Topic 1

Introduction of Business Intelligence

ISP642 – BUSINESS
INTELLIGENCE
 Learning Objectives
2

 Understand today's turbulent business environment

 Describe how organizations survive and even excel in
such an environment (solving problems and exploiting
opportunities)
 Describe the business intelligence (BI) concepts
 Understand the architecture and components for
business BI
 Understand the benefits of BI
 Changing Business Environment
3

 Companies are moving aggressively to

computerized support of their operations
 Business Pressures–Responses–Support

Model
 Business pressures result of today's competitive
business climate
 Responses to counter the pressures
 Support to facilitate the monitoring of the
environment and enhances the response actions
taken by organizations
 Business Pressures–Responses–Support Model
4
 The Business Environment
5

 The environment in which organizations operate

today is becoming more and more complex,
creating:
 opportunities, and
 problems
 Example:
 globalization
 can easily find suppliers and customers in many countries
that causes great opportunities to emerge
 The Business Environment Factors
6

 Business environment factors:

 Markets
 Consumer demands
 Technology
 Societal
 Business Environment Factors
7

FACTOR DESCRIPTION
Markets Strong competition
Expanding global markets
Blooming electronic markets on the Internet
Innovative marketing methods
Opportunities for outsourcing with IT support
Need for real-time, on-demand transactions
Consumer Desire for customization
demand Desire for quality, diversity of products, and speed of delivery
Customers getting powerful and less loyal
Technology More innovations, new products, and new services
Increasing obsolescence rate
Increasing information overload
Social networking, Web 2.0 and beyond
Societal Growing government regulations and deregulation
Workforce more diversified, older, and composed of more women
Prime concerns of homeland security and terrorist attacks
Necessity of Sarbanes-Oxley Act and other reporting-related legislation
Increasing social responsibility of companies
Greater emphasis on sustainability
 Organizational Responses
8

 Both private and public organizations are aware of

today’s business environment and pressures. They
use different actions to counter the pressures.
 Other actions taken by manager :
 employ strategic planning
 improve partnership relationship
 encourage innovation and creativity
 automate certain decision processes, especially
those dealing with customers.
 Closing The Strategy Gap
9

 Strategy gap
 refers to the gap between the current performance of an
organization and its desired performance as expressed in
 its Mission
 Objectives
 Goals and
 the Strategy for achieving them.
 One of the major objectives of computerized decision
support is to facilitate the closing strategy gap
 How Smart is BI Without
10
Strategies?

Source : Analytics Solutions from SAP

Link : http://www.youtube.com/watch?v=L1WSxcUfrsY
Why BI?

Source: Prasad & Acharya (2011)

 Why Use BI?
12

 BI can be used to support a wide range of

business decisions from operational to
strategic

 The success of a BI program depends on the

approach or methodology used to implement
the framework and the related components.
 Operational to Strategic (video)
13
 Imagine this…

http://www.google.com.my/imgres?imgurl=http://image.slidesharecdn.com/ibmcognosrobertmoberg-101118061229-phpapp01/95
Challenges in Retail Industry

Source: Prasad & Acharya (2011)

8 Ways to Use BI Better
 1. Develop an analytical culture
 2. Deliver information wherever it’s needed
 3. Make more use of unstructured data
 4. Focus on the future
 5. View information pictorially
 6. Keep information up to date
 7. Mine social media for intelligence
 8. Ensure that managers use the information

http://www.fm-magazine.com/feature/list/8-ways-%E2%80%A6-use-business-intelligence-better#
1. Develop an analytical culture
 Need to develop a workforce that’s enthusiastic
about finding insights from business intelligence
(BI),
 But
 most investment goes into developing the BI tools and
 far too little into making the best use of them.
 Solution
 many firms have access to so much data that it’s easy to pick
material that supports the firm’s theories.
2. Deliver information wherever it’s needed

 Nowadays, most employees work on mobile

devices.
 Need ability to view real-time data
 So, the ability to process big data on these
anywhere and at any time is crucial.
 Implication:
 Failure to deliver the needed information could hamper
relationships with customers as well as securing new
customers
3. Make more use of unstructured data

 In the past, most of the information in BI systems came from

 structured data
 sales figures
 Today, some of the most vital insights are hidden in a vast mass of
unstructured data
 E-mails
 Word documents
 PDF files and images
 The trend:
 The volume of unstructured data is growing at 50 per cent a year.
 Companies could analyse their unstructured data
 to spot trends indicating fraudulent behaviour
 to gauge attitudes to the organisation among customers and employees
4. Focus on the future
 Firms put concerns more on what has happened rather than
what’s likely to happen.
 So firms must use predictive analytics
 To remove complexity
 allowing users to focus on
 making decisions
 asking questions and
 exploring data
 to monitor events and take action automatically.
 For example:
 The predictive system could forecast
 ‘plan-to-quit’ customers and quickly take action to discourage them
5. Visualization
 converting raw data into pictorial form
 a powerful way of understanding complex
information (Yau, 2013).
 enable users to see “trends, patterns and outliers”.
 involves answering four key questions:
 What data do you have?
 What do you want to know about it?
 Which visualization techniques should you use?
 And does what you can see make sense?
6. Keep information up to date
 In a fast-moving business world, information that
was useful a year ago may not now be adequate.
 Managers need information about business
performance in order to make effective business
decisions
 BI solution providers must include the right
combination of data dimensions to answer the key
questions that managers ask
7. Mine social media for intelligence

 Social media sites

 Online forums
 Blogs
 News sites
 are especially useful for monitoring rivals’ activities.
 So firms must
 analyze a range of relevant sources to gain a full picture of the
industry
 Break down, clean and categorize the data
 To obtain
 Accurate data and useful information
8. Ensure that managers use the information

 A great BI is a waste if managers aren’t using it.

 People process tabular information sequentially and
graphs using their visual ability.
 Graphs for communicating insights when the message
is contained in the shape of its values:
 such as a trend, a pattern of behaviour or evidence of
exceptional performance
 So, always design the simplest chart possible to
make the message clear and obvious.
 BI Golden Rule
25

“Get the
right information
to the
right people
at the
right time”
 Source : Avitas Technologies , LLC
Link : http://www.youtube.com/watch?v=0aHtHl-jcAs
 Introduction to BI Framework
27

 Business Intelligence (BI) Framework

 refers to tools and technologies for collecting,
storing and analyzing available data about an
organization's operations.
 This helps
 to make improved, timely and optimal business
decisions.
 Introduction to BI Framework
28

 Business Intelligence (BI) Framework

 refers to tools and technologies for collecting, storing and
analyzing available data about an organization's
operations. This helps it to make improved, timely and
optimal business decisions.
 Implementing BI requires data related to different
factors that affect the operations of the organization
or business unit (BU) in the organization.
 BI solutions are implemented by using technologies
provided by products such as SAP-BW, Oracle BI,
Seibel Analytics, and more
 Connected BI Framework
29
 Business Intelligence (BI)
30
Concepts
 BI is an umbrella term that combines architectures, tools,
databases, analytical tools, applications, and methodologies
 Business Intelligence (BI) is a set of methodologies and
concepts to improve decision making in business through use of
facts- based system
 BI is a content-free expression, so it means different things to
different people
 BI's major objective is to enable easy access to data (and
models) to provide business managers with the ability to
conduct analysis
 BI helps transform data, to information (and knowledge), to
decisions and finally to action
 What is Business Intelligence?
31

 BI refers to skills, processes, technologies,

applications and practices used to support decision
making (McCarthy, 2011)

SKILL PROCESS
TECHNOLOGY APPLICATION
PRACTICES
 What is Business Intelligence?
32

 Business Intelligence enables the business to make

intelligent, fact-based decisions

Aggregate Present Enrich Inform a

Data Data Data Decision
 What is Business Intelligence?
33

 BI's major objective is to enable easy access to data (and

models) to provide business managers with the ability to
conduct analysis
 Why Do Companies Need BI?
34

What’s the best that can

Optimization happen?

Predictive Modeling What will happen next?

Tactical /
What if these trends continue?
Competitive

Forecasting/extrapolation Strategic BI
Advantage

Why is this happening?

Statistical analysis

Alerts What actions are needed?

Query/drill down Where exactly is the problem? Operational BI

Ad hoc reports How many, how often, where?

Standard reports What happened?

Sophistication of Intelligence
© 2008 Accenture.
 Why Do Companies Need BI?
35

 PAST →PRESENT →FUTURE

BI Lifecycle for Decision Making

Source:
Chincilla J., Business Intelligence SQL Server, 2008
 A Brief History of BI
37

 The term BI was coined by the Gartner Group in the

mid-1990s
 However, the concept is much older
 1970s - MIS reporting - static/periodic reports
 1980s - Executive Information Systems (EIS)
 1990s - OLAP, dynamic, multidimensional, ad-hoc
reporting → coining of the term “BI”
 2005s - Inclusion of AI and Data/Text Mining
capabilities; Web-based Portals/Dashboards
 2010s - Big Data and Analytics
 The Evolution of BI Capabilities
38
 The Architecture of BI
39

 A BI system has four major components

 a data warehouse, with its source data
 business analytics, a collection of tools for
manipulating, mining, and analyzing the data in the
data warehouse;
 business performance management (BPM) for
monitoring and analyzing performance
 a user interface (e.g., dashboard)
 Components in a BI Architecture
40

 The data warehouse is a large repository of well-

organized historical data
 Business analytics are the tools that allow
transformation of data into information and
knowledge
 Business performance management (BPM) allows
monitoring, measuring, and comparing key
performance indicators
 User interface (e.g., dashboards) allows access and
easy manipulation of other BI components
 A High-Level Architecture of BI
41
 Styles of BI
42

 MicroStrategy, Corp. distinguishes five styles of

BI and offers tools for each
1. report delivery and alerting
2. enterprise reporting (using dashboards and
scorecards)
3. cube analysis (also known as slice-and-dice
analysis)
4. ad-hoc queries
5. statistics and data mining
 The Benefits of BI
43

 The ability to provide accurate information when

needed, including a real-time view of the corporate
performance and its parts
 A survey by Thompson (2004) highlights the
following benefits:
 Faster, more accurate reporting (81%)
 Improved decision making (78%)
 Improved customer service (56%)
 Increased revenue (49%)
 The Benefits of BI
44

 Faster, more accurate reporting

 Automating data collection and aggregation
 Automating report generation
 Providing report design tools that make programming of
new reports much simpler
 Reducing training needed for developing and maintaining
reports
 The Benefits of BI
45

 Improved decision making

 Providing decision makers with rich, exact and up-to-date
information
 Letting users dive into data for further investigation
 Faster decisions
 It makes the organization more responsive to threats and
opportunities
 It shortens the time between thought and action. Most
people will lose their train of thought if they need to wait a
long time for further information about the problem they
are dealing with.
 The Benefits of BI
46

 Align the organization towards its business objectives

 The most successful organizations are those that succeed
to make every person in the organization work towards a
common goal.
 Improve Management Processes
 planning, controlling, measuring and/or changing
resulting in increased revenues and reduced costs
 Improve Operational Processes
 fraud detection, order processing, purchasing etc. resulting
in increased revenues and reduced costs
 Challenges of Building BI
47
Solutions
 Technical Issues
1. Data exists in multiple places
2. Different operating systems/database platforms
 Human Issues
1. Different kinds of workers have different data needs
2. Different workers have different level of expertise
3. Users interactivity with the data require different tools
 Business Issues
1. What data should be available and to whom and what
level.
 END OF TOPIC
48

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