Download Business Intelligence and Decision Support

Part IV. Operational and Enterprise Systems and Processes
C hapter 11
Business Intelligence and
Decision Support
C o u rs e
Copyright 2012 John Wiley & Sons, Inc.
11-1
Chapter 11 Outline
11.1 Business Intelligence (BI) for Profits
and Nonprofits
11.2 BI Architecture, Analytics, Reporting,
& Data Visualization
11.3 Data, Text, and Web Mining
5 Oracle BI Apps for iPhone
11.4 Decision Making Processes
11.5 Decision Support Systems (DSS)
11.6 Mobile Intelligence: Convergence of Mobile Computing & BI
Copyright 2012 John Wiley & Sons, Inc.
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Chapter 11 Learning Objectives

Understand organizations’ need for BI, BI technologies, and how to
make a business case for BI investments

Describe BI architecture, data mining, predictive analytics,
dashboards, scorecards, and other reporting and visualization tools
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Understand the value of data, text, and Web mining.
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Understand managerial decision making processes and decision
processes

Describe DSSs, benefits, and structure
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Take a forward-look at the future of BI in the form of mobile
intelligence (MI)
Copyright 2012 John Wiley & Sons, Inc.
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A century ago, John Wanamaker, FATHER OF MODERN ADVERTISING, said
Half the money I spend on advertising is wasted;
the trouble is I don't know which half.
Copyright 2012 John Wiley & Sons, Inc.
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BI, data mining, and DSSs are used to minimize
uncertainty (the reverse of intelligence) and to be able to
make faster, smarter decisions—often in real-time.
When managers and workers have the intelligence they
need to respond correctly and quickly to opportunities,
threats, & mistakes, they and their companies significantly
outperform those that don’t.
http://www.teradatamagazine.com/v10n04/Features/Stellar-Outlook/
Copyright 2012 John Wiley & Sons, Inc.
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Resource allocation

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Proper resource allocation: optimal distribution of
resources to a specific place at a specific time to
achieve a specific purpose.
Ineffective resource allocation—symptoms of which
are long wait times—can prevent delivery of products
or service when needed. This in turn, frustrates
customers and hurts revenues.
• BI can improve a company’s allocation of resources and
profitability—and show a clear ROI.
Copyright 2012 John Wiley & Sons, Inc.
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Why would companies invest in another set of IT apps?
BI leverages existing reporting systems by delivering realtime information through dashboards, mashups, and
reports to employees, managers, partners, & customers.
Since the latest BI tools provide a high degree of selfsufficiency reducing managers’ dependence on analysts
and tech staff, you can expect to be a hands-on user of
these tools during your career.
Copyright 2012 John Wiley & Sons, Inc.
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11.1 Business Intelligence (BI) for Profits & Nonprofits
BI refers to a collection of ISs and technologies that support
managerial decision making or operational control by providing
information on internal and external operations.
• It’s tough to fully understand BI because BI apps are not standalone systems nor do they support a specific objective, as do
supply chain management (SCM) or customer relationship
management (CRM).
• Visualization tools including dashboards &
mashups are the user-interfaces that help
people understand the numbers.
Visit iDashboards.com to preview live dashboards by industry or function
Copyright 2012 John Wiley & Sons, Inc.
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BI Cases

WildTrack (wildtrack.org/), monitors and verifies
endangered rhinos in Africa

United Way (unitedway.org/), monitors fundraising
campaigns and generates reliable reports

Jamba Juice, (jambajuice.com/), monitors customers’
preferences and captures data for fast, reliable P&L
and financial reporting
Figure 11.3 Endangered
black rhinoceroses are
tracked using BI
Figure 11.4 Jamba Juice store managers
rely on BI for marketing and accounting
Copyright 2012 John Wiley & Sons, Inc.
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3 Types of BI

Strategic
Traditional BI

Tactical

Operational
Copyright 2012 John Wiley & Sons, Inc.
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How to Recognize the Need for BI
Competing and conflicting versions of what’s happening
 Can’t trust reports
 Can’t perform in-depth analysis
 Can’t find crucial data
 Need simple-to-use production reporting technology
 Delay and difficulty consolidating data
 Can’t comply with government and regulatory reporting
mandates

When data are not integrated into a
unified reporting system, there’s no
trusted real-time view.
Copyright 2012 John Wiley & Sons, Inc.
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Predictive Analytics
Branch of data mining that focuses on forecasting trends (e.g.,
regression analysis) and estimating probabilities of future events
Figure 11.5 Top 5 business
pressure driving the adoption
of predictive analytics. (Data
from Aberdeen Group)
Copyright 2012 John Wiley & Sons, Inc.
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Event-Driven Alerts
Event-driven alerts are real-time alerts or warnings that are
broadcast when a predefined event occurs.
Figure 11.6 (in textbook) shows the processing that takes
place when an unusually large deposit occurs
For a credit card company, a customer's sudden payoff of the
entire balance might trigger a business rule that creates an
alert because the payoff could be a signal that the customer is
planning to cancel the card.
• E.g., There could be an intervention, such as a low interest
rate offer, to reduce losing the customer.
Copyright 2012 John Wiley & Sons, Inc.
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11.2 BI Architecture, Analytics, Reporting, and Data
Visualization
Purpose of BI is to gain insight from data for the purpose of taking action
IT at Work 11.2
BI Saves Lives of Wounded Soldiers from Battlefield to Treatment
When soldiers are wounded in battle, the military needs to be able to
quickly diagnose their condition and provide medical transport.
TRAC2ES tracks & coordinates patient information throughout the
U.S. military’s worldwide network of healthcare facilities.
Figure 11.9. Overview of the BI
architecture of TRAC2ES to
calculate the best transport
method & the most appropriate
medical center for treatment
Copyright 2012 John Wiley & Sons, Inc.
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Business Performance Management (BPM)

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BPM requires that managers have methods to quickly and easily
determine how well the organization is achieving its goals and objectives,
and whether or not the organization is aligned with the strategic direction.
BPM relies on BI analysis reporting, queries, dashboards, and scorecards.
Figure 11.11. BPM for
monitoring and
assessing performance
Copyright 2012 John Wiley & Sons, Inc.
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11.3 Data, Text, and Web Mining

Data mining is a process that uses statistical, mathematical, artificial
intelligence, and machine-learning techniques to extract and identify
useful information from large databases

Text from documents, e-communications, and e-commerce activities
can be mined. Text needs to be codified, typically with XML (eXtensible
Markup Language), and extracted so that predictive data mining tools
can be used to generate real value

Web mining, or Web-content mining, is used to understand customer
behavior, evaluate a Web site's effectiveness, and quantify the success
of a marketing campaign
Copyright 2012 John Wiley & Sons, Inc.
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Data Mining Apps

Retailing and sales. Predicting sales, determining correct inventory levels
and distribution schedules among outlets, and loss prevention.
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Banking. Forecasting levels of bad loans and fraudulent credit card use
and which kinds of customers will best respond to new loan offers.

Manufacturing and production. Predicting machinery failures; finding key
factors that control optimization of manufacturing capacity.

Healthcare. Developing better insights on symptoms and their causes and
how to provide proper treatments.

Broadcasting. Predicting which programs are best to air during prime time

Marketing. Classifying customer demographics that can be used to predict
which customers will respond to a mailing or Internet banners or buy a
particular product
Copyright 2012 John Wiley & Sons, Inc.
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11.4 Decision Making Processes
Figure 11.14 Phases in the
decision-making process
Copyright 2012 John Wiley & Sons, Inc.
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Types of decisions
Structured decisions are routine and repetitive problems for
which standard solutions exist.
Unstructured decisions involve a lot of uncertainty for which
there are no definitive or clear-cut solutions.
Semistructured decisions fall between the polar positions.
Copyright 2012 John Wiley & Sons, Inc.
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11.5 Decision Support Systems (DSS)

DSS are a class of ISs that combine models and data to
solve semistructured and unstructured problems with
intensive user involvement.

DSS is interactive, flexible, and adaptable—and support the
solution of unstructured or semistructured problems.

DSSs have easy-to-use interfaces, and allow for the decision
maker’ own insights.

Models used in DSSs enable sensitivity analysis—study of
the impact that changes in one or more parts of a model
have on other parts or the outcome.
Copyright 2012 John Wiley & Sons, Inc.
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Figure 11.15
Conceptual model
of DSS and its
components
Copyright 2012 John Wiley & Sons, Inc.
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11.6 Mobile Intelligence:
Convergence of Mobile Computing and BI
Figure 11.16 Five generations of computing from 1960s to 2010s
According to Morgan Stanley’s Global Mobile Internet Report,
mobile computing may be the fastest growing and most
disruptive technology launch we have ever seen.
Copyright 2012 John Wiley & Sons, Inc.
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Unifying Communications in the Cloud

Powerful mobile devices using IP-based infrastructure, such as
4G networks, combined with easy-to-use software are unifying
communications

Smartphones and other Internet-enabled mobile devices
change how people stay informed, communicate, and in general
manage their professional and personal lives

Accessing information at any time, in any location, on a
handheld device on a regular basis has changed the way that
managers and other workers expect to make decisions
Copyright 2012 John Wiley & Sons, Inc.
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Mobile Intelligence (MI)

MI is positioned to change how organizations deliver, consume, and
act on information

Without 24x7 convenient access to business information, decisions
and actions get postponed causing bottlenecks and delays

These restrictions and delays are blown away with MI, which allows
analysis and decision-making wherever a decision is required

In the Mobile Intelligence era, businesses that don’t yet exist may
evolve into industry leaders
Copyright 2012 John Wiley & Sons, Inc.
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Chapter 11 Link Library
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Business Intelligence Journal businessintel.org/
The Data Warehousing Institute (TDWI) tdwi.org/
Cloud9 Analytics, on-demand (SaaS) cloud9analytics.com/
Information Builders informationbuilders.com/
WebFOCUS BI platform informationbuilders.com/products/webfocus/
IBM Cognos 8 BI www-01.ibm.com/software/data/cognos/
Oracle Oracle.com
SAS BI sas.com/technologies/bi/
SAP AG Sap.com
Microsoft BI microsoft.com/bi/default.aspx
Tableau Software tableausoftware.com/
QlikTech qlikview.com
iDashboards idashboards.com
Honoring Those Who Use IT to Benefit Society cwhonors.org/
Copyright 2012 John Wiley & Sons, Inc.
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