CISB594 – Business Intelligence Understanding Business Intelligence Part II

CISB594 – Business IntelligenceCISB594 – Business Intelligence

Understanding Business Understanding Business Intelligence Part IIIntelligence Part II


ReferenceReference• Materials used in this presentation are extracted mainly from

the following texts, unless stated otherwise.


ObjectivesObjectives

At the end of this lecture, you should be able to:• Discuss intelligence creation and use of BIDiscuss intelligence creation and use of BI• Explain BI governanceExplain BI governance• Describe the major types of BI users Describe the major types of BI users • Describe major issues in implementing BIDescribe major issues in implementing BI


A The benefits of BIThe benefits of BI

• Time savings • Single version of truth • Improved strategies and plans • Improved tactical decisions• More efficient processes

The Benefits of BI

• Cost savings• Faster, more accurate reporting • Improved decision making • Improved customer service • Increased revenue

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The business values of BIThe business values of BI• The methodologies of assessing BI values are complex – 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 business values of BIThe business values of BI

• Key Issues and Framework for BI Analysis• How can enterprises maximize their BI investments?• What BI functionality do enterprises need, and what

are they using today?• What are some of the hidden costs associated with BI

initiatives?

Intelligence Creation and Use Intelligence Creation and Use

BI initiatives typically follow a similar process to that used in military intelligence

The process is cyclical with series of interrelated steps


BI GovernanceBI Governance

Governance refers to defining and implementing an infrastructure and strategy that will support the enterprise goals. “

BI governance is the process of prioritizing BI applications on the basis of costs and benefits. It builds in flexibility by creating robust processes capable of scaling to any size and scope, and all aspects related to the approach of BI efforts are clearly defined. Along with a mechanism to manage your BI strategy, BI governance provides measurements for gauging success.



BI GovernanceBI GovernanceBI Governance can be defined from three different, unique perspectives:BI Governance can be defined from three different, unique perspectives:1. As a resource rationalization exercise. This is the traditional definition of BI

Governance, a prioritization mechanism by which projects can be approved, rejected and sequenced based on specific criteria. Many companies today have some kind of process to prioritize BI requests; however most of them still rely on subjective factors to determine how a project should move forward.

Source : http://businessintelligence.com


BI GovernanceBI GovernanceBI Governance can be defined from three different, unique perspectives:BI Governance can be defined from three different, unique perspectives:2. As a series of guidelines/rules/recommendations. This is a relatively new

way of defining BI Governance. Traditionally IT has been solely responsible for defining the Architecture, Standards and Best Practices to follow in Business Intelligence, however as business starts realizing the significant impact that these decisions may have in BI Projects there has been a trend to make these topics part of the BI Governance process.



BI GovernanceBI GovernanceBI Governance can be defined from three different, unique perspectives:BI Governance can be defined from three different, unique perspectives:3. As the definition of roles and responsibilities for both IT and Business

stakeholders. As Business Intelligence projects are by nature highly complex, establishing the proper interaction and outlining areas of responsibility between and IT and the Business becomes critical for a project to succeed.



The Major Theories and The Major Theories and Characteristics of Business IntelligenceCharacteristics of Business Intelligence

• BI is not transaction processing, OLTP vs OLAP• online transaction processing systems (OLTP)

– Systems that handle a company’s 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.


Toward Competitive Toward Competitive Intelligence and AdvantageIntelligence and Advantage

• The apparent outcomes 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


• The Strategic Imperative of BI – A strategic imperative is an action that must be taken, or a

capability that must exist, if an organization is to survive and prosper. It is not optional.It is not optional.

– Companies today must change or advance strategy in order to stay on step ahead of increasing competitive pressures, hence the studies of Competitive IntelligenceCompetitive Intelligence

– BI is a strategic imperative because it enables managers to make better decisions than they could without it. If some firms in an industry or market are making better decisions and the rest are not, those that do not make better decisions will fail.



• Competitive Intelligence (CI)– Competitive intelligence is the process of obtaining as

much information as is legally and ethically possible about one’s competitors, their plans and their products; then organizing and analyzing it to provide a basis for management decision making.

– CI implies tracking what competitors are doing by gathering material on their recent and in-process activities




• Sustaining competitive advantage – A competitive advantage is anything that enables a firm to

obtain a higher level of profitability than is typical for its industry, enables a firm to obtain a higher level of profitability than is typical for its industry

– through building brand and customer loyalty using BI applications

– can arise from an organization’s possession of unique resources or competencies (Competencies can include such things as ability to innovate, quality, customer respon siveness, and more. Many such competencies can be enhanced via information provided by BI)


BI UsersBI Users

• There are five 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.


BI UsersBI Users

• There are five major types of BI users:4. Occasional information customers - knowledge worker in

the organization. Ease of use is important to them, since their use does not justify extensive training and they would in any case forget much of what they learn from one usage to the next.

5. Partners & Consumers - focused needs based on their relationship to the firm in question. Their access to information is limited for security reasons, so they are often restricted to predefined queries and reports.


Major Issues in implementing BIMajor Issues in implementing BI

• Understanding and dealing with the user community. There are likely to be many different types of users, some strategically oriented and others whose needs are more tactical. The BI team must appreciate the different classes of potential BI users.

• Planning and alignment with business strategy. BI is not just a technical exercise for the IS department.

• Organizational culture, which determines how enthusiasm for BI use can be built.

• Integration of multiple BI projects: with each other, with other organizational IS and with the IS partners.

Review QuestionsReview Questions

1. Explain the term ‘strategy gap’ from BI’s perspectives

2. Identify the steps of intelligence creation and use.

3. Explain the term BI governance

4. Compare and contrast OLTP and OLAP

5. Explain how can BI provide a competitive advantage in an industry?



Now ask if ..Now ask if ..

You are able to:• Discuss intelligence creation and use of BIDiscuss intelligence creation and use of BI• Explain BI governanceExplain BI governance• Describe the major types of BI users Describe the major types of BI users • Describe major issues in implementing BIDescribe major issues in implementing BI


Documents

CISB594 – Business Intelligence Understanding Business Intelligence Part II