BUSINESS INTELLIGENCE

UNDERSTANDING
BUSINESS INTELLIGENCE
A What is Business Intelligence?

 An umbrella term that combines architectures, tools,

databases, applications and methodologies in order to
enable interactive access to data, to enable manipulation of
data and to give business managers the ability to make
more informed and better business decisions

(Turban, 2010)
Business Intelligence Process
The architecture of Business Intelligence

A Business Intelligence system has four major components

 4 Major Components of Business Intelligence
Architecture
1. The data warehouse is a special database or repository of data
that had been prepared to support decision making applications
ranging from simple reporting to complex optimization
 4 Major Components of Business Intelligence
Architecture
2. Business analytics are the software tools that allow users to
create on-demand reports, queries and conduct analysis of data:

• Originally they appear under the name online analytical

processing (OLAP)

• 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
 4 Major Components of Business Intelligence
Architecture
3. Business performance management (BPM) based on balanced
scorecard methodology (BSC) – is a strategy performance
management tool that can be used by managers to keep track of
the execution of activities by the staff within their control and to
monitor the consequences arising from these actions (wikipedia)

The objective is to optimize overall performance of an

organization. A real-time system that alert managers to potential
opportunities, impending problems, and threats, and then
empowers them to react based on these knowledge.
BPM- Balance Scorecards
 The architecture of Business Intelligence

4. User interface allows access and easy manipulation of BI

components

Tools used to broadcast information

Data visualization provides graphical, animation, or video

presentation of data and the results of data analysis
The ability to quickly identify important trends in corporate and
market data can provide competitive advantage
http://dashboardspy.com/img/terrorism-dashboard.jpg
Relation between BI and DSS

Their architectures are very similar because BI evolved from

DSS

DSS directly support specific decision making, while BI

provides accurate and timely information, and indirectly support
decision making

BI has an executive and strategy orientation, especially in its

BPM and dashboard components, while DSS, in contrast, is
oriented toward analysts
Relation between BI and DSS

Most BI systems are constructed with commercially available

tools and components, while DSS is often built from scratch

DSS methodologies and even some tools were developed

mostly in the academic world, while BI methodologies and tools
were developed mostly by software companies

Many of the tools that BI uses are also considered DSS tools
(e.g., data mining and predictive analysis are core tools in both)

BI is a result of a continuous revolution and, as such, DSS is

one of BI's original elements
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
Assessing the value of BI

• The methodologies of assessing BI values are complex –

difficult to measure success due to many intangible benefits
• One way to present the business value of BI is to pose
business questions and show how they are answered with the
support of BI
 The Major Theory of Business Intelligence

 BI is not transaction processing, hence OLTP vs. OLAP

OLAP

OLTP
OLTP vs. OLAP

 Online Transaction Processing Systems (OLTP)

 Systems that handle a company’s routine ongoing business.

 Online transaction processing is the use of information

systems to handle a company’s routine, on-going business
activities through recording data about events that take place
in the course of business operations as they occur and using
that data in other business operations.
OLTP vs. OLAP
 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.

 Online analytical processing is the use of information

systems to analyze, with human guidance, historical data
obtained through ongoing business activities and other
sources to use as a basis for decision making.
BI Users

 There are three major types of BI users:

1. IT staff -the developers and administrators of the tools to
be used by the others.
2. Power users - people such as business analysts who have
advanced skills in the use of BI tools and use them
regularly.
3. Executives - top managers of any organization. Their
needs are typically met by tools such as dashboards,
which display measurements of critical success factors
and let users “drill down” into areas that catch their
interest.