Introduction to

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Business Intelligence. . Changing Business Environments . and Computerized Decision Support. The Business Pressures-Responses-Support Model . The business environment . Organizational responses: . be reactive. ID: 210669 Download Presentation

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Introduction to

Business Intelligence. . Changing Business Environments . and Computerized Decision Support. The Business Pressures-Responses-Support Model . The business environment . Organizational responses: . be reactive.

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Introduction to

Business Intelligence


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


Managerial Decision Making

Businesses are always fraught with challenges

Managers must make decisions almost on a daily basis

Many of those decisions have significant financial and organizational impact


What tools can we use to make the decisions efficiently (not waste too much time and resources) and more effective (have greater impact on the final outcome)


Decision Making Process

Nobel Laureate Herbert Simon postulated that rational decision maker goes through the following stages:


Systems Prior to BI

Decision Support Systems

Mainly model based. Supports the design part with limited support for the choice part of decision making

Statistical Tools

More data oriented. Provides data descriptions and insight into the data.

Data Mining

Specialized data analysis tools for structured data analysis

Knowledge Management

Tools for capturing and managing knowledge. Can be considered as pre-cursor to BI


Business Intelligence (BI)

Business Intelligence




conceptual framework for


integrated decision support environment


It combines architecture, databases (or data warehouse),

analytical and visual presentation tools.


success of a BI solution ultimately is determined by how well it helps both business and technical users throughout an organization meet their mission critical



The 5 Stages of Business Intelligence

BI development typically follows the 5 stages listed below:


. The Data: defining which data will be loaded into the system and analyzed.


The ETL (Extract, Transform, and Load) Engine: moving the source data to the Data Warehouse. This can be a complex step involving modifications and calculations on the data itself. If this step doesn’t work properly, the BI solution simply cannot be effective.

3. Data Warehousing: connects electronic data from different operational systems so that the data can be queried and analyzed over time for business decision making.

4. Analytic Engine: analyzes multidimensional data sets found in a data warehouse to identify trends, outliers, and patterns.

5. Presentation Layer: the dashboards, reports and alerts that present findings from the analysis.


A Framework for Business Intelligence (BI)


BI Components

Data Warehouses and Data MiningA class of information analysis based on databases that looks for hidden patterns in a collection of data which can be used to predict future behaviorBusiness (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 enterprise’s business strategy by linking objectives with factual measuresDashboardsA visual presentation of critical data for executives to view. It allows executives to see hot spots in seconds and explore the situation


Business Intelligence: A Confluence of Tools and Capabilities

The three circles of the Venn diagram each represent (previously considered) distinct areas of study and application: 1. information systems and technology, 2. statistics, and 3. OR/MS. BI can be described as a combination of : business information intelligence (BII), business statistical intelligence (BSI) and business modeling intelligence (BMI). BI must provide an integrated capabilities for decision making and those include capabilities for CollectionDescriptionPrescriptionInterpretation


BI vs. Business Analytics

Used often interchangeably in the present business environment

Analytics is more tools oriented, so it mainly refers to the technology for BI

BI is more of the umbrella term that also includes the business side of the equation

BI is more of a planning level concept and BA is more of an implementation level concept

If you think of KPI (Key Performance Indicators), BI defines them while BA measures them (roughly speaking)

Google Analytics: BI or BA?


Major BI Vendors

List obtained from:

Leading Vendors are:



Information Builders








Go to the website listed above, and then investigate the strengths and weaknesses of the BI products from each of the vendors and create a 2-4 page comparison report. Identify also the major area of thrust for each of the vendors


Challenges for BI Implementation

Multi-process, multi-users environment

The Typical BI User Community

IT staff

Power users


Functional managers

Occasional information customers




Challenges for BI Implementation

Lack of a Complete and Integrated Single Vendor Solution

Some progress are being made though with


model and In-Memory BI


Challenges for BI Implementation

Lack of integration with Organizational Strategy

BI is viewed more as a technology than an organizational process change and strategic initiative

Lack of data standardization

Rapidly growing volume of data

Rapidly changing technology

Need for specialized knowledge and training

Security and legal issues associated with information access and use


BI Governance


Governance consists of


project prioritization process within


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

Intelligence Gathering that involves how modern companies ethically and legally organize themselves to glean as much information as they can from their:


Business environment


Business processes



sources of potentially valuable


Setting processes instead of just solutions


BI Governance


Strategic, Tactical & Functional Benefits of Business Intelligence