ISQS 3358, Business Intelligence Anatomy of Business Intelligence

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ISQS 3358, Business IntelligenceAnatomy of
Business Intelligence

• Zhangxi Lin
• Texas Tech University

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Learning Objectives

• Understand todays turbulent business environment
  and describe how organizations survive and even
  excel in such an environment (solving problems
  and exploiting opportunities)
• Understand the need for computerized support of
  managerial decision making
• Describe the business intelligence (BI)
  methodology and concepts and relate them to DSS
• Understand the major issues in implementing
  business intelligence
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Case Toyota Motor Sales USA

• Challenge how to reduce vehicle transit cost
• Average 8/day, 72-80/car, 9-10days/transit
• Total 144-160 million/year
• Problem
• Inability to deliver cars to dealers timely
• Computers generated tons of directionless reports
  and data with little help
• Unable to make timely decisions
• Solution Data warehouse
• Use right technologies provided by a right vendor
  following correct concepts Oracles data
  warehouse Hyperions BI platform
• Lesson learned data cleansing is important
• Results
• Discovered that the company was billed twice in
  some occasions
• Increase the volume of cars by 40 between
  2001-2005
• In-transit time was reduced 5
• Market share increased
• According to IDC Inc. the return on the BI
  investment was 506

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Changing Business Environments and Computerized
Decision Support

• The Business Pressures-Responses-Support Model
• The business environment
• Organizational responses be reactive,
  anticipative, adaptive, and proactive
• Computerized support
• Closing the Strategy Gap One of the major
  objectives of BI is to facilitate closing the gap
  between the current performance of an
  organization and its desired performance as
  expressed in its mission, objectives, and goals
  and the strategy for achieving them

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Changing Business Environments and Computerized
Decision Support
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A Framework for Business Intelligence (BI)

• Business intelligence (BI)
• A conceptual framework for decision support. It
  combines architecture, databases (or data
  warehouse), analytical tools and applications

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A Framework for Business Intelligence
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A Framework for Business Intelligence (BI)

• The Origins and Drivers of Business Intelligence
• Organizations are being compelled to capture,
  understand, and harness their data to support
  decision making in order to improve business
  operations
• Managers need the right information at the right
  time and in the right place

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A Framework for Business Intelligence (BI)

• BIs Architecture and Components
• Data Warehouse
• Business Analytics
• Automated decision systems
• Performance and Strategy

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A Framework for Business Intelligence (BI)
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A Framework for Business Intelligence (BI)

• BIs Architecture and Components
• Data Mining
• A class of information analysis based on
  databases that looks for hidden patterns in a
  collection of data which can be used to predict
  future behavior

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A Framework for Business Intelligence (BI)

• BIs Architecture and Components
• business (or corporate) performance management
  (BPM)
• A component of BI based on the balanced
  scorecard methodology, which is a framework for
  defining, implementing, and managing an
  enterprises business strategy by linking
  objectives with factual measures

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A Framework for Business Intelligence (BI)

• BIs Architecture and Components
• User Interface Dashboards and Other Information
  Broadcasting Tools
• Dashboards
• A visual presentation of critical data for
  executives to view. It allows executives to see
  hot spots in seconds and explore the situation

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A Framework for Business Intelligence (BI)

• The Benefits of BI

• Time savings
• Single version of truth
• Improved strategies and plans
• Improved tactical decisions
• More efficient processes
• Cost savings

• Faster, more accurate reporting
• Improved decision making
• Improved customer service
• Increased revenue

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A Framework for Business Intelligence (BI)

• The Business Value of BI
• How BI Can Help
• Assess their readiness for meeting the challenges
  posed by these new business realities
• Take a holistic approach to BI functionality
• Leverage best practices and anticipate hidden
  costs
• Key Issues 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?

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Main BI Topics

• Data warehousing Making historical data
  available for analytics
• Data preparation Extraction, transformation and
  loading
• Query - a collection of specifications that
  enables you to focus on a particular set of data.
• Online Analytical Processing (OLAP) - a
  capability of information systems that supports
  interactive examination of large amounts of data
  from many perspectives.
• Reporting - generates aggregated views of data to
  keep the management informed about the state of
  their business.
• Data mining - extraction of knowledge by
  utilizing software that can isolate and identify
  previously unknown patterns or trends in large
  amounts of data.

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ISQS 3358 Business Intelligence
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Intelligence Creation and Use, and BI Governance
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Business Intelligence
Business Analytics

• BI Applications
• Data warehousing
• Data mining
• BPM
• OLAP
• etc.

Executives Managers Operators
Data
BI Users
Business Environment
Decisions
Data
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Intelligence Creation and Use and BI Governance

• BI Governance
• The project prioritization process within
  organizations

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Intelligence Creation and Use and BI Governance

• A typical set of issues for the BI governance
  team is to address
• Creating categories of projects (investment,
  business opportunity, strategic, mandatory, etc.)
• Defining criteria for project selection
• Determining and setting a framework for managing
  project risk
• Managing and leveraging project interdependencies
  
• Continually monitoring and adjusting the
  composition of the portfolio

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Intelligence Creation and Use and BI Governance

• Intelligence Gathering
• How modern companies ethically and legally
  organize themselves to glean as much information
  as they can from their
• Customers
• Business environment
• Stakeholders
• Business processes
• Competitors
• Other sources of potentially valuable information

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Intelligence Creation and Use and BI Governance

• Intelligence Gathering
• In order to be useful in decision making and
  improving the bottom line, the data must be
• Cataloged
• Tagged
• Analyzed
• Sorted
• Filtered

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Case AOL search data scandal (2006)

• AOL
• On August 4, 2006, AOL Research released a
  compressed text file on one of its websites
  containing twenty million search keywords for
  over 650,000 users over a 3-month period,
  intended for research purposes, which was posted
  only three days before pulled down.
• While none of the records on the file are
  personally identifiable, the New York Times was
  able to locate an individual from the released
  and anonymized search records by cross
  referencing them with phonebooks or other public
  records.
• Questions
• Is it ethically fine to collect data about the
  rivals?
• How to protect the confident data from the
  espionage of competing counterparts?

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BI Product Providers

• Microsoft
• SAS
• IBM
• Oracle
• SyBase
• Business Objects
• BI Tools Survey

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List of BI tools
No. Tool Version Vendor
1. Oracle Enterprise BI Server 7.8 Oracle
2. Business Objects Enterprise XI r2 Business Objects (now SAP)
3. SAP NetWeaver BI 7.0 SAP
4. SAS Enterprise BI Server 9.1.3 SAS Institute
5. TM/1 Executive Viewer 9.1 Applix (now IBM)
6. BizzScore Suite 7.2 EFM Software
7. WebFocus 7 Information Builders
8. Excel, Performance Point, Analysis Server 2007/2005 Microsoft
9. QlikView 8 QlikTech
10. Microstrategy 8 Microstrategy
11. Hyperion System 9 Hyperion (now Oracle)
12. Actuate 9.1 Actuate
13. Cognos Series 8 8.3 Cognos (now IBM)
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Microsoft SQL Server

• SQL Server is a client-server based, relational
  database engine. That puts it head-to-head with
  the likes of IBMs DB2 and Oracles Oracle or so
  Microsoft dearly wants us to believe.
• The problem is that, while DB2 and Oracle are
  unquestionably enterprise-level products, SQL
  Server has for years been dogged by the suspicion
  that it cant really cut the mustard.
• SQL Server Products
• Microsoft SQL Server 2000
• Microsoft SQL Server 2005
• Microsoft SQL Server 2008
• SQL Server 2005 Editions
• SQL Server ExpressSQL Server WorkgroupSQL
  Server DeveloperSQL Server StandardSQL Server
  EnterpriseSQL Server Compact

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The Major Theories and Characteristics of
Business Intelligence

• Some Theories of BI
• A factory and warehouse
• The information factory
• Data warehousing and business intelligence
• Teradata advanced analytics methodology
• Oracle BI system

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The Major Theories and Characteristics of
Business Intelligence
The Corporate Information Factory
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The Major Theories and Characteristics of
Business Intelligence
Teredata Advanced Analytics Methodology
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The Major Theories and Characteristics of
Business Intelligence
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Toward Competitive Intelligence and Advantage

• Competitive Intelligence (CI)
• CI implies tracking what competitors are doing by
  gathering material on their recent and in-process
  activities
• Competitive strategy in an industry
• low-cost leader
• market niche
• Sustaining competitive advantage through building
  brand and customer loyalty using BI applications
• Case MSIs Netbook (http//en.wikipedia.org/wiki/
  Netbook)

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Toward Competitive Intelligence and Advantage

• The Strategic Imperative 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

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The Different Users of Business Intelligence

• There are many different users who can benefit
  from business intelligence
• Executives Those who focus on the overall
  business
• Business Decision Makers Usually focused on
  single areas of the business (finance, HR,
  manufacturing, and so forth)
• Information Workers Typically managers or staff
  working in the back office
• Line Workers Employees who might use BI without
  knowing it
• Analysts Employees who will perform extensive
  data analysis

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Business Scorecards
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The Purpose of a Scorecard

• A scorecard should give an executive a visual
  representation of the health of an organization
  in a single glance
• The scorecard is of sufficiently high level to
  represent major business operations and their
  goals
• The data in a scorecard should be as recent as
  possible to make them more actionable

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Benefits to the Executive

• In a single glance, the executive can see a wide
  swath of the business (finance, manufacturing,
  sales, marketing, and more)
• Immediate value is gained without the need for
  the executive to perform analysis
• Executives see not just actual values, but
  comparisons to plans or prior results

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The Contents of a Scorecard

• Scorecards usually contain some or all of the
  following elements
• Key Performance Indicators (KPIs)
• KPI actual values compared to historical values
  (for trend analysis)
• KPI actual values compared to a forecast or
  budget amount
• Rankings of different departments, locations,
  products, and so forth

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Dashboards
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The Purpose of a Dashboard

• A dashboard is designed to allow decision makers
  to see a variety of data that affects their
  divisions or departments
• This data may be in the form of scorecards,
  charts, tables, and so forth
• The dashboard is generally customized for each
  user
• More targeted and detailed than a scorecard

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Benefits to Decision Makers

• Decision makers see a variety of information
  targeted to their department
• This allows decision makers to focus only on the
  items over which they have control
• Information is more detailed than that of a
  scorecard
• The tools in the dashboard often have better
  analytic capabilities than a scorecard

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The Contents of a Dashboard

• A Dashboard generally contains a variety of
  different views of data
• The data is generally KPIs and shows trends,
  breakdowns, and comparisons against a forecast or
  historical data
• The dashboard often consists of charts and
  tables, and may include scorecard elements as well

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Reports
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The Purpose of Reports

• Reports allow a much broader audience to benefit
  from the data in a BI solution
• Reports may be static, requiring no training
• Reports may also allow a limited amount of
  interactivity
• Reports can be presented in a variety of formats,
  allowing for easier distribution

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The Purpose of Custom Application Integration

• An application used by line workers may include
  business intelligence without the worker
  realizing what is happening
• A sales clerk may get a list of targeted
  recommendations to make based on what the
  customer is buying
• A loan officer may be presented with the level of
  risk associated with granting a loan to a
  particular customer

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The Contents of Custom Application Integration

• Custom applications may include predictive output
  from data mining models
• Custom applications can show history and trends
  for the current customer, supplier, and so forth
• Custom applications may allow easy ways for users
  to explore the data for relationships

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Analytic Applications
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The Purpose of Analytic Applications

• Analytic applications free analysts from building
  complex models and writing complex queries
• Analysts are free to focus on the data and
  discover relationships and drivers behind numbers
• Rich visualizations allow much easier
  understanding of trends and relationships

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The Contents of Analytic Applications

• Analytic applications typically have no limits
  analysts can see everything
• Analytic applications can view and analyze all of
  an organizations data in a number of ways
• Analytic applications are powerful, but not as
  easy to use as other mechanisms

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OLTP vs. OLAP

• Online transaction processing systems (OLTP)
• Systems that handle a companys routine ongoing
  business
• Online analytic processing (OLAP)
• An information system that enables the user,
  while at a PC, to query the system, conduct an
  analysis, and so on. The result is generated in
  seconds

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ISQS 3358 Business Intelligence
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Successful Business Intelligence Implementation

• Appropriate Planning and Alignment with the
  Business Strategy
• Establish a BI Competency Center (BICC) within
  the Company
• Real-time, On-Demand BI Is Attainable
• Developing or Acquiring BI Systems
• Justification and Cost/Benefit Analysis
• Security and Protection of Privacy
• Integration of Systems and Applications

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Conclusion Business Intelligence Today and
Tomorrow

• Todays organizations are deriving more value
  from BI by extending actionable information to
  many types of employees, maximizing the use of
  existing data assets
• Visualization tools including dashboards are used
  by producers, retailers, governments, and special
  agencies
• More and more industry-specific analytical tools
  will flood the market to perform almost any kind
  of analysis and to facilitate informed decision
  making from the top level to the user level
• A potential trend involving BI is its possible
  merger with artificial intelligence (AI)

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Application Cases in the Book

• Case 1.1 Intelligence Price Setting Using
  Automated Decision Support
• http//www.longs.com
• Using Price-optimization programs by SAS
• Case 1.2 - Predictive Analytics Helps Texas
  Collect Taxes
• Using data mining software from SPSS
• Case 1.3 - France Telecom Business Intelligence
• Business Intelligence Competence Center
• http//www.intelligentsolutions.com
• http//www.dmreview.com