Business Intelligence 5 Business Intelligence

Managers and Decision Making What Is Business Intelligence? Business Intelligence Applications – for Data Analysis Business Intelligence Applications – for Presenting Results

Managers and Decision Making 5.1 Managers and Decision Making The Manager’s Job and Decision Making Why Managers Need IT Support? A Framework for Computerized Decision Analysis

The Manager’s Job and Decision Making Management a process by which an organization achieves its goals through the use of resources (people, money, materials, and information) Three Basis Roles of Managers (Mintzberg, 1973): 1. Interpersonal roles (rel-based): figurehead, leader, liaison聯繫 2. Informational roles (comm-based): monitor, disseminator,, spokesperson發言人, analyzer 3. Decisional roles (action-based): entrepreneur, disturbance handler障礙處理, resource allocator, negotiator談判者 Four Phases of Decision Making Management: a process by which an organization achieves its goals through the use of resources (people, money, materials, and information). Three Basic Roles of Managers (Mintzberg, 1973): 1. Interpersonal roles: fi gurehead, leader, liaison 2. Informational roles: monitor, disseminator, spokesperson, analyzer 3. Decisional roles: entrepreneur, disturbance handler, resource allocator, negotiator

Figure 5.1: The Process and Phases in Decision Making Decision: a choice among two or more alternatives that individuals and groups make. Decisions are diverse and are made continuously. Phases of the Decision Making Process: Intelligence Phase: managers examine a situation and then identify and defi ne the problem or opportunity. Design Phase: decision makers construct a model for addressing the situation. They perform this task by making assumptions that simplify reality and by expressing the relationships among all of the relevant variables. Managers then validate the model by using test data. Finally, decision makers set criteria for evaluating all of the potential solutions that are proposed. Choice Phase: involves selecting a solution or course of action that seems best suited to resolve the problem. Th is solution (the decision) is then implemented. Implementation Phase: is successful if the proposed solution solves the problem or seizes the opportunity. If the solution fails, then the process returns to the previous phases. Computer-based decision support assists managers in the decision-making process.

Why Managers Need IT Support? The number of alternatives is constantly increasing Most decisions are made under time constraints Uncertainty in the decision environment Group decision making群體決策required

A Framework for Computerized Decision Analysis Problem Structure決策問題的結構 decision-making processes fall along a continuum ranging from highly structured to highly unstructured The Nature of Decisions決策的性質 All managerial decisions fall into one of three broad categories理決策的的三大類(於時間框架的角度): Operational Control經營/業務控制: executing specific tasks efficiently and effectively. Management Control管理控制: acquiring and using resources efficiently in accomplishing organizational goals. Strategic Planning戰略規劃: the long-range goals and policies長遠目標和策略for growth and resource allocation資源分配. Problem Structure: where decision-making processes fall along a continuum ranging from highly structured to highly unstructured. Nature of Decisions: All managerial decisions fall into one of three broad categories: Operational Control: executing specific tasks efficiently and effectively. Management Control: acquiring and using resources efficiently in accomplishing organizational goals. Strategic Planning: the long-range goals and policies for growth and resource allocation.

Figure 5.2: Decision Support Framework

What IT are Available to Support Managers (1) 決策問題的結構 Structured decision Routine常規and repetitive problems for which standard solution exists, such as inventory control Unstructured decision Deal with “fuzzy,” complex problems for which there are no cut-and-dried solutions No standardized procedure Require human intuition人的直覺and judgment E.g., hiring an executive, Semi-structured Combination of standard solution procedures and individual judgment E.g. evaluating employees, setting marketing budgets for consumer products, trading bonds債券交易 Business Intelligence (BI): is a broad category of applications, technologies, and processes for gathering, storing, accessing, and analyzing data to help business users make better decisions. BI applications enable decision makers to quickly ascertain the status of a business enterprise by examining key information.

What Is Business Intelligence? 5.2 What Is Business Intelligence? Business Intelligence (Video) is a broad category廣泛的類別of applications, technologies, and processes for gathering, storing, accessing, and analyzing data to help business users make better decisions. BI applications enable decision makers to quickly ascertain the status of a business enterprise by examining key information.

Business Intelligence Applications for Data Analysis 5.3 Business Intelligence Applications for Data Analysis Multidimensional Analysis or Online Analytical Processing Data Mining數據挖掘

Multidimensional Analysis or Online Analytical Processing OLAP - also referred to as multidimensional analysis多維分析/多元分析 -- Video capabilities. OLAP involves “slicing and dicing”涉及“切片和切塊” data stored in a dimensional format (#13:53min), drilling down向下搜索in the data to greater detail, and aggregating the data. Online Analytical Processing (OLAP - also referred to as multidimensional analysis) capabilities. OLAP involves “slicing and dicing” data stored in a dimensional format, drilling down in the data to greater detail, and aggregating the data.

Data Mining Data Mining : the process of searching for valuable business information in a large database, data warehouse, or data mart數據倉庫或數據集市. --- (Video) Two Basic Data Mining Operations (兩種基本數據挖掘操作的目的) Predicting trends潮流/趨勢and behaviors – e.g. for targeted marketing Identifying previously unknown patterns趨勢 Analyze retail sales data to discover seemingly unrelated products that people often purchase together. Detect fraudulent credit card … [based on] the typical ways you use your credit card and your typical shopping behaviors Data Mining: the process of searching for valuable business information in a large database, data warehouse, or data mart. Data Mining Can Perform Two Basic Operations: (1) predicting trends and behaviors (2) identifying previously unknown patterns.

Business intelligence (1) You can use IBM analytics (http://www.ibm.com/analytics/us/en/) to: • Understand what happened. Descriptive analytics enable you to look at past information for new insights about what is happening in your business. You can understand how current product lines are performing, identify top key sales teams and track company achievements with key performance indicators. • Explore why it happened. Diagnostic analytics enable you to quantify relationships in data to understand why something has happened. For example, you can associate service margins by engagement, region and project team. You can analyze individual transactions to identify purchase patterns and you can determine new store location based on customer sentiment. Source: IBM Software, BI Forward: A Full View of Your Business, 2013. (URL: https://www-01.ibm.com/)

Business intelligence • Predict what is likely to happen next. With predictive analytics, you can determine the probability of a future outcome. You can foresee expected sales revenue by region in the coming months. You can project annual product manufacturing requirements by factory. You can even anticipate customer turnover based on price fluctuations. Predictive analytics processes historical data, “learns” what has happened in the past and creates models. These models analyze new sets of data to obtain a “prediction,” or the likelihood that a future event or behavior might occur. Most models use a numeric score to express this likelihood. The goal is to learn from past mistakes and successes and from customer comments, options and transactions so you know what to change and what to replicate. Source: IBM Software, BI Forward: A Full View of Your Business, 2013. (URL: https://www-01.ibm.com/)

Business Intelligence Applications for Presenting Results 5.4 Business Intelligence Applications for Presenting Results 商業智慧中的兩種主要顯示其結果的方式 Dashboards儀表板 Provides easy access to timely information and direct access to management reports. They evolved演變from executive information systems高管信息系統, which were information systems designed specifically for the information needs of top executives Data Visualization Technologies視化數據技術 Data presented to users in visual formats視覺格式such as text, graphics, and tables following data processing. Data Visualization makes IT applications more attractive and understandable to users Real-Time BI Includes the use of real time data for analysis as it is created rather than using historical data for analysis. [refer to my course-website for a video of TableauPublic] Dashboard: provides easy access to timely information and direct access to management reports. They evolved from executive information systems, which were information systems designed specifically for the information needs of top executives Data Visualization: data presented to users in visual formats such as text, graphics, and tables following data processing. Data Visualization makes IT applications more attractive and understandable to users. Real-Time Business Intelligence: includes the use of real time data for analysis as it is created rather than using historical data for analysis.

Figure 5.3: Sample Performance Dashboard

Figure 5.5: Management Cockpit管理主控室

Figure 5.6: Support Center Operations Dashboard

Table 5.1: The Capabilities of Dashboards