1. ISYS 650 Business Intelligence
David Chao

2. Fundamental Roles of IS in Business

3. Types of Information Systems
Operations Support Systems
Efficiently support day-to-day operations
Management Support Systems
Provide information and support for effective decision making by managers
Strategic Information Systems
Help get a strategic advantage over customer

4. Operations Support Systems
Transaction Processing Systems, TPS
Record and process business transactions
Any exchange of money or other benefits between two or more parties
Order processing, purchasing
General ledger, accounts payable, accounts receivable
Large amount of data, high processing speed, high reliability, accuracy, and security (fault tolerant)
Data: internal, historical, detailed

5. Current Trend in Operations Support Systems
Enterprise Resources Planning ERP
for the internal world of a company
Customer Relationship Management CRM
for the external world of a company.

6. Enterprise Resources Planning, ERP
A company-wide, integrated, cross-functional system used to manage and coordinate all the resources, information, and functions of a business from shared data bases.
Manufacturing
Transaction processing
Supply chain management
Accounting
Human resource
Major vendors:
SAP, Oracle, Microsoft

7. Customer Relationship Management, CRM
Front office operations:
Direct interaction with customers, e.g. phone calls, , online services etc.
Call Center
Sales Force Automation
tracks all contact that has been made with a given customer, the purpose of the contact, and any follow up that might be required.
Sales Intelligence
Cross-selling/Up-selling/Switch-selling
Example: SalesForce.Com

8. Types of Management Support Systems
Management Information Systems (MIS)
Reports and displays
Example: daily sales analysis reports
Decision Support Systems (DSS)
Interactive and ad hoc support
Example: a what-if analysis to determine where to spend advertising dollars
Executive Information Systems (EIS)
Critical information for executives and managers
Example: easy access to actions of competitors

9. Management Information Systems
Facilitate management control by producing summarized reports that compare actual performance against planned performance on a regular and recurring basis.
Management control: Ensuring that performance meets established standards.
Serve middle management
Provide reports on firm’s current performance, based on data from TPS

10. Sample MIS Report

12. Sales Comparison

14. Decision support systems
A DSS is a computerized system for helping make decisions typically by modeling problems and employing quantitative models for solution analysis. A decision is a choice between alternatives based on estimates of the values of those alternatives.
Serve middle management
Support nonroutine decision making
E.g. What is impact on production schedule if December sales doubled?
Often use external information as well from TPS and MIS

15. Components of DSS
Database: Current & Historical Data from Many Sources.
Internal and external data
Model base: Collection of Mathematical & Analytical Building Blocks
Interface for analysis: What - If Questions; visual dashboard

16. DSS Components

17. Executive support systems
An Executive Information System (EIS) is a type of information system intended to facilitate and support the information and decision-making needs of senior executives by providing easy access to both internal and external information relevant to meeting the strategic goals of the organization. It is commonly considered as a specialized form of a Decision Support System.
Support senior management
Address nonroutine decisions requiring judgment, evaluation, and insight
Incorporate data about external events (e.g. new tax laws or competitors) as well as summarized information from internal MIS and DSS

18. Business Intelligence (BI)
BI is an evolution of decision support concepts over time.
Meaning of EIS/DSS…
Then: Executive Information System
Now: Everybody’s Information System (BI)
BI systems are enhanced with additional visualizations, alerts, and performance measurement capabilities.

19. Recent Developments In Decision Support Related Technologies
Data warehouse
Online Analytical Process, OLAP
Data visualization
Dashboard
Business Performance Management
Data mining

20. Definition of BI
BI is an umbrella term that combines architectures, tools, databases, analytical tools, applications, and methodologies.
BI a content-free expression, so it means different things to different people.
BI's major objective is to enable easy access to data (and models) to provide business managers with the ability to conduct analysis.
BI helps transform data, to information (and knowledge), to decisions and finally to action.
BI supports every level of business operation.

21. A Brief History of BI
The term BI was coined by the Gartner Group in the mid-1990s
However, the concept is much older
1970s — MIS reporting — static/periodic reports
1980s — DSS, Executive Information Systems (EIS)
1990s — OLAP, dynamic, multidimensional data warehouse, ad-hoc reporting
2005+ — Inclusion of Artificial Intelligence and Data/Text Mining capabilities; Web-based Portals/Dashboards
2010s — Yet to be seen

22. The Evolution of BI Capabilities

23. Changing Business Environment & Computerized Decision Support
Companies are moving aggressively to computerized support of their operations => Business Intelligence
Business Pressures–Responses–Support Model
Business pressures result of today's competitive business climate
Responses to counter the pressures
Support to better facilitate the process

24. Business Pressures–Responses–Support Model

25. Organizational Responses
Be Reactive, Anticipative, Adaptive, and Proactive
Managers may take actions, such as:
Employing strategic planning.
Using new and innovative business models.
Restructuring business processes.
Participating in business alliances.
Improving corporate information systems.
Improving partnership relationships.
Encouraging innovation and creativity. …cont…>

26. Organizational Responses, continued
Improving customer service and relationships.
Moving to electronic commerce (e-commerce).
Using new IT to improve communication, data access (discovery of information), and collaboration.
Responding quickly to competitors' actions (e.g., in pricing, promotions, new products and services).
Automating many tasks of white-collar employees.
Automating certain decision processes.
Improving decision making by employing analytics.

27. Automated Decision System
A relatively new approach to supporting highly structured decisions
An ADS is a rule-based system that provides a solution to a repetitive managerial problem in a specific area.
If only 70% of seats on a fight from LA to NY are sold three days prior to departure, offer a discount of x % to nonbusiness travelers.
If an applicant owns a house and makes over $100,000 a year, offer a $10,000 credit line.
An ADS is event-driven alert:
Monitor credit card transactions for possible fraud
Offer financial services when customers make big deposit.

28. Closing the Strategy Gap
One of the major objectives of computerized decision support is to facilitate closing the gap between the current performance of an organization and its desired performance, as expressed in its mission, objectives, and goals, and the strategy to achieve them.

29. The Architecture of BI A BI system has four major components:
a data warehouse, with its source data
business analytics, a collection of tools for manipulating, mining, and analyzing the data in the data warehouse;
business performance management (BPM) for monitoring and analyzing performance
a user interface (e.g., dashboard)

30. A High-level Architecture of BI

31. Components in a BI Architecture
The data warehouse is the cornerstone of any medium-to-large BI system.
Originally, the data warehouse included only historical data that was organized and summarized, so end users could easily view or manipulate it.
Today, some data warehouses include access to current data as well, so they can provide real-time decision support .
Business analytics are the tools that help users transform data into knowledge (e.g., queries, data/text mining tools, etc.).

32. Components in a BI Architecture
Business Performance Management (BPM), which is also referred to as corporate performance management (CPM), is an emerging portfolio of applications within the BI framework that provides enterprises tools they need to better manage their operations.
User Interface (i.e., dashboards) provides a comprehensive graphical/pictorial view of corporate performance measures, trends, and exceptions.

33. The Benefits of BI
1.Helps align the organization towards its key objectives objectives
2.Enables faster and fact-based decision making
3.Combines multiple sources of data for decision making
4.Efficient collection and distribution of vital data and statistics
“The right information at the right time and in the right place”

34. Intelligence and Espionage
Stealing corporate secrets, CIA, …
Intelligence vs. Espionage
Intelligence
The way that modern companies ethically and legally organize themselves to glean as much as they can from their customers, their business environment, their stakeholders, their business processes, their competitors, and other such sources of potentially valuable information

35. Major BI Tools and Techniques
Tool categories
Data management
Reporting, status tracking
Visualization
Strategy and performance management
Business analytics
New/advanced tools/techniques to handle massive data sets for knowledge discovery

36. Major BI Vendors
In recent years, the landscape of BI vendors has changed
Cognos acquired by IBM in 2008
IBM also acquired SPSS in 2009
Hyperion acquired by Oracle in 2008
Business Objects acquired by SAP in 2009
Microstrategy
May be the only independent large BI vendor
Others include Microsoft, SAS, Teradata (mostly considered a DW vendor)