Content

1) Overview

2) What is BI?

3) Why BI?

4) Characteristics of BI

5) Features of BI

i) Data Integration

ii) Data Analysis

iii) Data Reporting

iv) Data Mining

6) Benefits

7) Limitations

8) Technologies Supporting BI

9) Reference

10)
 History of Business Intelligence.

In a 1958 article, IBM researcher Hans Peter Luhn used the term business intelligence. He
defined intelligence as: "the ability to apprehend the interrelationships of presented facts in
such a way as to guide action towards a desired goal."

In 1989 Howard Dresner (later a Gartner Group analyst) proposed BI as an umbrella term to
describe "concepts and methods to improve business decision making by using fact-based
support systems." It was not until the late 1990s that this usage was widespread.

What is Business Intelligence (BI)?

Business intelligence (BI) refers to computer-based techniques used in spotting, digging-out,

and analyzing business data, such as sales revenue by products and/or departments or
associated costs and incomes.

BI technologies provide historical, current, and predictive views of business operations.

Common functions of Business Intelligence technologies are reporting, online analytical
processing, analytics, data mining, business performance management, benchmarking, text
mining, and predictive analytics.

Business Intelligence often aims to support better business decision-making. Thus a BI system
can be called a decision support system (DSS). Though the term business intelligence is often
used as a synonym for competitive intelligence, because they both support decision making,
BI uses technologies, processes, and applications to analyze mostly internal, structured data
and business processes while competitive intelligence is done by gathering, analyzing and
disseminating information with or without support from technology and applications, and
focuses on all-source information and data (unstructured or structured), mostly external, but
also internal to a company, to support decision making.

Business Intelligence and Data Warehousing

Often BI applications use data gathered from a data warehouse or a data mart. However, not
all data warehouses are used for business intelligence, nor do all business intelligence
applications require a data warehouse.

In order to relate, but also separate the concepts of business intelligence and data warehouses,
Forrester Research often defines Business Intelligence in one of two ways. Typically,
Forrester uses the following broad definition: Business Intelligence is a set of methodologies,
processes, architectures, and technologies that transform raw data into meaningful and useful
information used to enable more effective strategic, tactical, and operational insights and
decision-making. But when using this definition, business intelligence also includes
technologies such as data integration, data quality, data warehousing, master data
management, text and content analytics, and many others that the market sometimes lumps
into the Information Management segment. Therefore, Forrester also refers to the data
preparation and data usage, as two separate, but closely linked segments of the business
intelligence architectural stack. And Forrester defines the latter, narrower business intelligence
market as: A set of methodologies, processes, architectures, and technologies that leverage
the output of information management processes for analysis, reporting, performance
management, and information delivery.

Where to apply Business Intelligence in an Enterprise?

Business Intelligence can be applied to the following business purposes (MARCKM), in order
to drive business value:

 Measurement – Program that creates a hierarchy of Performance metrics and

Benchmarking that informs business leaders about progress towards business
goals.

 Analytics – Program that builds quantitative processes for a business to arrive

at optimal decisions and to perform Business Knowledge Discovery.
Frequently involves: data mining, statistical analysis, Predictive analytics,
Predictive modeling, Business process modeling.

 Reporting/Enterprise Reporting – Program that builds infrastructure for

Strategic Reporting to serve the Strategic management of a business, NOT
Operational Reporting. Frequently involves: Data visualization, Executive
information system, OLAP.

 Collaboration/Collaboration platform – Program that gets different areas (both

inside and outside the business) to work together through Data sharing and
Electronic Data Interchange.

 Knowledge Management – Program to make the company data driven through

strategies and practices to identify, create, represent, distribute, and enable
adoption of insights and experiences that are true business knowledge.
 Knowledge Management leads to Learning Management and Regulatory
Compliance/Compliance.

Critical Success Factors of Business Intelligence Implementation

Although there could be many factors that could affect the implementation process of a
Business Intelligence system, research by Naveen K. Vodapalli shows that the following are
the critical success factors for business intelligence implementation:

1. Business-driven methodology and project management.

2. Clear vision and planning.
3. Committed management support & sponsorship.
4. Data management and quality.
5. Mapping solutions to user requirements.
6. Performance considerations of the BI system.
7. Robust and expandable framework.

The Future of Business Intelligence

A 2009 Gartner paper predicted these developments in the business intelligence market.

 Because of lack of information, processes, and tools, through 2012, more than 35
percent of the top 5,000 global companies will regularly fail to make insightful
decisions about significant changes in their business and markets.

 By 2012, business units will control at least 40 percent of the total budget for
business intelligence.

 By 2010, 20 per cent of organizations will have an industry-specific analytic

application delivered via software as a service as a standard component of their
business intelligence portfolio.

 In 2009, collaborative decision making emerged as a new product category that

combines social software with business intelligence platform capabilities.
  By 2012, one-third of analytic applications applied to business processes will be
delivered through coarse-grained application mashups.

Why Business Intelligence?

Competitive Analysis :-

Marketing should include competitor analysis. Who are your competitors? What customer
needs and preferences are you competing to meet? What are the similarities and differences
between their products/services and yours? What are the strengths and weaknesses of each of
their products and services? How do their prices compare to yours? How are they doing
overall? How do you plan to compete? Offer better quality services? Lower prices? More
support? Easier access to services? How are you uniquely suited to compete with them?

Location Analysis :-

Why here?
Why here, for the bricks and mortar location, will be the physical address (or addresses)
where your business will take place

o The elements that attracted you to this location.

o How you narrowed it down from the entire city to the specific location

How can I succeed here?

What’s the way to succeed here, that is how will I able to succeed in this particular location
which I had selected.

o Find competitors in the same area, or in an area of similar demographics, and identify
what they're doing to be successful.
o What your competitors are doing and what you will do differently.
Customer Behaviour Analysis :- 

Customer behaviour analysis is based on consumer buying behaviour, with the customer
playing the three distinct roles of user, payer and buyer. Relationship marketing is an
influential asset for customer behaviour analysis as it has a keen interest in the re-discovery of
the true meaning of marketing through the re-affirmation of the importance of the customer or
buyer.

Target Marketing

It involves breaking a market into segments and then concentrating your marketing efforts on
one or a few key segments. Target marketing can be the key to a small business’s success.

Sales strategy

It is a planned approach to account-management policy formation, prospect identification and

qualification, sales presentation, and order generation aimed at achieving a firm's sales quotas
or targets.

Business service management (BSM)

It is a methodology for monitoring and measuring information technology (IT) services from a
business perspective; in other words, BSM is a set of management software tools, processes
and methods to manage a data center via a business-centered approach.

Financial Management

The management of the finances of a business / organisation in order to achieve financial

objectives

Features of Business Integration (BI)

 Data Integration

 Data Analysis

 Data Reporting

 Data Mining
Data Integration

It involves combining data residing in different sources and providing users with a unified
view of these data. This process becomes significant in a variety of situations both
commercial (when two similar companies need to merge their databases) and scientific
(combining research results from different bioinformatics repositories, for example). Data
integration appears with increasing frequency as the volume and the need to share existing
data explodes. It has become the focus of extensive theoretical work, and numerous open
problems remain unsolved.

Data Analysis

It is a process of inspecting, cleaning, transforming, and modeling data with the goal of
highlighting useful information, suggesting conclusions, and supporting decision making.
Data analysis has multiple facets and approaches, encompassing diverse techniques under a
variety of names, in different business, science, and social science domains.

Data mining is a particular data analysis technique that focuses on modeling and knowledge
discovery for predictive rather than purely descriptive purposes. Business intelligence covers
data analysis that relies heavily on aggregation, focusing on business information. In
statistical applications, some people divide data analysis into descriptive statistics, exploratory
data analysis, and confirmatory data analysis. EDA focuses on discovering new features in the
data and CDA on confirming or falsifying existing hypotheses. Predictive analytics focuses on
application of statistical or structural models for predictive forecasting or classification, while
text analytics applies statistical, linguistic, and structural techniques to extract and classify
information from textual sources, a species of unstructured data. All are varieties of data
analysis.

Data integration is a precursor to data analysis, and data analysis is closely linked to data
visualization and data dissemination. The term data analysis is sometimes used as a synonym
for data modeling, which is unrelated to the subject of this article.

Data Reporting

Most business executives still express disappointment about the business systems in place –
not because they do not efficiently support the business processes they are designed for, but
because they do not cater to 3 essentials of reporting – Accuracy, Timeliness and Presentation.
Executives often express that existing reporting is not what they need, arrives to them too late
to take meaningful action, and is not presented in the most useful way for their needs. Add to
this the variety of report formats(Excel or PDF), and many executives find themselves or their
staff manually manipulating large quantities of data to provide meaningful reports on a regular
basis. Executives have expressed a need for two types

of reporting. One for regular consistent reporting that changes infrequently. These include
standard financial, HR and CRM reports. The second is for reporting that is highly dynamic,
changing from day to day, moment to moment. Data marts and Business Intelligence tools
help ease some of the technical challenges, but to what extent? Most businesses executives
agree that data marts need to be built around processes not applications. If the need is to report
on a CRM function, it would be helpful to aggregate all relevant data leveraging a key CRM
database that supports most processes. The same is true for Human Resource, Finance and
Supply Chain reporting. Large integrated systems are not critical to such a reporting
definition, but it is critical that the reporting solution leverage the application/process
knowledge of these enterprise resources, either internal or external.

Data Mining

It is the process of extracting patterns from data. Data mining is seen as an increasingly
important tool by modern business to transform data into an informational advantage. It is
currently used in a wide range of profiling practices, such as marketing, surveillance, fraud
detection, and scientific discovery.

The related terms data dredging, data fishing and data snooping refer to the use of data
mining techniques to sample portions of the larger population data set that are (or may be) too
small for reliable statistical inferences to be made about the validity of any patterns discovered
(see also data-snooping bias). These techniques can, however, be used in the creation of new
hypotheses to test against the larger data populations.

Benefits

Some of the benefits that a data warehouse provides are as follows:

 A data warehouse provides a common data model for all data of interest regardless of
the data's source. This makes it easier to report and analyze information than it would
be if multiple data models were used to retrieve information such as sales invoices,
order receipts, general ledger charges, etc.
 Prior to loading data into the data warehouse, inconsistencies are identified and
resolved. This greatly simplifies reporting and analysis.
 Information in the data warehouse is under the control of data warehouse users so that,
even if the source system data are purged over time, the information in the warehouse
can be stored safely for extended periods of time.
 Because they are separate from operational systems, data warehouses provide retrieval
of data without slowing down operational systems.
  Data warehouses can work in conjunction with and, hence, enhance the value of
operational business applications, notably customer relationship management (CRM)
systems.
 Data warehouses facilitate decision support system applications such as trend reports
(e.g., the items with the most sales in a particular area within the last two years),
exception reports, and reports that show actual performance versus goals.

Disadvantages

There are also disadvantages to using a data warehouse. Some of them are:

 Data warehouses are not the optimal environment for unstructured data.
 Because data must be extracted, transformed and loaded into the warehouse, there is
an element of latency in data warehouse data.
 Over their life, data warehouses can have high costs.
 Data warehouses can get outdated relatively quickly. There is a cost of delivering
suboptimal information to the organization.
 There is often a fine line between data warehouses and operational systems. Duplicate,
expensive functionality may be developed. Or, functionality may be developed in the
data warehouse that, in retrospect, should have been developed in the operational
systems.