Business Intelligence

Case: Toyota Motor Sales USA

Challenge: how to reduce vehicle transit cost

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

Average: $8/day, $72-80/car, 9-10days/transit

Total $144-160 million/year

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%

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?

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

Changing Business Environments

and Computerized Decision Support

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

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

Business intelligenceor BI, as insiders like to call it refers to the practice

of helping a business acquire a better understanding of itself.

More broadly, BI also refers to the skills, technologies, applications, and

practices involved in bringing that understanding to light.

The term business intelligence was first used in a 1958 article by IBM
researcher Hans Peter Luhn, who defined it as the ability to apprehend the
interrelationships of presented facts in such a way as to guide action
towards a desired goal.

BI isnt just about technologycentric concepts such as data warehousing or

business analytics; BI is really about understanding the relationships
between different aspects of your company so that you can guide the
company toward specific goals, like increasing market share and improving
customer satisfaction.

The IT industrybeing technologycentric, of courseuses the term BI as a

sort of umbrella phrase that covers all the technologies and capabilities used
to gather facts about the business, present those facts in a way that makes
relationships clearer, and allow manipulation of those facts to project what
if scenariosall intended to help guide better decision making.

Business Goals for BI

The ability to view data from multiple sources in a single view, such as
seeing sales information correlated with shipping expenses and facility utility
bills

The ability to quickly see summaries of data from different places such as
the total payroll spent, along with the total sales, for a given time period

The ability to see data over time, comparing data from yesterday, last month,
the past three quarters of the past 5 years, to see how things have changed
over time

The ability to ask what if questions and have answers generated based on
historical data; for example, you might want to know if raising sales by 10%
for a sustained period of time will necessitate a raise in utility costs or payroll
expenses

A Framework for Business

Intelligence

A Framework for Business

Intelligence (BI)

BIs Architecture and Components

Data Warehouse

Business Analytics

Automated decision systems

Performance and Strategy

A Framework for Business

Intelligence (BI)

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
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
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

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

The Different Users of BI

There are many different users who can benefit from business intelligence:

15

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

Main BI Topics

16

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.

16

Intelligence Creation and Use, and BI

Governance

Business Intelligence
BI Applications:
- Data warehousing
-Data mining
- BPM
- OLAP
- etc.

Data

Business
Analytics
Executives
Managers
Operators

BI Users

Data

Business
Environment

Decisions

Business Scorecards

19

Business Scorecards
Purpose
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
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

20

The Contents of a Scorecard

21

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

Dashboards

22

Purpose

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
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

23

The Contents of a Dashboard

24

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

Reports

25

The Purpose of Reports

Reports

allow a much broader audience to benefit from the data in a BI

solution
Reports

Reports

may be static, requiring no training

Reports may also allow a limited amount of interactivity

can be presented in a variety of formats, allowing for easier

distribution

26

Custom Application Integration

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

27

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

Analytic Applications

28

The Purpose of Analytic Applications

29

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
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

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

ISQS 3358 Business Intelligence

30

What are the real differences between

Reporting, Analysis, and Visualization?

Reports can address a variety of business needs, can be personalized and targeted,
and can be easily distributed via many means. They can be adapted to run from
different data sources as well, making them very flexible.
Dashboards translate complex information into highimpact, ataglance
displays. Theyre more intuitive than reports, and help keep decision makers
aligned with organizational goals. Dashboards help you spot problems more
quickly, making them good dailyuse tools.
Scorecards also deliver ataglance information but show how well youre doing
compared with specific targets. Theyre good for communicating strategy and
progress, and can help increase accountability.
Analysis lets you explore information from across the business, and helps you dig
deeper to discover the why behind what youre seeing on a report, dashboard, or
scorecard. You can move through summary information to deeperlevel
information, and model whatif scenarios to help find the right action for
improvement.

Successful BI Implementation

Appropriate Planning and Alignment with the Business Strategy

Planning and execution components

Business

Organization

Functionality

Infrastructure

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

BI Product Providers

Microsoft
SAS
IBM
Oracle
SyBase
Business Objects

BI Tools Survey

33

List of BI tools

34

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.
7.

BizzScore Suite
WebFocus

7.2
7

EFM Software
Information Builders

8.

Excel, Performance Point,

Analysis Server

2007/2005

Microsoft

9.
10.
11.
12.
13.

QlikView
Microstrategy
Hyperion System
Actuate
Cognos Series 8

8
8
9
9.1
8.3

QlikTech
Microstrategy
Hyperion (now Oracle)
Actuate
Cognos (now IBM)

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

SQL Server 2005 Editions

35

Microsoft SQL Server 2000

Microsoft SQL Server 2005
Microsoft SQL Server 2008
SQL Server Express
SQL Server Workgroup
SQL Server Developer
SQL Server Standard
SQL Server Enterprise
SQL Server Compact

Intelligence Creation and Use and BI

Governance

BI Governance
The project prioritization process within organizations

A typical set of issues for the BI governance team is to address

1.
Creating categories of projects (investment, business opportunity,
strategic, mandatory, etc.)
2.
Defining criteria for project selection
3.
Determining and setting a framework for managing project risk
4.
Managing and leveraging project interdependencies
5.
Continually monitoring and adjusting the composition of the portfolio

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 processes

Business environment

Competitors

Stakeholders

Other sources of potentially

valuable information

In order to be useful in decision making and improving the

bottom line, the data must be:
Cataloged

Sorted

Tagged

Filtered

Analyzed

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

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

Conclusion: BI - 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)

References

DeHenry, F., Assessing Business Intelligence Readness in Your

Organization, FMT Systems Inc., 2005
Dresner, H., Why enterprises must make business intelligence an
imperative, 2001, http://www.gartnergroup.com.
Hurbean,I , Tehnologia Business Intelligence n managementul strategic al
firmei, 2006, www.business-intelligence.ro
Jones, D, The Shortcut Guide To Achieving Business Intelligence in Midsize
Companies, 2009, Realtime publishers
Zhangxi, L., Anatomy of Business Intelligence, Texas Tech University
Thompson, O., BI Approaches of Enterprise Software Vendors, 2004,
http://www.technologyevaluation.com.
Vitt, E., Business Intelligence: Making better decisions faster, 2002.
Microsoft Press.