RTBI Defined

Business intelligence (BI) is viewed as a single view of operational events as captured through historical organizational data, which have been collated from the firm’s disparate data sources, transformed and availed to intended recipients (Gravic, Inc., 2010), through analytical and reporting tools. Such data mainly arm an organization with only a strategic tool for planning (Lehman, Watson, Wixom and Hoffer, n.d and Gravic, Inc., 2010). Organizations are enabled to determine issues pertinent to IT alignment to strategy and future planning, which is inevitable towards enhancing performance and maximizing profits (Oh and Pinsonneault, 2007). This has been the rationale behind the adoption of BI applications by modern organizations. BI is promising the much needed analysis of data harboured by the organization, and sometimes sitting in silo-like systems that hardly communicate to one another eventhough they serve the same master - the organization. The product of this data analysis is facts which reflect the status quo of business operations. Business leaders thus base their decision making on such facts, which pose as a ‘single version of operational truth’ (Gravic, incl., 2010). Trends that are delineated by historical data help these leaders check the likely future business complexion, and possibly leverage on this information to gear the business better handle what’s coming ahead.

However, due to the constant flux of doing business in the contemporary world, coupled with unfettered boundaries made possible by globalization, there seems to be a strong need for tactical decision making by businesses (Lehman et al. 2010 and Gravic, Inc., 2010). Although these authors are not writing-off the benefits that are inherent within traditional BI, but emphasize that the solution offered by these applications are not sufficient to cater for all the instant decision making needed for optimal performance. Gravic incl. (2010) further gives an example of a fraudulent-appearing ATM transaction, which instigates a faster action to be taken by a banking institution. Since our traditional BI processes stale data, that is, data dating back many hours, weeks, even months. Such data no matter how accurately processed may not give a timely alert to the bank handling a fraudulent transaction to timely stem this (and similar unruly behaviours) just when the need arises. Instead of relying on historical (or stale) data, RTBI offers an organization the capability to act as and when threatening or favourable events emerge. It thus shortens the latency that dominates extant BI applications. The consequence is reduced reaction times to the various and capricious business events. Again, since this capability is only essential to correct situations or seize emerging opportunities, it is referred to as tactical support. However, RTBI is also a strategic tool as much as it is a tactical tool in that historical data still form a basis for analysis. It depends on the user role of the decision maker which data (in terms of time) is much relevant for their decision support needs (Lehman et al.2010).

In addition, an RTBI should not be seen as a substitute for management information systems (MIS), which processes predefined reports and presents them for analysis to responsible individuals. Like RTBI, such reporting enables business managers to take tactical action as prompted by the business environment. However, this enables only selected sections of business to do so, that is, departmental (or divisional) managers are enabled to make tactical decisions for the individual units they are in charge of. An RTBI could indicate a problem associated with a specific business process as MIS would, but also offer the benefit of contrasting business process execution spanning time and space. For example, an MIS might provide a report that indicates success in business execution for one among a litany of business processes (belonging to a firm), meanwhile an RTBI over and above the latter could aggregate performance of the entire business processes.

In sum, what the various MIS adopted by a business could report on today about business execution, is reported tomorrow (or after some measured latency) by traditional BI, and as happening by RTBI. Note that ‘could report’ is italicized meaning: it is very unlikely that the different MIS of a business enterprise report on an event by themselves. It will take human intervention to collate information from these systems and report something meaningful to business. RTBI is however endowed with the collate, analyze and report capabilities which supplement human intervention for speedy response to be achieved (Watson, Wixom, Hoffer, Lehman and Reynolds, 2000). It unlocks an instant event indication feature, allows MIS capability and provides a strategic platform for future planning (Lehman et al. 2010; Gravic incl., 2010; Watson et al. 2010).

References:

1. Lehman, A. R., Watson, H.J. Wixom, B.H. Hoffer, J.A. (n.d). Continental Air-lines fly high with real-time business intelligence. Available from: http://www.fuqua-europe.duke.edu/centers/ccrm/datasets/continental/Continental_Airlines_Case_Study.pdf (Accessed 22 May 2010).
2. Oh, P. and Pinsonneault, A. (2007). On the assessment of strategic value of information technologies: conceptual and analytical approaches. MIS Quarterly 31(2):239:265.
3. Gravic, Inc. (24 May 2010). The evolution of real-time business intelligence. Available from: http://www.gravic.com/shadowbase/whitepapers.html (Accessed 20 May 2010).
4. Watson, J.H., Wixom, B.H., Hoffer, J.A., Lehman, R.A. and Reynolds, A. (2000). Real-Time business intelligence: Best practices at Continental Airlines. Information Systems Management 23(1):7:18.