Business Intelligence By Mahesh R Sanghavi Associate Professor, SNJB’s KBJ CoE, Chandwad

Agenda Introduction to data, Information and knowledge Decision Support System Introduction to Business Intelligence Defining BI Cycle BI Environment and Architecture Benefits of BI Factors Responsible for successful BI Project Challenges to Business Intelligence in an Organization

Data, Information, Knowledge Items that are the most elementary descriptions of things, events, activities, and transactions May be internal or external Information Organized data that has meaning and value Knowledge Processed data or information that conveys understanding or learning applicable to a problem or activity

Decision Support Systems Decision-support systems are used to make business decisions, often based on data collected by on-line transaction-processing systems. Examples of business decisions: What items to stock? What insurance premium to change? To whom to send advertisements? Examples of data used for making decisions Retail sales transaction details Customer profiles (income, age, gender, etc.) Prepared By : Mahesh R. Sanghavi, SNJB's KBJ CoE, Chandwad

Decision-Support Systems: Overview Data analysis tasks are simplified by specialized tools and SQL extensions Example tasks For each product category and each region, what were the total sales in the last quarter and how do they compare with the same quarter last year As above, for each product category and each customer category Statistical analysis packages (e.g., : S++) can be interfaced with databases Statistical analysis is a large field, but not covered here Data mining seeks to discover knowledge automatically in the form of statistical rules and patterns from large databases. A data warehouse archives information gathered from multiple sources, and stores it under a unified schema, at a single site. Important for large businesses that generate data from multiple divisions, possibly at multiple sites Data may also be purchased externally Prepared By : Mahesh R. Sanghavi, SNJB's KBJ CoE, Chandwad

What is Business Intelligence (BI) Definitions: Business Intelligence (BI) refers to skills, processes, technologies, applications and practices used to support decision making. Systems that provide directed background data and reporting tools to support and improve the decision-making process. A popularized, umbrella term used to describe a set of concepts and methods to improve business decision making by using fact-based support systems. The term is sometimes used interchangeably with briefing books and executive information systems. Business Intelligence is a broad category of applications and technologies for gathering, storing, analyzing, and providing access to data to help clients make better business decisions. A system that collects, integrates, analyses and presents business information to support better business decision making. Business Intelligence is an environment in which business users receive information that is reliable, secure, consistent, understandable, easily manipulated and timely...facilitating more informed decision making Prepared By : Mahesh R. Sanghavi, SNJB's KBJ CoE, Chandwad

What Is Business Intelligence? ·     Originally a term coined by the Gartner Group in 1993, Business Intelligence (BI) is a broad range of software and solutions aimed at collection, consolidation, analysis and providing access to information that allows users across the business to make better decisions. ·    The technology includes software for database query and analysis, multidimensional databases or OLAP tools, data warehousing and data mining, and web enabled reporting capabilities. ·    Applied across disciplines but especially in Customer Relationship Management (CRM), Supply Chain Management (SCM) Enterprise Resource Planning Provide better, faster and more accessible reports Prepared By : Mahesh R. Sanghavi, SNJB's KBJ CoE, Chandwad

Stages in Business Intelligence Prepared By : Mahesh R. Sanghavi, SNJB's KBJ CoE, Chandwad

What is BI? (continued) Improving organizations by providing business insights to all employees leading to better, faster, more relevant decisions Prepared By : Mahesh R. Sanghavi, SNJB's KBJ CoE, Chandwad © 2008 Accenture. All Rights Reserved.

Architecture of BI

Benefits of Business Intelligence Improve Management Processes planning, controlling, measuring and/or changing resulting in increased revenues and reduced costs Improve Operational Processes fraud detection, order processing, purchasing.. resulting in increased revenues and reduced costs Predict the Future Prepared By : Mahesh R. Sanghavi, SNJB's KBJ CoE, Chandwad

Business Intelligence Loop Business Strategist OLAP Data Mining Reports Decision Support Data Storage Data Warehouse Extraction, Transformation, & Cleansing CRM Clinical IS Pharmacy Lab Prepared By : Mahesh R. Sanghavi, SNJB's KBJ CoE, Chandwad

Why do companies need BI? What’s the best that can happen? What will happen next? What if these trends continue? Why is this happening? Optimization Predictive Modeling Forecasting/extrapolation Statistical analysis ANALYTICS (Tactical & Strategic) Competitive Advantage Alerts Query/drill down Ad hoc reports Standard reports What actions are needed? Where exactly is the problem? How many, how often, where? What happened? DATA ACCESS & REPORTING (Operational) Sophistication of Intelligence Prepared By : Mahesh R. Sanghavi, SNJB's KBJ CoE, Chandwad © 2008 Accenture. All Rights Reserved.

Changing Business Environment The environment in which organizations operate today is becoming more and more complex The complexity creates opportunities on one hand and problems on the other. Business environment factors are divided into four major categories: markets, consumer demands, technology, societal The intensity of these factors increases with time, hence more pressures, more competition, more management problems Prepared By : Mahesh R. Sanghavi, SNJB's KBJ CoE, Chandwad CISB594 – Business Intelligence

Business Environment Factors FACTOR DESCRIPTION Markets Strong competition Expanding global markets Blooming electronic markets on the Internet Innovative marketing methods Opportunities for outsourcing with IT support Need for real-time, on-demand transactions Consumer Desire for customization demand Desire for quality, diversity of products, and speed of delivery Customers getting powerful and less loyal Technology More innovations, new products, and new services Increasing obsolescence rate Increasing information overload Social networking, Web 2.0 and beyond Societal Growing government regulations and deregulation Workforce more diversified, older, and composed of more women Prime concerns of homeland security and terrorist attacks Increasing social responsibility of companies Greater emphasis on sustainability Prepared By : Mahesh R. Sanghavi, SNJB's KBJ CoE, Chandwad – Business Intelligence

Decision Making in Business Will require information Prepared By : Mahesh R. Sanghavi, SNJB's KBJ CoE, Chandwad

Various tools and techniques in BI Most sophisticated BI products include most of the above Prepared By : Mahesh R. Sanghavi, SNJB's KBJ CoE, Chandwad CISB594 – Business Intelligence

The architecture of Business Intelligence Four major components Prepared By : Mahesh R. Sanghavi, SNJB's KBJ CoE, Chandwad

4 major components of Business Intelligence architecture The data warehouse is a special database or repository of data that had been prepared to support decision making applications ranging from simple reporting to complex optimization Prepared By : Mahesh R. Sanghavi, SNJB's KBJ CoE, Chandwad Business Intelligence

4 major components of Business Intelligence architecture 2. Business analytics are the software tools that allow users to create on-demand reports, queries and conduct analysis of data Originally they appear under the name online analytical processing (OLAP) Data Mining - A class of information analysis based on databases that looks for hidden patterns in a collection of data which can be used to predict future behavior e.g. Amazon.com uses data mining to predict the behaviour of their customers Automated Decision Systems - Rule-based system that provide solution usually in one functional area to a specific repetitive managerial problems Prepared By : Mahesh R. Sanghavi, SNJB's KBJ CoE, Chandwad CISB594 – Business Intelligence

4 major components of Business Intelligence architecture 3. Business performance management (BPM) based on balanced scorecard methodology – a framework for defining, implementing, and managing an enterprise’s business strategy by linking objectives with factual measures Objective is to optimize overall performance of an organization. A real-time system that alert managers to potential opportunities, impending problems, and threats, and then empowers them to react through models and collaboration Prepared By : Mahesh R. Sanghavi, SNJB's KBJ CoE, Chandwad CISB594 – Business Intelligence

The architecture of Business Intelligence 4. User interface allows access and easy manipulation of other BI components Tools used to broadcast information Data visualization provides graphical, animation, or video presentation of data and the results of data analysis The ability to quickly identify important trends in corporate and market data can provide competitive advantage Prepared By : Mahesh R. Sanghavi, SNJB's KBJ CoE, Chandwad CISB594 – Business Intelligence

Prepared By : Mahesh R. Sanghavi, SNJB's KBJ CoE, Chandwad BI Challenges Poor data quality Bad quality of information – Dirty Data Computer systems impede rather than enhance BI efforts Context Lack of standardize procedures or processes User resistance No Top Down support Prepared By : Mahesh R. Sanghavi, SNJB's KBJ CoE, Chandwad

Prepared By : Mahesh R. Sanghavi, SNJB's KBJ CoE, Chandwad References http://otec.uoregon.edu/data-wisdom.htm http://www.db-book.com/ http://smallbusiness.chron.com/difference-between-operational-data-strategic-data-10604.html Prepared By : Mahesh R. Sanghavi, SNJB's KBJ CoE, Chandwad