Business Intelligence vs. Operational Intelligence – What Businesses Should Know

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Operational intelligence (OI) enables continuous evaluation of information leading to timely action. It leverages live stream data. With Business Intelligence (BI) platforms, the underlying data is stale, so the platform is predicting future conditions based on past information. The data is there for mining and can provide insights, but it’s always within the context of what’s already occurred. Operational Intelligence closes the gap of things that occurred in the past and those that are happening in real time, which allows people to make impactful context-based decisions. It also enables course corrections, so if the business is a ship, then OI will send an alert that a reef is up ahead, while BI can tell the captain the conditions when they ran around on the reef previously.

The modern business environment requires firms to act with agility. This requires being able to change business outcomes dynamically and to improve them in real time. The firms that are behind in this capacity can use operational intelligence to catch up and capture new opportunities. According to a report from Inkwood Research, the operational intelligence market is expected to reach more than 14.3 billion by 2027, representing a CAGR of nearly 13 percent from 2019 to 2027. Firms are catching on to the need for operational intelligence, and the market’s responding with enhanced capabilities.

Addressing Chief Experience Officer Challenges

For some CXOs it’s a daunting challenge because they feel they must embark on complex AI-based initiatives. They’re bombarded with requests for improving intelligent operations, especially post-COVID as the delivery of many services shifted to virtual means. However, they should take a step back to recognize the core business needs haven’t changed. Firms as always require less downtime, more “thinking time”, better early warning systems, and improved information that help them plan more effectively.

For the past few months as the pandemic continued, many a company’s planning systems broke down and could not deliver. The owners and managers of these firms could not predict the depth of COVID-19’s disruption. So, their operations were plagued by inventory issues, with shortages of desired products and a worrying amount of inventory of products with little demand. In the event of rapidly evolving situations like the COVID crisis, CXOs need operational intelligence to effectively to realign their resources to so that their organizations continue to serve customer needs.

Cloud, AI and Big Data – a Story of Evolution

It is 2021 and the cloud, AI, and Big Data are all familiar technologies. However, they’ve all evolved over time. Big Data with AI is changing business outcomes across several industries. The trust in these technologies is increasing, and that is making complete automation possible. Meanwhile, the needs of businesses have also evolved. For example, visibility is no longer complete without intelligent early warning capabilities. This is further evolving to smart decision making. This pathway continues as firms make better decisions with the option to add automation to action the decisions.

Looking Ahead

So, what’s ahead for OI? For enterprises, the COVID crisis has laid bare two things. Firstly, digital transformation is not merely easy access to data through BI or Data Lakes. Interpreting the data and translating into action is far more important though often difficult. Secondly, manually cobbling together point data solutions is not enough when things head south. Departments and functions depend on each other. Educated guesses about the situation in another function might be okay during normal times but during a crisis the system must reflect the connected nature of the enterprise. The proactive alerts that it raises will be misleading if the data solutions do not reflect this reality.

The first reaction will be to consolidate the various point solutions. Anyone who has done such integrations in the past will vouch that this path is fraught with dangers. Bringing together diverse solutions built for different needs often requires significant revamp. OI by its very nature is pre-integrated and a much less risky option. The enterprise can meet its visibility, intelligence, and decision-automation objectives in a single deployment. The investments in BI and Data Lakes will not be wasted because for use cases where the latency is acceptable, the sanitized data from these tools can flow into OI.

Today’s enterprises need operational intelligence to succeed, and arguably to survive, and manage the ever-increasing unpredictability and complexity of business environments. Firms need to react to changing conditions, handle multi-channel sales, and manage a wide range of vendors and product suppliers. Handling this complexity requires that firms move beyond the limitations of BI to operational intelligence platforms that not only offer analytics but also actionable recommendations.

About the Author

Ratheesh Raveendran is the COO of OpsVeda, an operational intelligence software company. He has over two decades of experience in the software industry and has worked for large corporations as well as start-ups in various roles. He has a keen interest in data driven applications, especially in the areas of supply chains that are benefiting from improved data availability.

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