Business Intelligence Vendors

Business intelligence and analytics are tools and technologies provided by

big companies like SAP, Oracle, IBM, SAS Institute, and Microsoft. They help
large corporations, especially Fortune 500 companies, make sense of their
data to make better decisions. These tools include hardware and software
packages that these companies sell. Microsoft also offers similar tools, but
they're aimed at smaller to medium-sized businesses. They're designed to be
easy to use, often based on familiar programs like Excel spreadsheets,
Sharepoint for collaboration, and SQL Server for databases.In 2010, the
market for these tools in the U.S. was estimated to be worth $10.5 billion and
was growing rapidly at over 20% annually. This shows that business
intelligence and analytics are becoming increasingly important in the world
of business software.
Figure 12-3 gives an overview of a business intelligence environment, highlighting the
kinds of hardware, software, and management capabilities that the major vendors offer
and that firms develop over time.
6 elements in Business Intelligence Environment

1. Data from the business environment: Businesses collect a lot of

information from various sources like mobile devices and the internet. This
information can be structured (organized neatly) or unstructured (like emails
or social media posts). To make sense of all this data, businesses need to
bring it together and organize it in a way that humans can understand and
use to make decisions.

2. Business intelligence infrastructure: Think of this as the foundation of

a building. A powerful database system collects and stores all the important
data that a business needs to operate. This data might come from everyday
transactions (like sales or purchases) and is stored in databases. Sometimes,
all this data is combined and organized into a big warehouse (like a massive
storage room) or into smaller data marts (like smaller storage closets).

3. Business analytics toolset: These are like the tools in a toolbox that
help analyze the data stored in the database. They include software that can
crunch the numbers, create reports, answer questions from managers, and
keep track of how well the business is doing. These tools help businesses
understand their performance by looking at key indicators, like sales
numbers or customer satisfaction scores.

4. Managerial users and methods: This part emphasizes that while

technology is essential, it's ultimately people who make decisions. Managers
use various methods to make sense of the data and set goals for the
business. They might use tools like business performance management or
balanced scorecards, focusing on key indicators and analyzing changes in
the business environment. Without proper oversight, analytics can provide a
lot of information but might not address the real issues. Humans are still
needed to ask the right questions and make sense of the data.

5. Delivery platform—MIS, DSS, ESS: This refers to how the results from
business intelligence and analytics are shared with different people in the
organization. MIS (Management Information Systems), DSS (Decision Support
Systems), and ESS (Executive Support Systems) are different systems used
to deliver information to operational employees, middle managers, and
senior executives respectively. In the past, these systems couldn't share data
and operated separately. But today, with business intelligence and analytics
tools, all this information can be integrated and accessed from desktop or
mobile platforms.

6. User interface: This talks about how users interact with the data.
Nowadays, business people aren't confined to their desks; they need access
to data on the go. Visual representation of data, like dashboards and
scorecards, are more effective for understanding than traditional reports.
Business analytics software now emphasizes visual techniques and can
deliver reports on mobile devices like Blackberrys and iPhones. Additionally,
these tools are integrating with social media platforms like Twitter and
Facebook to support decision-making in online group settings.
Business intelligence and analytics promise to deliver correct, nearly real-time
information to decision makers, and the analytic tools help them quickly understand the
information and take action. There are 6 analytic functionalities that BI systems
deliver to achieve these ends:
1. Production reports: These are standard reports designed specifically for
certain industries.
2. Parameterized reports: Users can input different parameters, like
region and time, to filter data and understand how certain factors impact
outcomes. For example, Starbucks might use this to see when and where
their coffee sells the most to tailor marketing campaigns accordingly.
3. Dashboards/scorecards: These are visual tools that display
performance data in a user-friendly format, often customizable to meet
specific needs.
4. Ad hoc query/search/report creation: Users can create their own
reports on the fly by searching and querying the data themselves.
5. Drill down: This feature allows users to go from a general overview to a
more detailed view of the data.
6. Forecasts, scenarios, models: Users can make predictions about future
outcomes, explore different scenarios, and analyze data using statistical
tools. For instance, they can forecast sales numbers or analyze the impact of
different marketing strategies.
Let's simplify this explanation:

In earlier chapters, we discussed the different types of people in a business,

from top-level executives to lower-level employees. This also applies to
Business Intelligence (BI) and Business Analytics (BA) systems.

1. Senior executives: These are high-ranking leaders in the company. They

typically use BI to keep an eye on what's happening across the business,
often using visual tools like dashboards and scorecards for easy monitoring.
2. Middle managers and analysts: These individuals are more involved in
analyzing data. They spend time digging into the details, running queries,
and examining data from various angles to gain insights.
3. Operational employees: These are the frontline workers who are
directly involved in day-to-day operations. They often rely on pre-made
reports that provide them with specific information needed for their tasks.
Additionally, customers and suppliers may also use similar prepackaged
reports to understand relevant data.
Overall, the majority of BI users are casual users who mainly rely on standard
reports. The level of involvement and interaction with the data varies
depending on the role and responsibilities within the organization.

Capital One, a large financial services company, conducts a significant

number of experiments every year, totaling more than 30,000. These
experiments involve testing various factors such as interest rates, incentives,
and the design of direct mail packages. The primary goal of these
experiments is to identify the most promising potential customers for Capital
One's credit card offers.
By conducting these experiments, Capital One aims to target individuals who
are not only likely to sign up for a credit card but also to responsibly manage
their credit card balances by paying them back on time. In essence, the
company is trying to pinpoint the individuals who are most likely to become
profitable customers.
One of the key tools Capital One employs in this endeavor is predictive
analytics. Predictive analytics involves using data, statistical algorithms, and
machine learning techniques to identify patterns and make predictions about
future events or behaviors. In the context of Capital One's credit card
business, predictive analytics has proven to be highly effective.
Specifically, predictive analytics helps Capital One in two significant ways:
1.Identifying ideal customers: By analyzing vast amounts of data,
predictive analytics helps Capital One pinpoint individuals who are most
likely to respond positively to credit card offers. This analysis takes into
account various factors such as past spending behavior, credit history,
demographic information, and responses to previous marketing campaigns.
2. Risk identification: Predictive analytics also enables Capital One to
identify customers who may be at risk of leaving, or "churning." By analyzing
patterns in customer behavior and identifying early warning signs, such as a
decrease in card usage or missed payments, Capital One can proactively
take steps to retain these customers. This could involve offering special
promotions or personalized incentives to encourage them to stay.
Overall, by leveraging predictive analytics and conducting a high volume of
experiments, Capital One can effectively target the right customers for its
credit card offers while also mitigating the risk of losing existing customers.
This data-driven approach helps the company make more informed decisions
and ultimately drive business growth in the competitive credit card industry.
Data visualization tools are software applications that help users
understand and analyze large amounts of data by presenting it visually,
rather than in traditional text-based formats. These tools create graphs,
charts, and other visual representations of data, making it easier for users to
identify patterns, trends, and relationships within the data.
For example, Day & Zimmermann, a company that provides industrial,
defense, and workforce solutions, uses data visualization tools to gain
detailed, real-time insights into their inventory of contractors and workers.
They achieve this by utilizing dashboards that display real-time data sourced
from their SAP ERP Human Capital Management system.
Instead of relying on static paper reports, these dashboards provide dynamic,
up-to-date information about staffing levels. Users can easily see which types
of workers are available in specific locations and when projects are
scheduled for completion. If a project is progressing ahead of schedule,
decision-makers can quickly identify opportunities to reassign workers to
other tasks or projects using the information displayed on the dashboards.

Geographic Information Systems (GIS) are tools that help decision-makers

visualize and understand problems that involve geographical information.
They tie location data to points, lines, and areas on a map, allowing users to
see spatial relationships and patterns.
Here's a breakdown of how GIS works and its applications:
1.Visualizing Geographic Distribution: GIS software allows users to see
the distribution of people, resources, or other factors across a geographic
area. This visualization helps decision-makers understand spatial
relationships and make informed choices.
2. Modeling Capabilities: Some GIS software includes modeling
capabilities, which allow users to manipulate the data and create different
scenarios. For example, they can simulate changes in population density or
land use and automatically see how these changes affect various outcomes.
3.Applications: GIS has diverse applications across different sectors. For
instance:
- In government, GIS can be used to calculate response times during
natural disasters or emergencies, helping officials allocate resources more
effectively.
 - In banking, GIS can help identify optimal locations for new branches or
ATM terminals based on factors like population density, demographic trends,
and proximity to existing branches.
Sa parang mapa
Somerset County in New Jersey made a special map system using ESRI
software. This map is on the internet and shows information about floods. It
helps emergency workers get ready for floods and helps people living in the
county know what to do if there's a flood. This map also helps emergency
managers decide what to do faster during floods.
Business Intelligence in the Public Sector
In addition to businesses, government organizations like school districts also
use business intelligence systems. For example, in the Interactive Session on
Organizations, it talks about how a school district started using these
systems to measure and understand how well students are doing in school.
By collecting and analyzing data on student performance, they can figure out
how to use their resources better to improve student learning and help
teachers do their jobs more effectively. Essentially, they're using data to
make smarter decisions about where to invest time and money to make
education better for everyone involved.

This passage discusses two different approaches organizations can take

when adopting Business Intelligence (BI) and Business Analytics (BA)
capabilities: the one-stop integrated solution and the multiple best-of-breed
vendor solutions.
1.One-stop Integrated Solutions: This approach involves purchasing a
complete hardware and software solution from a single vendor, such as IBM,
HP, or Oracle. This solution is designed to work seamlessly together but may
limit flexibility and make the organization dependent on the pricing and
decisions of that single vendor.
2. Multiple Best-of-breed Vendor Solutions: This approach involves
selecting the best individual components from different vendors, such as
database solutions from one vendor and analytics software from another.
While this offers greater flexibility and independence, integrating these
components may be challenging and can lead to compatibility issues.
Both approaches have their advantages and risks. The integrated solution
offers convenience and potentially smoother integration, but it may lock the
organization into a single vendor and limit flexibility. The best-of-breed
approach allows for greater customization and flexibility, but it requires
careful integration and may lead to compatibility challenges.
Regardless of the approach chosen, adopting BI and BA systems involves
significant investment and locks the organization into a set of vendors.
Switching systems later can be costly and disruptive. Therefore, it's essential
for managers to critically evaluate vendor claims, understand how these
systems can benefit their business, and assess whether the investment is
justified by the potential benefits.
Business Intelligence Constituence
The passage outlines the hierarchy of management within a business and
how the information needs and decision-making processes differ at each
level:

1. **Lower Supervisory Management**: Frontline supervisors focus on day-to-

day operations, needing detailed and structured information for efficient task
management.

2. **Middle Management**: These managers coordinate departmental

operations and translate higher-level strategies into actionable plans,
requiring both operational details and broader strategic insights.

3. **Senior Management**: Executives at the highest levels set overall

direction and strategy, making less structured, more strategic decisions.
They need comprehensive business intelligence and market insights.

As management levels ascend, decision-making becomes less structured,

with a greater emphasis on strategic thinking and broader information needs.

DECISION SUPPORT FOR OPERATIONAL AND MIDDLE

MANAGEMENT
This passage highlights the responsibilities of operational and middle
management in monitoring various aspects of a business's performance.
They oversee critical areas such as machine downtime in factories, daily
sales in franchise food stores, and website traffic. The decisions made by
these managers are typically structured, meaning they follow established
protocols or procedures. This structured decision-making approach ensures
efficiency and consistency in managing day-to-day operations and
responding to routine challenges within the business.

Management information systems (MIS)

This passage explains how middle managers use Management Information
Systems (MIS) to aid decision-making. MIS produces routine production
reports from data in transaction processing systems (TPS). These reports are
now accessible online, allowing interactive data analysis. Managers also use
exception reports to highlight unusual conditions, like low sales quotas or
overspending. This streamlines analysis, helping managers focus on
significant deviations and make informed decisions efficiently.

Support for Semistructured Decisions

This passage describes some managers as "super users" who are skilled
analysts. They create their own reports and use advanced analytics to
uncover patterns in data, simulate business scenarios, or test hypotheses.
Essentially, they possess expertise in data analysis to inform strategic
decision-making.
Decision support systems (DSS)
This passage explains that Decision Support Systems (DSS) rely more on
modeling than Management Information Systems (MIS). In DSS,
mathematical or analytical models are used for what-if analysis. This involves
simulating different scenarios by adjusting specific variables to predict
outcomes based on changes in those variables. Essentially, DSS enables
users to explore potential outcomes by manipulating input values within
analytical models.

Sensitivity analysis
This passage explains sensitivity analysis models, which repeatedly ask
what-if questions to predict outcomes when variables are changed. Backward
sensitivity analysis helps in goal-seeking by determining what adjustments
are needed to achieve a specific target. For instance, it could calculate how
much a product's price must be reduced to sell 1 million units next year.

Figure 12-5
This table presents the outcomes of a sensitivity analysis concerning the
impact of altering the sales price of a necktie and the cost per unit on the
product's break-even point. It addresses the inquiry: "How does the break-
even point change when the sales price and manufacturing cost per unit are
adjusted?" In essence, it illustrates how variations in these factors affect the
point at which total revenue equals total costs, indicating whether the
product is profitable or not.

Gigure 12-6 (meanwhile this is the pivot table)

This excerpt describes a Microsoft Excel pivot table analyzing a company's
order transactions. The table compares two dimensions: sales region and the
source of customer contact (Web banner ad or email) for each order. The
purpose is to determine if the customer source affects sales in addition to
region. The pivot table reveals that the majority of customers are from the
West region and that banner advertising generates most customers across
all regions. In summary, it shows the regional distribution of customers and
highlights the effectiveness of banner advertising as the primary source of
customer acquisition.

DECISION SUPPORT FOR SENIOR MANAGEMENT:

BALANCED SCORECARD AND ENTERPRISE
PERFORMANCE MANAGEMENT METHODS
This statement explains that Executive Support Systems (ESS) aim to help C-
level executives focus on vital performance information crucial for the firm's
profitability and success.

FIGURE 12-7 THE BALANCED SCORECARD FRAMEWORK

The balanced scorecard framework is termed "balanced" because it prompts
managers to consider more than just financial performance. Instead, it
encourages a focus on factors they can influence today, like business
process efficiency, customer satisfaction, and employee training. After
consultants and senior executives develop a scorecard, the next step
involves automating information flow to executives and managers for each
key performance indicator. Numerous consulting and software firms provide
these capabilities, often resulting in the implementation of Executive Support
Systems (ESS).

Business performance management (BPM)

This passage introduces business performance management (BPM), a
methodology akin to the balanced scorecard. BPM, defined in 2004 by
industry leaders like Oracle, SAP, and IBM, systematically translates a firm's
strategies into operational targets. It then measures progress using Key
Performance Indicators (KPIs) drawn from enterprise database systems,
emphasizing a stronger strategic focus compared to the balanced scorecard.

GROUP DECISION-SUPPORT SYSTEMS (GDSS)

This passage explains Group Decision Support Systems (GDSS), which are
interactive computer-based systems designed to assist groups of decision-
makers in solving unstructured problems. Unlike general collaboration
systems and web-based tools for communication, GDSS specifically focus on
providing tools and technologies tailored for group decision-making
processes. Whether decision-makers are located together or in different
locations, GDSS facilitate effective collaboration and problem-solving among
group members.