Transcript Business Intelligence (BI)

Business Plug-In B18
Business Intelligence
McGraw-Hill/Irwin
Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
LEARNING OUTCOMES
1. Explain the problem associated with business
intelligence. Describe the solution to this
business problem.
2. Describe the three common forms of data-mining
analysis.
3. Compare tactical, operational, and strategic BI.
4. Explain the organization-wide benefits of BI.
5. Describe the four categories of BI business
benefits.
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BUSINESS INTELLIGENCE
• Business Intelligence (BI)—Applications
and technologies used to gather, provide
access to, and analyze data and information
to support decision-making efforts
• Parallels between the challenges in
business and challenges of war:
– Collecting information
– Discerning patterns and meaning in the information
– Responding to the resultant information
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THE PROBLEM:
DATA RICH, INFORMATION POOR
• As businesses increase their reliance on
enterprise systems such as CRM, they are rapidly
accumulating vast amounts of data
• Businesses face a data explosion as digital
images, email in-boxes, and broadband
connections doubles
• The amount of data generated is doubling every
year, and some believe it will soon double monthly
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THE SOLUTION:
BUSINESS INTELLIGENCE
• Improving the quality of business decisions has a
direct impact on costs and revenue
• BI systems and tools results in creating an agile
intelligent enterprise
• BI enables business users to receive data for
analysis that is:
–
–
–
–
Reliable
Consistent
Understandable
Easily Manipulated
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THE SOLUTION:
BUSINESS INTELLIGENCE
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OPERATIONAL, TACTICAL, AND
STRATEGIC BI
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BI’S OPERATIONAL VALUE
• Data latency is the time duration to make data ready
for analysis and loading the data into the database
• Analysis latency is the time from which data are
made available to the time when analysis is complete
• Decision latency is the time it takes a human to
comprehend the analytic result and determine an
appropriate action
• The key is to shorten the latencies so that the time
frame for opportunistic influences is faster, more
interactive, and better positioned
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DATA MINING
• Data Mining—Process of analyzing data to
extract information
• Data-Mining Tools—Use a variety of techniques
to find patterns and relationships in large volumes
of information
– Classification
– Estimation
– Affinity grouping
– Clustering
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CLUSTER ANALYSIS
• Cluster Analysis—A technique used to divide an
information set into mutually exclusive groups
such that the members of each group are as
close together as possible to one another and the
different groups are as far apart as possible
• CRM systems depend on cluster analysis to
segment customer information and identify
behavioral traits
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ASSOCIATION DETECTION
• Association Detection—Reveals the degree to
which variables are related and the nature and
frequency of these relationships in the information
• Market Basket Analysis—Analyzes such items
as websites and checkout scanner information to
detect customers’ buying behavior and predict
future behavior by identifying affinities among
customers’ choices of products and services
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STATISTICAL ANALYSIS
• Statistical Analysis—Performs such functions
as information correlations, distributions,
calculations, and variance analysis
– Forecast—Predictions made on the basis of
time-series information
– Time-Series Information—Time-stamped
information collected at a particular frequency
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BUSINESS BENEFITS OF BI
• Benefits of BI include:
– Single Point of Access to Information for
All Users
– BI across Organizational Departments
– Up-to-the-Minute Information for Everyone
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CATEGORIES OF BI BENEFITS
• Quantifiable Benefits
– Include working time saved in producing
reports, selling information to suppliers, and so
on
• Indirectly Quantifiable Benefits
– Evaluated through indirect evidence—
improved customer service means new
business from the same customer, and
differentiated service brings new customers
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CATEGORIES OF BI BENEFITS
• Unpredictable Benefits
– The result of discoveries made by creative
users
• Intangible Benefits
– Improved communication throughout the
enterprise, improved job satisfaction of
empowered users, and improved knowledge
sharing
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