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Business Plug-In B10
Business Intelligence
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LEARNING OUTCOMES
1. Compare tactical, operational, and
strategic BI
2. Describe the three common forms of
data-mining analysis?
3. Describe the four categories of BI
business benefits
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BUSINESS
INTELLIGENCE
O Business intelligence (BI) – applications and
technologies used to gather, provide access to,
and analyze data and information to support
decision-making efforts
O Parallels between the challenges in business
and challenges of war
O Collecting information
O Discerning patterns and meaning in the
information
O Responding to the resultant information
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OPERATIONAL, TACTICAL,
AND STRATEGIC BI
O Claudia Imhoff, president of Intelligent
Solutions, divides the Spectrum of data
mining analysis and business intelligence
into three categories:
O Operational
O Tactical
O Strategic
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OPERATIONAL, TACTICAL,
AND STRATEGIC BI
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OPERATIONAL, TACTICAL,
AND STRATEGIC BI
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BI’s Operational Value
O Richard Hackathorn’s graph demonstrating the
value of operational BI
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BI’s Operational Value
O The key is to shorten the latencies so that
the time frame for opportunistic influences
on customers, suppliers, and others is
faster, more interactive, and better
positioned
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DATA MINING
O Data mining – process of analyzing data to
extract information
O Data-mining tools – use a variety of
techniques to find patterns and
relationships in large volumes of
information
O
O
O
O
Classification
Estimation
Affinity grouping
Clustering
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DATA MINING
O Common forms of data-mining analysis
capabilities include:
O Cluster analysis
O Association detection
O Statistical analysis
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Cluster Analysis
O
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
O
CRM systems depend on cluster
analysis to segment customer
information and identify behavioral
traits
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Association Detection
O
Association detection – reveals the degree
to which variables are related and the
nature and frequency of these
relationships in the information
O Market basket analysis
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Statistical Analysis
O
Statistical analysis – performs such functions
as information correlations, distributions,
calculations, and variance analysis
O Forecast – predictions made on the basis of
time-series information
O Time-series information – time-stamped
information collected at a particular frequency
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BUSINESS BENEFITS OF BI
O Benefits of BI include:
O Single Point of Access to Information for All
Users
O BI across Organizational Departments
O Up-to-the-Minute Information for Everyone
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Four Primary Categories of
BI Benefits
O Four main categories:
O Quantifiable benefits
O Indirectly quantifiable benefits
O Unpredictable benefits
O Intangible benefits
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