chapter 1: an overview of business intelligence, analytics, and decision support business...
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Chapter 1:Chapter 1:An Overview of Business Intelligence, Analytics, and Decision Support
Business Intelligence: Business Intelligence: A Managerial Perspective on A Managerial Perspective on
Analytics (3Analytics (3rdrd Edition) Edition)
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Learning ObjectivesLearning Objectives Understand today's 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
Understand the various types of analytics
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Opening Vignette…Opening Vignette…
Magpie Sensing Employs Analytics to Magpie Sensing Employs Analytics to Manage a Vaccine Supply Chain Manage a Vaccine Supply Chain Effectively and SafelyEffectively and Safely
Company background Problem Proposed solution and results Answer & discuss the case questions
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Opening Vignette…Opening Vignette…
Questions for the Opening Vignette1.What information is provided by the descriptive analytics employed at Magpie Sensing?
2.What type of support is provided by the predictive analytics employed at Magpie Sensing?
3.How does prescriptive analytics help in business decision making?
4.In what ways can actionable information be reported in real time to concerned users of the system?
5.In what other situations might real-time monitoring applications be needed?
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Changing Business Environment & Changing Business Environment & Computerized Decision SupportComputerized Decision Support Companies are moving aggressively
to computerized support of their operations Business Intelligence
Business Pressures–Responses–Support Model Business pressures result of today's
competitive business climate Responses to counter the pressures Support to better facilitate the process
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Business Pressures–Responses–Business Pressures–Responses–Support ModelSupport Model
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The Business Environment The Business Environment The environment in which organizations
operate today is becoming more and more complex, creating opportunities, and problems. Example: globalization.
Business environment factors: markets, consumer demands, technology,
and societal…
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Business Environment FactorsBusiness Environment FactorsFACTOR DESCRIPTIONMarkets Strong competition
Expanding global marketsBlooming electronic markets on the InternetInnovative marketing methodsOpportunities for outsourcing with IT support
Need for real-time, on-demand transactionsConsumer 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 rateIncreasing information overload
Social networking, Web 2.0 and beyond
Societal Growing government regulations and deregulationWorkforce more diversified, older, and composed of more womenPrime concerns of homeland security and terrorist attacksNecessity of Sarbanes-Oxley Act and other reporting-related legislationIncreasing social responsibility of companiesGreater emphasis on sustainability
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Organizational ResponsesOrganizational Responses Be Reactive, Anticipative, Adaptive,
and Proactive Managers may take actions, such as
Employ strategic planning. Use new and innovative business models. Restructure business processes. Participate in business alliances. Improve corporate information systems. … more [in the book]
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Closing the Strategy Gap Closing the Strategy Gap One of the major objectives of
computerized decision support 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 to achieve them.
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A Framework for A Framework for Business Intelligence (BI) Business Intelligence (BI) BI is an evolution of decision support
concepts over time Then: Executive Information System Now: Everybody’s Information System (BI)
BI systems are enhanced with additional visualizations, alerts, and performance measurement capabilities
The term BI emerged from industry
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Definition of BIDefinition of BI BI is an umbrella term that combines
architectures, tools, databases, analytical tools, applications, and methodologies
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
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A Brief History of BIA Brief History of BI 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” 2010s - Data/Text/Web Mining; Web-based Portals,
Dashboards, Big Data, Social Media, and Visual Analytics 2020s - yet to be seen
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The Evolution of BI CapabilitiesThe Evolution of BI Capabilities
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The Architecture of BIThe Architecture of BI 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)
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A High-Level Architecture of BIA High-Level Architecture of BI
Data Warehouse
Technical staff
Data Warehouse Environment
DataSources
Business Analytics Environment
Performance and Strategy
Business users Managers / executivesBuilt the data warehouse Access
ManipulationResults
BPM strategyü Organizingü Summarizingü Standardizing
Future component intelligent systems
User Interface - browser - portal - dashboard
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Components in a BI ArchitectureComponents in a BI Architecture The data warehouse is the cornerstone of any
medium-to-large BI system. Originally, the data warehouse included only historical data
that was organized and summarized, so end users could easily view or manipulate it.
Today, some data warehouses include access to current data as well, so they can provide real-time decision support (for details see Chapter 2)
Business analytics are the tools that help the user transform data into knowledge (e.g., queries, data/text mining tools, etc.)
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Components in a BI Architecture Components in a BI Architecture Business Performance Management (BPM), which
is also referred to as corporate performance management (CPM), is an emerging portfolio of applications within the BI framework that provides enterprises tools they need to better manage their operations (for details see Chapter 3)
User Interface (i.e., dashboards) provide a comprehensive graphical/pictorial view of corporate performance measures, trends, and exceptions.
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Application Case 1.1Application Case 1.1Sabre Helps Its Clients Through Sabre Helps Its Clients Through Dashboards and AnalyticsDashboards and Analytics
Questions for DiscussionQuestions for Discussion§ What is traditional reporting? How is it used
in the organization?§ How can analytics be used to transform the
traditional reporting?§ How can interactive reporting assist
organizations in decision making?
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A Multimedia Exercise A Multimedia Exercise in Business Intelligencein Business Intelligence Teradata University Network (TUN) www.teradatauniversitynetwork.com
BSI Videos (Business Scenario Investigations)
www.youtube.com/watch?v=NXEL5F4_aKA
Also look for other BSI Videos at TUN
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Intelligence Creation, Use, Intelligence Creation, Use, and BI Governanceand BI Governance Data warehouse and
BI initiatives typically follow a process similar to that used in military intelligence initiatives.
Intelligence and Espionage
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Intelligence and EspionageIntelligence and Espionage Stealing corporate secrets, CIA, …
Intelligence vs. Espionage
IntelligenceThe way that the modern companies ethically and legally organize themselves to glean as much as they can from their customers, their business environment, their stakeholders, their business processes, their competitors, and other such sources of potentially valuable information
Problem – too much data, very little value Use of data/text/Web mining (see Chapters 4, 5)
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Transaction Processing VersusTransaction Processing VersusAnalytic ProcessingAnalytic Processing Transaction processing systems (OLTP) are
constantly involved in handling updates (add/edit/delete) to what we might call operational databases ATM withdrawal transaction, sales order entry via an
ecommerce site – updates DBs OLTP – handles routine on-going business ERP, SCM, CRM systems generate and store data in
OLTP systems The main goal is to have high efficiency
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Transaction Processing VersusTransaction Processing VersusAnalytic ProcessingAnalytic Processing Online analytic processing (OLAP) systems are
involved in extracting information from data stored by OLTP systems Routine sales reports by product, by region, by sales
person, by … Often built on top of a data warehouse where the data
is not transactional Main goal is the effectiveness (and then, efficiency) –
provide correct information in a timely manner More on OLAP will be covered in Chapter 2
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Successful BI ImplementationSuccessful BI Implementation Implementing and deploying a BI initiative is a
lengthy, expensive, and risky endeavor! Success of a BI system is measured by its
widespread usage for better decision making The typical BI user community includes
Not just the top executives (as was for EIS) All levels of the management hierarchy
Provide what is needed to whom he/she needs it
A successful BI system must be of benefit to the enterprise as a whole…
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BI - Alignment with Business BI - Alignment with Business StrategyStrategy To be successful, BI must be aligned with the
company’s business strategy BI cannot/should not be a technical exercise for the
information systems department
BI changes the way a company conducts business by improving business processes, and transforming decision making to a more
data/fact/information driven activity
BI should help execute the business strategy and not be an impediment for it!
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Issues for Successful BI Issues for Successful BI Developing vs. Acquiring BI systems Justifying via cost-benefit analysis
It is easier to quantify costs Harder to quantify benefits
Security and Protection of Privacy Integration of Systems and Applications
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Real-Time, On-Demand BI Is Real-Time, On-Demand BI Is AttainableAttainable The demand for “real-time” BI is growing! Is “real-time” BI attainable? Technology is getting there…
Automated, faster data collection (RFID, sensors,… )
Database and other software technologies (agent, SOA, …) technology is advancing
Telecommunication infrastructure is improving Computational power is increasing while the cost for
these technologies is decreasing
Trent -> Business Activity Management
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BI Implementation ConsiderationsBI Implementation Considerations Developing or acquiring BI systems
BI shell? In-house versus outside consultants
Justification and cost-benefit analysis Security and protection of privacy Integration of systems and applications
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Analytics OverviewAnalytics Overview Analytics?
Something new or just a new name for … A Simple Taxonomy of Analytics
Descriptive Analytics Predictive Analytics Prescriptive Analytics
Analytics or Data Science?
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Analytics OverviewAnalytics Overview
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Application Case 1.2Application Case 1.2Eliminating Inefficiencies at Seattle Eliminating Inefficiencies at Seattle Children’s HospitalChildren’s HospitalQuestions for DiscussionQuestions for Discussion1.Who are the users of the tool?2.What is a dashboard?3.How does visualization help in decision making?4.What are the significant results achieved by the use of Tableau?
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Application Case 1.3Application Case 1.3
Analysis at the Speed of ThoughtAnalysis at the Speed of Thought
Questions for DiscussionQuestions for Discussion
1.What are the desired functionalities of a reporting tool?
2.What advantages were derived by using a reporting tool in the case?
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Application Case 1.4Application Case 1.4MoneyballMoneyball: Analytics in Sports and : Analytics in Sports and MoviesMovies
Questions for DiscussionQuestions for Discussion1.How is predictive analytics applied in Moneyball?2.What is the difference between objective and subjective approaches in decision making?
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Application Case 1.5Application Case 1.5Analyzing Athletic InjuriesAnalyzing Athletic Injuries
Questions for DiscussionQuestions for Discussion1.What types of analytics are applied in the injury analysis?2.How do visualizations aid in understanding the data and delivering insights into the data?3.What is a classification problem?4.What can be derived by performing sequence analysis?
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Application Case 1.6Application Case 1.6Industrial and Commercial Bank of China Employs Industrial and Commercial Bank of China Employs Models to Reconfigure Its Branch NetworksModels to Reconfigure Its Branch Networks
Questions for DiscussionQuestions for Discussion§How can analytical techniques help organizations to retain competitive advantage?§How can descriptive and predictive analytics help in pursuing prescriptive analytics?§What kind of prescriptive analytic techniques are employed in the case study?§Are the prescriptive models once built good forever?
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Introduction to Big Data AnalyticsIntroduction to Big Data Analytics Big Data?
Not just big! Volume Variety Velocity
More on big data and related analytics tools and techniques are covered in Chapter 6.
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Application Case 1.7Application Case 1.7
Gilt Groupe’s Flash Sales Streamlined Gilt Groupe’s Flash Sales Streamlined by Big Data Analyticsby Big Data Analytics
Questions for DiscussionQuestions for Discussion
1.What makes this case study an example of Big Data analytics?
2.What types of decisions does Gilt Groupe have to make?
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End-of-Chapter Application CaseEnd-of-Chapter Application CaseNationwide Insurance Used BI to Nationwide Insurance Used BI to Enhance Customer ServiceEnhance Customer Service
Questions for DiscussionQuestions for Discussion§Why did Nationwide need an enterprise-wide data warehouse?§How did integrated data drive the business value?§What forms of analytics are employed at Nationwide?§With integrated data available in an enterprise data warehouse, what other applications could Nationwide potentially develop?
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Plan of the BookPlan of the Book Introduction
Chapter 1 Data Foundations
Chapter 2 BI & Analytics
Chapters 3-6 Emerging Trends
Chapter 7
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End of the Chapter End of the Chapter
Questions / Comments…
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