CHAPTER 12

Business Intelligence

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

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.

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.

LEARNING OBJECTIVES (continued)

5. Describe corporate performance management, and provide an example of how your university could use CPM.

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.

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

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

The Manager’s Job & Decision Making (continued)

Decisions and Decision making

Source: Image Source Limited

Choosing among

alternatives

Intelligence, design, choice

Decision Making Process

A lot more involved than simply saying “I want

that one”

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.

A Framework for Computerized Decision Analysis

Routine & repetitive decisions

Lacks any standard procedure for solution

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

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

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

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

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

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.

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

How Business Intelligence Works

© Aydin/Age Fotostock America, Inc.

Decision Support Systems (DSS)

DSS capabilities (semi-structured or unstructured problems)

Sensitivity analysis

What-if analysis

Goal-seeking analysis

12.4 Business Intelligence Applications for Presenting Results

Dashboards

Data Visualization TechnologiesGeographic Information Systems

Real-Time BI

Digital Dashboard (example)

Source: MicroStrategy

Digital Dashboard (example)

Source: Dundas Software, www.dundas.com/ dashboard/online-examples/screenshots/Marketing-Dashboard.aspx

Digital Dashboard Demo

http://www.informationbuilders.com/rfr/qtdemo/AdvVis_ExecDash/AdvVis_ExecDash.html

A Bloomberg Terminal

Source: Carlos Osario/Zuma Press

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

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!”

Your Brain Can Understand Images That You Cannot Communicate In Language Describe the color blue Describe a sneeze

Example of data visualization

Hans Rosling at the TED Talks

Watch this video, understand how visualization creates

understanding

GISMO

GISMO is a geographic information system developed for the city of Corvallis, Oregon.

12.5 Business Intelligence in Action: Corporate Performance Management

FIGURE 12.7 1-8000 CONTACTS customer service agent dashboard.

Chapter Closing Case

• The Business Problem

• The IT Solutions

• The Results