chapter 12 business intelligence. chapter outline 12.1 managers and decision making 12.2 what is...
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CHAPTER 12
Business Intelligence
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CHAPTER OUTLINE
12.1 Managers and Decision Making
12.2 What Is Business Intelligence?
12.3 Business Intelligence Applications for Data Analysis
12.4 Business Intelligence Applications for Presenting Results
12.5 Business Intelligence in Action: Corporate Performance Management
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LEARNING OBJECTIVES
1. Identify the phases in the decision-making process, and use a decision-support framework to demonstrate how technology supports managerial decision making.
2. Describe and provide examples of the three different ways in which organizations use business intelligence.
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LEARNING OBJECTIVES (continued)
3. Specify the BI applications available to users for data analysis, and provide examples of how each might be used to solve a business problem at your university.
4. Describe three BI applications that present the results of data analyses to users, and offer examples of how businesses and government agencies can use each of these technologies.
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LEARNING OBJECTIVES (continued)
5. Describe corporate performance management, and provide an example of how your university could use CPM.
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Chapter Opening Case: Quality Assurance at Daimler AG
Source: Alperium/Shutterstock
A core value of Daimler is complete customer satisfaction.
Although the text remarks that the “obvious solution” is a data warehouse, understand that such technology was not available in the 1980s when Daimler was struggling to have its separate databases interact with each other
Integration of information, especially when some of it originates beyond the boundary of the firm, requires (1) inexpensive computing power, (2) inexpensive and powerful networks, and (3) knowledgeable personnel to use the technology.
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The Rise of Spreadsheets
Spreadsheets (especially Excel) have become much more powerful – consider your Excel cases earlier in the semester
Spreadsheets can import data from databases
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The Manager’s Job and Decision Making
Managers have three basic roles
(Mintzberg 1973)
Interpersonal roles – leader and/or liaison
Informational roles – monitor or spokesperson
Decisional roles – allocate, negotiate, mediate
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The Manager’s Job & Decision Making (continued)
Decisions and Decision making
Source: Image Source Limited
Choosing among
alternatives
Intelligence, design, choice
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Decision Making Process
A lot more involved than simply saying “I want
that one”
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Why Managers Need IT Support
The number of alternatives to be considered constantly increases.
Decisions must be made under time pressure.
Decisions are more complex. Decision makers can be in different
locations and so is the information.
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A Framework for Computerized Decision Analysis
Routine & repetitive decisions
Lacks any standard procedure for solution
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Problem Structure
The first dimension deals with the problem structure, where the decision making processes fall along the continuum ranging from highly structured to highly unstructured decisions.
Highly structured
Semistructured Higly unstructured
Order entry Loan approval Building new plant
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The Nature of Decisions
The second dimension of decision support deals with the nature of decisions
Operational control – execution of tasks
Management control – determining tasks required to achieve a goal
Strategic planning – determining goals
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12.2 What Is Business Intelligence?
Source: Angela Waye/Shutterstoc
Isn’t it odd that it is defined half way into the chapter?
applications and technologies for consolidating, analyzing, and providing access to vast amounts of data to help
users make better business and strategic decisions
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The Scope of Business Intelligence
Smaller organizations:Excel spreadsheets
Larger organizations:Data mining, predictive analytics, dashboards
Source: Dundas Software, www.dundas.com/ dashboard/online-examples/screenshots/Marketing-Dashboard.aspx
The difference in sophistication is generally related to the abilities of staff in the organization
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How Organizations Use BI
Develop few, related BI applications
Data mart
Develop infrastructure to support enterprisewide BI
Enterprise data warehouse
Support organizational transformation
Enterprise data warehouse
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12.3 Business Intelligence Applications for Data Analysis
Multidimensional Analysis or Online Analytical Processing (OLAP)
Data Mining
Decision Support Systems© Toh Kheng Ho/Age Fotostock America, Inc.
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Data Mining
Source: Corbis/Image Source Limited
The process of searching for valuable information in a large database, data warehouse, or data mart.
Data mining performs two basic operations:
(1) Predicting trends and behaviors(2) Identifying previously unknown patterns and relationships
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How Business Intelligence Works
© Aydin/Age Fotostock America, Inc.
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Decision Support Systems (DSS)
DSS capabilities (semi-structured or unstructured problems)
Sensitivity analysis
What-if analysis
Goal-seeking analysis
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12.4 Business Intelligence Applications for Presenting Results
Dashboards
Data Visualization TechnologiesGeographic Information Systems
Real-Time BI
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Digital Dashboard (example)
Source: MicroStrategy
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Digital Dashboard (example)
Source: Dundas Software, www.dundas.com/ dashboard/online-examples/screenshots/Marketing-Dashboard.aspx
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Digital Dashboard Demo
http://www.informationbuilders.com/rfr/qtdemo/AdvVis_ExecDash/AdvVis_ExecDash.html
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A Bloomberg Terminal
Source: Carlos Osario/Zuma Press
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Management Cockpit
Source: The Management Cockpit is a registered trademark of SAP,created by Professor M.Georges.
May be called a “situation room” when used to address an imminent or
emerging issue
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Data Visualization Systems
Even though a picture is “worth a thousand words,” we have to be very careful about just what we are seeing.
Remember, on the Internet, it is
“user beware!”
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Your Brain Can Understand Images That You Cannot Communicate In Language Describe the color blue Describe a sneeze
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Example of data visualization
Hans Rosling at the TED Talks
Watch this video, understand how visualization creates
understanding
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GISMO
GISMO is a geographic information system developed for the city of Corvallis, Oregon.
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12.5 Business Intelligence in Action: Corporate Performance Management
FIGURE 12.7 1-8000 CONTACTS customer service agent dashboard.
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Chapter Closing Case
• The Business Problem
• The IT Solutions
• The Results