Question

Why do many organizations have data that cannot be converted to actionable information? What are the hurdles faced by firms that attempt to query transactional databases?

Answer 1

Despite being awash in data, many organizations are data rich but information poor. The big culprit limiting BI initiatives is getting data into a form where it can be used, analyzed, and turned into information. Legacy systems are older information systems that are often incompatible with other systems, technologies, and ways of conducting business. Incompatible legacy systems can be a major roadblock to turning data into information, and they can inhibit firm agility, holding back operational and strategic initiatives. The problem can be made worse by mergers and acquisitions, especially if a firm depends on operational systems that are incompatible with its partner. Firms might be under extended agreement with different vendors or outsourcers, and breaking a contract or invoking an escape clause may be costly.Another problem when turning data into information is that most transactional databases aren’t set up to be simultaneously accessed for reporting and analysis.When a customer buys something from a cash register, that action may post a sales record and deduct an item from the firm’s inventory.But if a manager asks a database to analyze historic sales trends showing the most and least profitable products over time, they may be asking a computer to look at thousands of transaction records, comparing results, and neatly ordering findings, which may bog down the system operation.Moderate