Business Intelligence

Understanding Business
Intelligence Part II
 Objectives
At the end of this lecture, you should be able to:
• Discuss intelligence creation and use of BI
• Explain BI governance
• Describe the major types of BI users
• Describe major issues in implementing BI
 A The benefits of BI
⚫The Benefits of BI
• Time savings • Cost savings
• Single version of truth • Faster, more accurate reporting
• Improved strategies and plans • Improved decision making
• Improved tactical decisions • Improved customer service
• More efficient processes • Increased revenue

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 The business values of BI
• The methodologies of assessing BI values are complex – due
to many intangible benefits
• One way to present the business value of BI is to pose
business questions and show how they are answered with the
support of BI
 The business values of BI
• Key Issues/perkara penting and Framework for BI Analysis
• How can enterprises maximize their BI investments?
• What BI functionality do enterprises need, and what
are they using today?
• What are some of the hidden costs associated with BI
initiatives?
 Intelligence Creation and Use

BI initiatives typically
follow a similar process
to that used in military
intelligence

The process is cyclical

with series of interrelated
steps
 BI Governance / tadbir urus
Governance refers to defining and implementing an
infrastructure and strategy that will support the enterprise /
syarikat besar goals/matlamat. “

BI governance is the process of prioritizing BI applications

on the basis of costs and benefits. It builds in flexibility by
creating robust processes capable of scaling to any size
and scope, and all aspects related to the approach of BI
efforts are clearly defined. Along with a mechanism to
manage your BI strategy, BI governance provides
measurements for gauging success.
 BI Governance
BI Governance can be defined from three different, unique perspectives:
1. As a resource rationalization exercise. This is the traditional definition of
BI Governance, a prioritization mechanism by which projects can be
approved, rejected and sequenced based on specific criteria. Many
companies today have some kind of process to prioritize BI requests;
however most of them still rely on subjective factors to determine how a
project should move forward.

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 BI Governance
BI Governance can be defined from three different, unique perspectives:
2. As a series of guidelines/rules/recommendations. This is a relatively new
way of defining BI Governance. Traditionally IT has been solely
responsible for defining the Architecture, Standards and Best Practices to
follow in Business Intelligence, however as business starts realizing the
significant impact that these decisions may have in BI Projects there has
been a trend to make these topics part of the BI Governance process.

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 BI Governance
BI Governance can be defined from three different, unique perspectives:
3. As the definition of roles and responsibilities for both IT and Business
stakeholders. As Business Intelligence projects are by nature highly
complex, establishing the proper interaction and outlining areas of
responsibility between and IT and the Business becomes critical for a
project to succeed.

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 The Major Theories and
Characteristics of Business Intelligence (BI)

• BI is not transaction processing, OLTP vs OLAP

• Online Transaction Processing Systems (OLTP)
– Systems that handle a company’s routine ongoing business
• Online Analytic Processing (OLAP)
– An information system (IS) that enables the user, while at a
PC, to query/permintaan the system, conduct an analysis,
and so on. /realtime
 Toward Competitive
Intelligence and Advantage
• The apparent outcomes of BI
– Barriers to entry of a new competitor are being
significantly diminished
– Because of the Web revolution and increasing
globalization, companies throughout the world are
challenging major players in industries
– The ability to deliver goods worldwide is making it easier
for potential competitors to get products and services to
more customers almost anywhere
– Companies are finding better or less expensive suppliers all
over the globe
 Toward Competitive
Intelligence and Advantage

• The Strategic Imperative of BI

– A strategic imperative is an action that must be taken, or a
capability that must exist, if an organization is to survive
and prosper. It is not optional.
– Companies today must change or advance strategy in
order to stay on step ahead of increasing competitive
pressures, hence the studies of Competitive Intelligence
– BI is a strategic imperative because it enables managers to
make better decisions than they could without it. If some
firms in an industry or market are making better decisions
and the rest are not, those that do not make better
decisions will fail.
 Toward Competitive
Intelligence and Advantage
• Competitive Intelligence (CI)
– Competitive intelligence is the process of obtaining as
much information as is legally and ethically possible about
one’s competitors, their plans and their products; then
organizing and analyzing it to provide a basis for
management decision making.
– CI implies tracking what competitors are doing by
gathering material on their recent and in-process activities
 Toward Competitive
Intelligence and Advantage
• Sustaining competitive advantage
– A competitive advantage is anything that enables a firm to
obtain a higher level of profitability than is typical for its
industry, enables a firm to obtain a higher level of
profitability than is typical for its industry
– through building brand and customer loyalty using BI
applications
– can arise from an organization’s possession of unique
resources or competencies (Competencies can include
such things as ability to innovate, quality, customer
responsiveness, and more. Many such competencies can
be enhanced via information provided by BI)
 BI Users

• There are five (5) major types of BI users:

1. IT staff -the developers and administrators of the tools to
be used by the others.
2. Power users - people such as business analysts who have
advanced skills in the use of BI tools and use them
regularly.
3. Executives - top managers of any organization. Their
needs are typically met by tools such as dashboards,
which display measurements of critical success factors
and let users “drill down” into areas that catch their
interest.
 BI Users

• There are five major types of BI users:

4. Occasional information customers - knowledge worker in
the organization. Ease of use is important to them, since
their use does not justify extensive training and they
would in any case forget much of what they learn from
one usage to the next.
5. Partners & Consumers - focused needs based on their
relationship to the firm in question. Their access to
information is limited for security reasons, so they are
often restricted to predefined queries and reports.
 Major Issues/Isu besar in implementing
BI
• Understanding and dealing with the user community. There
are likely to be many different types of users, some
strategically oriented and others whose needs are more
tactical. The BI team must appreciate the different classes of
potential BI users.
• Planning and alignment with business strategy. BI is not just a
technical exercise for the IS department.
• Organizational culture, which determines how enthusiasm for
BI use can be built.
• Integration of multiple BI projects: with each other, with other
organizational IS and with the IS partners.
 Review Questions
1. Explain the term ‘strategy gap’ from BI’s perspectives

2. Identify the steps of intelligence creation and use.

3. Explain the term BI governance

4. Compare and contrast OLTP and OLAP

5. Explain how can BI provide a competitive advantage in

an industry?
 Now ask if ..
You are able to:
• Discuss intelligence creation and use of BI
• Explain BI governance
• Describe the major types of BI users
• Describe major issues in implementing BI