Discover the pros and cons of traditional vs modern BI approaches. Learn which is better for your business needs. Read more now.

Business Intelligence (BI) has been around for decades and has undergone significant changes over time.

Traditional BI systems were once the only option, but modern BI tools are becoming more popular. Choosing between traditional and modern BI can be a challenge, especially for companies that are not well-versed in data analysis.

This article explores the differences between traditional and modern BI systems and helps readers understand which is better suited for their business needs.

1. Introduction

In today’s business environment, data plays a vital role in decision-making processes.

Business Intelligence (BI) helps companies analyze their data and extract meaningful insights. There are three types of BI systems: traditional, modern and emerging. Traditional BI has been around for decades, while modern BI is a newer approach to data analysis. Both traditional and modern BI have their pros and cons, and companies must choose the right system that fits their business needs. In this article, we will explore the differences between traditional and modern BI and help readers understand which is better.

2. What is Traditional BI?

Traditional BI refers to the old-school approach to data analysis.

It typically involves extracting data from various sources and storing it in a data warehouse. Once the data is stored, it is cleaned, transformed, and loaded into a multidimensional cube. End-users can access the data using pre-defined reports and dashboards. Traditional BI systems are usually built using proprietary software and require a team of IT professionals to manage.

2.1 Components of Traditional BI

Traditional BI systems have several components:

• Data Extraction: The process of retrieving data from various sources such as databases, spreadsheets, and flat files.
• Data Warehousing: The process of storing data in a central location.
• ETL (Extract, Transform, Load): The process of cleaning, transforming, and loading data into a multidimensional cube.
• Reporting: The process of creating pre-defined reports and dashboards that end-users can access.

2.2 Advantages of Traditional BI

• Established: Traditional BI systems have been around for decades and are well-established.
• Scalability: Traditional BI systems can handle large volumes of data and scale easily.
• Predictable Cost: Traditional BI systems have predictable costs since they are built using proprietary software.

2.3 Disadvantages of Traditional BI

• Complexity: Traditional BI systems are complex and require a team of IT professionals to manage.
• Time-consuming: Traditional BI systems can take months or even years to implement.
• Limited Flexibility: Traditional BI systems are often inflexible and cannot adapt to changing business needs.

3. What is Modern BI?

Modern BI refers to a newer approach to data analysis.

It typically involves using cloud-based software to store and analyze data. End-users can access the data using self-service tools, allowing them to create their reports and dashboards. Modern BI systems are usually built using open-source software and require less IT support.

3.1 Components of Modern BI

Modern BI systems have several components:

• Cloud-based Storage
• Self-service Analytics: The ability for end-users to create their reports and dashboards.
• Data Visualization: The process of creating interactive visualizations that help end-users understand the data.
• Data Preparation: The process of cleaning and transforming data into a format that is suitable for analysis.

3.2 Advantages of Modern BI

• Ease of Use: Modern BI systems are user-friendly and require little to no IT support.
• Flexibility: Modern BI systems can adapt to changing business needs and are highly customizable.
• Real-time Analysis: Modern BI systems can analyze data in real time, allowing companies to make informed decisions quickly.

3.3 Disadvantages of Modern BI

• Data Security: Storing data in the cloud can raise security concerns, especially for companies that deal with sensitive information.
• Learning Curve: While modern BI systems are user-friendly, there is still a learning curve for end-users who are not familiar with the software.
• Limited Scalability: Modern BI systems may not be able to handle large volumes of data as effectively as traditional BI systems.

4. Traditional vs Modern BI: Which is Better?

Choosing between traditional and modern BI systems can be a challenge.

Here are some factors to consider when deciding which system is better for your business:

4.1 Data Volume and Processing

If your company deals with large volumes of data, traditional BI systems may be a better option. Traditional BI systems are designed to handle large volumes of data and can scale easily. On the other hand, modern BI systems may struggle to handle large volumes of data, especially when it comes to real-time analysis.

4.2 User Interface and Visualization

Modern BI systems have an advantage when it comes to user interface and visualization. Modern BI systems offer self-service tools that allow end-users to create their reports and dashboards easily. In contrast, traditional BI systems often require IT support to create reports and dashboards.

4.3 Flexibility and Scalability

Modern BI systems are highly flexible and can adapt to changing business needs. They also offer scalability, allowing companies to add more users or data sources as needed. Traditional BI systems, while scalable, can be challenging to customize to meet specific business needs.

4.4 Cost and Maintenance

Traditional BI systems can be expensive to set up and maintain, requiring a team of IT professionals to manage. In contrast, modern BI systems are often less expensive and require little to no IT support.

5. How to Choose Between Traditional and Modern BI

Choosing between traditional and modern BI systems depends on your business needs. Here are some steps to follow when deciding which system is right for your business:

• Determine your data needs: Consider the volume and complexity of your data.
• Evaluate your budget: Consider the cost of setting up and maintaining a BI system.
• Consider your team’s skillset: Determine if your team has the skills to manage a traditional BI system or if a modern BI system would be a better fit.
• Consider the scalability of the system: Determine if the system can handle your business’s growth.

6. Conclusion

In conclusion, choosing between traditional and modern BI systems can be a challenge. Both systems have their pros and cons, and companies must choose the system that fits their business needs. Traditional BI systems are well-established and can handle large volumes of data, while modern BI systems are highly customizable and user-friendly. When deciding which system is right for your business, consider your data needs, budget, team’s skillset, and scalability of the system.

Want to know more?

Read our overview of traditional, modern and emerging BI to choose an approach that provides the right level of flexibility, scalability, and accessibility to help decision-makers make informed decisions.

Explore the Key Features of Each Type of BI in more detail, to help you make a decision.

7. FAQs

What is BI, and why is it important?

BI stands for Business Intelligence and is the process of analyzing data to extract meaningful insights that can help businesses make informed decisions. BI is important because it helps companies understand their data better and make data-driven decisions.

What are some common traditional BI tools?

Some common traditional BI tools include IBM Cognos, Oracle Business Intelligence, and SAP BusinessObjects.

What are some common modern BI tools?

Some common modern BI tools include Microsoft Power BI, Tableau, and QlikView.

Can traditional and modern BI systems be used together?

Yes, companies can use traditional and modern BI systems together to create a hybrid BI system that leverages the strengths of both systems.

Can modern BI systems handle large volumes of data?

While modern BI systems are highly scalable, they may struggle to handle large volumes of data, especially when it comes to real-time analysis. Companies should consider their data needs carefully when choosing between traditional and modern BI systems.