Transcript ISYS 650 Business Intelligence

ISYS 650
Business Intelligence
David Chao
Fundamental Roles of IS in Business
Types of Information Systems
• Operations Support Systems
– Efficiently support day-to-day operations
• Management Support Systems
– Provide information and support for effective
decision making by managers
• Strategic Information Systems
– Help get a strategic advantage over customer
Operations Support Systems
• Transaction Processing Systems, TPS
– Record and process business transactions
• Any exchange of money or other benefits between two or
more parties
• Order processing, purchasing
• General ledger, accounts payable, accounts
receivable
– Large amount of data, high processing speed, high
reliability, accuracy, and security (fault tolerant)
– Data: internal, historical, detailed
Current Trend in Operations Support
Systems
• Enterprise Resources Planning ERP
– for the internal world of a company
• Customer Relationship Management CRM
– for the external world of a company.
Enterprise Resources Planning, ERP
• A company-wide, integrated, cross-functional system
used to manage and coordinate all the resources,
information, and functions of a business from shared
data bases.
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Manufacturing
Transaction processing
Supply chain management
Accounting
Human resource
• Major vendors:
– SAP, Oracle, Microsoft
Customer Relationship Management, CRM
• Front office operations:
• Direct interaction with customers, e.g. phone calls, email, online services etc.
• Call Center
• Sales Force Automation
• tracks all contact that has been made with a given
customer, the purpose of the contact, and any follow up
that might be required.
• Sales Intelligence
• Cross-selling/Up-selling/Switch-selling
• Example: SalesForce.Com
Types of Management Support Systems
• Management Information Systems (MIS)
– Reports and displays
– Example: daily sales analysis reports
• Decision Support Systems (DSS)
– Interactive and ad hoc support
– Example: a what-if analysis to determine where to spend
advertising dollars
• Executive Information Systems (EIS)
– Critical information for executives and managers
– Example: easy access to actions of competitors
Management Information Systems
• Facilitate management control by producing
summarized reports that compare actual
performance against planned performance on a
regular and recurring basis.
– Management control: Ensuring that performance
meets established standards.
• Serve middle management
• Provide reports on firm’s current performance,
based on data from TPS
Sample MIS Report
Sales Comparison
Decision support systems
• A DSS is a computerized system for helping
make decisions typically by modeling problems
and employing quantitative models for
solution analysis. A decision is a choice
between alternatives based on estimates of
the values of those alternatives.
– Serve middle management
– Support nonroutine decision making
• E.g. What is impact on production schedule if December sales
doubled?
– Often use external information as well from TPS and MIS
Components of DSS
• Database: Current & Historical Data from
Many Sources.
– Internal and external data
• Model base: Collection of Mathematical &
Analytical Building Blocks
• Interface for analysis: What - If Questions; visual
dashboard
DSS Components
Executive support systems
• An Executive Information System (EIS) is a type of
information system intended to facilitate and
support the information and decision-making needs
of senior executives by providing easy access to both
internal and external information relevant to
meeting the strategic goals of the organization. It is
commonly considered as a specialized form of a
Decision Support System.
– Support senior management
– Address nonroutine decisions requiring judgment, evaluation, and
insight
– Incorporate data about external events (e.g. new tax laws or
competitors) as well as summarized information from internal MIS
and DSS
Business Intelligence (BI)
• BI is an evolution of decision support
concepts over time.
– Meaning of EIS/DSS…
• Then: Executive Information System
• Now: Everybody’s Information System (BI)
• BI systems are enhanced with additional
visualizations, alerts, and performance
measurement capabilities.
Recent Developments In Decision
Support Related Technologies
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Data warehouse
Online Analytical Process, OLAP
Data visualization
Dashboard
Business Performance Management
Data mining
Definition of BI
• BI is an umbrella term that combines architectures, tools,
databases, analytical tools, applications, and
methodologies.
• BI 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.
• BI supports every level of business operation.
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 — DSS, Executive Information Systems (EIS)
– 1990s — OLAP, dynamic, multidimensional data
warehouse, ad-hoc reporting
– 2005+ — Inclusion of Artificial Intelligence and
Data/Text Mining capabilities; Web-based
Portals/Dashboards
– 2010s — Yet to be seen
The Evolution of BI Capabilities
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
Business Pressures–Responses–
Support Model
Organizational Responses
• Be Reactive, Anticipative, Adaptive, and
Proactive
• Managers may take actions, such as:
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Employing strategic planning.
Using new and innovative business models.
Restructuring business processes.
Participating in business alliances.
Improving corporate information systems.
Improving partnership relationships.
Encouraging innovation and creativity. …cont…>
Organizational Responses, continued
– Improving customer service and relationships.
– Moving to electronic commerce (e-commerce).
– Using new IT to improve communication, data access
(discovery of information), and collaboration.
– Responding quickly to competitors' actions (e.g., in
pricing, promotions, new products and services).
– Automating many tasks of white-collar employees.
– Automating certain decision processes.
– Improving decision making by employing analytics.
Automated Decision System
• A relatively new approach to supporting highly
structured decisions
• An ADS is a rule-based system that provides a
solution to a repetitive managerial problem in a
specific area.
– If only 70% of seats on a fight from LA to NY are sold
three days prior to departure, offer a discount of x %
to nonbusiness travelers.
– If an applicant owns a house and makes over
$100,000 a year, offer a $10,000 credit line.
– An ADS is event-driven alert:
– Monitor credit card transactions for possible fraud
– Offer financial services when customers make big
deposit.
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.
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)
A High-level Architecture of BI
Components in a BI Architecture
• The data warehouse is the cornerstone of any
medium-to-large BI system.
– Originally, the data warehouse included only historical
data that was organized and summarized, so end users
could easily view or manipulate it.
– Today, some data warehouses include access to current
data as well, so they can provide real-time decision
support .
• Business analytics are the tools that help users
transform data into knowledge (e.g., queries, data/text
mining tools, etc.).
Components in a BI Architecture
• Business Performance Management (BPM), which
is also referred to as corporate performance
management (CPM), is an emerging portfolio of
applications within the BI framework that provides
enterprises tools they need to better manage their
operations.
• User Interface (i.e., dashboards) provides a
comprehensive graphical/pictorial view of
corporate performance measures, trends, and
exceptions.
The Benefits of BI
• 1.Helps align the organization towards its key objectives
objectives
• 2.Enables faster and fact-based decision making
• 3.Combines multiple sources of data for decision making
• 4.Efficient collection and distribution of vital data and
statistics
• “The right information at the right time and in the right place”
Intelligence and Espionage
• Stealing corporate secrets, CIA, …
– Intelligence vs. Espionage
• Intelligence
The way that modern companies ethically and legally
organize themselves to glean as much as they can from
their customers, their business environment, their
stakeholders, their business processes, their
competitors, and other such sources of potentially
valuable information
Major BI Tools and Techniques
• Tool categories
– Data management
– Reporting, status tracking
– Visualization
– Strategy and performance management
– Business analytics
– New/advanced tools/techniques to handle
massive data sets for knowledge discovery
Major BI Vendors
• In recent years, the landscape of BI vendors has
changed
– Cognos acquired by IBM in 2008
• IBM also acquired SPSS in 2009
– Hyperion acquired by Oracle in 2008
– Business Objects acquired by SAP in 2009
• Microstrategy
– May be the only independent large BI vendor
• Others include Microsoft, SAS, Teradata (mostly
considered a DW vendor)