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CH1_An_Overview_of_Business_Intelligence.pptx
1.
© Pearson Education
Limited 2014 1-1 Chapter 1: An Overview of Business Intelligence, Analytics, and Decision Support Data Analytics & Intelligence
2.
© Pearson Education
Limited 2014 1-2 Learning Objectives Understand today’s turbulent business environment and describe how organizations survive and even excel in such an environment (solving problems and exploiting opportunities) Understand the need for computerized support of managerial decision making Understand an early framework for managerial decision making ... (Continued…)
3.
© Pearson Education
Limited 2014 1-3 Learning Objectives Learn the conceptual foundations of the DSS methodology Describe the BI methodology and concepts and relate them to DSS Understand the various types of analytics List the major tools of computerized decision support
4.
© Pearson Education
Limited 2014 1-4 Changing Business Environment & Computerized Decision Support Companies are moving aggressively to computerized support of their operations Business Intelligence Business Pressures–Responses–Support Model Business pressures result of today's competitive business climate Responses to counter the pressures Support to better facilitate the process
5.
© Pearson Education
Limited 2014 1-5 Business Pressures–Responses– Support Model
6.
© Pearson Education
Limited 2014 1-6 The Business Environment The environment in which organizations operate today is becoming more and more complex, creating opportunities, and problems. Example: globalization. Business environment factors: markets, consumer demands, technology, and societal…
7.
© Pearson Education
Limited 2014 1-7 Business Environment Factors FACTOR DESCRIPTION Markets Strong competition Expanding global markets Blooming electronic markets on the Internet Innovative marketing methods Opportunities for outsourcing with IT support Need for real-time, on-demand transactions Consumer Desire for customization demand Desire for quality, diversity of products, and speed of delivery Customers getting powerful and less loyal Technology More innovations, new products, and new services Increasing obsolescence rate Increasing information overload Social networking, Web 2.0 and beyond Societal Growing government regulations and deregulation Workforce more diversified, older, and composed of more women Prime concerns of homeland security and terrorist attacks Necessity of Sarbanes-Oxley Act and other reporting-related legislation Increasing social responsibility of companies Greater emphasis on sustainability
8.
© Pearson Education
Limited 2014 1-8 Organizational Responses Be Reactive, Anticipative, Adaptive, and Proactive Managers may take actions, such as Employ strategic planning. Use new and innovative business models. Restructure business processes. Participate in business alliances. Improve corporate information systems. … more [in your book]
9.
© Pearson Education
Limited 2014 1-9 Closing the Strategy Gap One of the major objectives of computerized decision support 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 to achieve them.
10.
© Pearson Education
Limited 2014 1-10 Managerial Decision Making Management is a process by which organizational goals are achieved by using resources. Inputs: resources Output: attainment of goals Measure of success: outputs / inputs Management Decision Making Decision making: selecting the best solution from two or more alternatives
11.
© Pearson Education
Limited 2014 1-11 The Nature of Managers’ Work Mintzberg's 10 Managerial Roles Interpersonal 1. Figurehead 2. Leader 3. Liaison Informational 4. Monitor 5. Disseminator 6. Spokesperson Decisional 7. Entrepreneur 8. Disturbance handler 9. Resource allocator 10. Negotiator
12.
© Pearson Education
Limited 2014 1-12 Decision-Making Process Managers usually make decisions by following a four-step process (a.k.a. the scientific approach) 1. Define the problem (or opportunity) 2. Construct a model that describes the real- world problem. 3. Identify possible solutions to the modeled problem and evaluate the solutions. 4. Compare, choose, and recommend a potential solution to the problem.
13.
© Pearson Education
Limited 2014 1-13 Information Systems Support for Decision Making Group communication and collaboration Improved data management Managing data warehouses and Big Data Analytical support Overcoming cognitive limits in processing and storing information Knowledge management Anywhere, anytime support
14.
© Pearson Education
Limited 2014 1-14 An Early Decision Support Framework (by Gory and Scott-Morten, 1971)
15.
© Pearson Education
Limited 2014 1-15 An Early Decision Support Framework Degree of Structuredness (Simon, 1977) Decisions are classified as Highly structured (a.k.a. programmed) Semi-structured Highly unstructured (i.e., nonprogrammed) Types of Control (Anthony, 1965) Strategic planning (top-level, long-range) Management control (tactical planning) Operational control
16.
© Pearson Education
Limited 2014 1-16 The Concept of DSS DSS - interactive computer-based systems, which help decision makers utilize data and models to solve unstructured problems (Gorry and Scott-Morton, 1971) Decision support systems couple the intellectual resources of individuals with the capabilities of the computer to improve the quality of decisions. DS as an Umbrella Term Evolution of DS into Business Intelligence
17.
© Pearson Education
Limited 2014 1-17 A Framework for Business Intelligence (BI) BI is an evolution of decision support concepts over time Then: Executive Information System Now: Everybody’s Information System (BI) BI systems are enhanced with additional visualizations, alerts, and performance measurement capabilities The term BI emerged from industry
18.
© Pearson Education
Limited 2014 1-18 Definition of BI BI is an umbrella term that combines architectures, tools, databases, analytical tools, applications, and methodologies BI is a content-free expression, so it means different things to different people BI's major objective is to enable easy access to data (and models) to provide business managers with the ability to conduct analysis BI helps transform data, to information (and knowledge), to decisions, and finally to action
19.
© Pearson Education
Limited 2014 1-19 A Brief History of BI The term BI was coined by the Gartner Group in the mid-1990s However, the concept is much older 1970s - MIS reporting - static/periodic reports 1980s - Executive Information Systems (EIS) 1990s - OLAP, dynamic, multidimensional, ad-hoc reporting -> coining of the term “BI” 2010s - Inclusion of AI and Data/Text Mining capabilities; Web-based Portals/Dashboards, Big Data, Social Media, Analytics 2020s - yet to be seen
20.
© Pearson Education
Limited 2014 1-20 The Evolution of BI Capabilities
21.
© Pearson Education
Limited 2014 1-21 The Architecture of BI A BI system has four major components a data warehouse, with its source data business analytics, a collection of tools for manipulating, mining, and analyzing the data in the data warehouse business performance management (BPM) for monitoring and analyzing performance a user interface (e.g., dashboard)
22.
© Pearson Education
Limited 2014 1-22 A High-Level Architecture of BI Data Warehouse Technical staff Data Warehouse Environment Data Sources Business Analytics Environment Performance and Strategy Business users Managers / executives Built the data warehouse Access Manipulation Results BPM strategy ü Organizing ü Summarizing ü Standardizing Future component intelligent systems User Interface - browser - portal - dashboard
23.
© Pearson Education
Limited 2014 1-23 Business Value of BI Analytical Applications Customer segmentation Propensity to buy Customer profitability Fraud detection Customer attrition Channel optimization
24.
© Pearson Education
Limited 2014 1-24 Application Case 1.1 Sabre Helps Its Clients Through Dashboards and Analytics Questions for Discussion 1. What is traditional reporting? How is it used in the organization? 2. How can analytics be used to transform the traditional reporting? 3. How can interactive reporting assist organizations in decision making?
25.
© Pearson Education
Limited 2014 1-25 A Multimedia Exercise in Business Intelligence Teradata University Network (TUN) www.teradatauniversitynetwork.com BSI Videos (Business Scenario Investigations) www.youtube.com/watch?v=NXEL5F4_aKA Also look for other BSI Videos at TUN
26.
© Pearson Education
Limited 2014 1-26 DSS-BI Connections Similarities and differences? Similar architectures, data focus, … Direct vs. indirect support Different target audiences Commercially available systems versus in- house development of solutions Origination – Industry vs. Academia So, is DSS = BI ?
27.
© Pearson Education
Limited 2014 1-27 Analytics Overview Analytics? Something new or just a new name for … A Simple Taxonomy of Analytics (proposed by INFORMS) Descriptive Analytics Predictive Analytics Prescriptive Analytics Analytics or Data Science?
28.
© Pearson Education
Limited 2014 1-28 Analytics Overview
29.
© Pearson Education
Limited 2014 1-29 Application Case 1.2 Eliminating Inefficiencies at Seattle Children’s Hospital Questions for Discussion 1. Who are the users of the tool? 2. What is a dashboard? 3. How does visualization help in decision making? 4. What are the significant results achieved by the use of Tableau?
30.
© Pearson Education
Limited 2014 1-30 Application Case 1.3 Analysis at the Speed of Thought Questions for Discussion 1. What are the desired functionalities of a reporting tool? 2. What advantages were derived by using a reporting tool in the case?
31.
© Pearson Education
Limited 2014 1-31 Application Case 1.4 Moneyball: Analytics in Sports and Movies Questions for Discussion 1. How is predictive analytics applied in Moneyball? 2. What is the difference between objective and subjective approaches in decision making?
32.
© Pearson Education
Limited 2014 1-32 Application Case 1.5 Analyzing Athletic Injuries Questions for Discussion 1. What types of analytics are applied in the injury analysis? 2. How do visualizations aid in understanding the data and delivering insights into the data? 3. What is a classification problem? 4. What can be derived by performing sequence analysis?
33.
© Pearson Education
Limited 2014 1-33 Application Case 1.6 Industrial and Commercial Bank of China (ICBC) Employs Models to Reconfigure Its Branch Networks Questions for Discussion 1. How can analytical techniques help organizations to retain competitive advantage? 2. How can descriptive and predictive analytics help in pursuing prescriptive analytics? 3. What kind of prescriptive analytic techniques are employed in the case study? 4. Are the prescriptive models once built good forever?
34.
© Pearson Education
Limited 2014 1-34 End-of-Chapter Application Case Nationwide Insurance Used BI to Enhance Customer Service Questions for Discussion 1. Why did Nationwide need an enterprise-wide data warehouse? 2. How did integrated data drive the business value? 3. What forms of analytics are employed at Nationwide? 4. With integrated data available in an enterprise data warehouse, what other applications could Nationwide potentially develop?
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