Process Flow Modeling and Data Flow Diagrams
  3. Understand the working of BPM tools and its usage in the enterprise BI landscape
  4. Beware of the acronym BPM. BPM is Business Process Management but can also be peddled as Business Performance Management.
  5. My view is that Performance Management is at a higher level, in the sense, that it is a collective (synergistic) view of the performance of individual business processes. A strong performance management framework can help you drill-down to specific business processes that can be optimized to increase performance.

Thanks for reading. Please do share your thoughts.

Posted by Karthikeyan Sankaran
Comments (1)
January 25th, 2009

Comments (1)

Jeff Lewis - May 5th, 2009

With your persmission, I would like to post this on my website. It absolutely captures the essence of the message I'm trying to communicate. Having served as a decision-support analyst for the early portion of my career, the latter has dealt largely with impediments to realizing reporting/analytics that are accurate, relevant, and timely. My new endeavor, 1st Discovery, LLC, will utilize lean office methodologies to address defective processes and identify deficiencies that lead to data gaps...which lead to BI impediments...etc. If you will allow me to post this short article, please email me at jlewis@1st-discovery.com with your approval. Thanks You.

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