1. Business Intelligence
CHAPTER 12
Business Intelligence

2. CHAPTER OUTLINE 12.1 Managers and Decision Making
12.2 What Is Business Intelligence?
12.3 Business Intelligence Applications for Data Analysis
12.4 Business Intelligence Applications for Presenting Results
12.5 Business Intelligence in Action: Corporate Performance Management

3. LEARNING OBJECTIVES
1. Identify the phases in the decision-making process, and use a decision-support framework to demonstrate how technology supports managerial decision making.
2. Describe and provide examples of the three different ways in which organizations use business intelligence.

4. LEARNING OBJECTIVES (continued)
3. Specify the BI applications available to users for data analysis, and provide examples of how each might be used to solve a business problem at your university.
4. Describe three BI applications that present the results of data analyses to users, and offer examples of how businesses and government agencies can use each of these technologies.

5. LEARNING OBJECTIVES (continued)
5. Describe corporate performance management, and provide an example of how your university could use CPM.

6. Chapter Opening Case: Quality Assurance at Daimler AG
Source: Alperium/Shutterstock

7. 12.1 Managers and Decision Making
Management
Management is a process by which organizational goals are achieved through the use of resources (people, money, energy, materials, space, time).
© Sigrid Olsson/Photo Alto/Age Fotostock

8. The Manager’s Job and Decision Making
Managers have three basic roles
(Mintzberg 1973)
Interpersonal roles
Informational roles
Decisional roles
Managers have three basic roles:
Interpersonal roles: figurehead, leader, liaison
Informational roles: monitor, disseminator, spokesperson
Decisional roles: entrepreneur, disturbance handler, resource allocator, negotiator.

9. The Manager’s Job & Decision Making (continued)
Decisions and Decision making
Decision refers to a choice that individuals and group make among two or more alternatives.
Decision making is a systematic process composed of three major phases: intelligence, design and choice (Simon 1977), with the implementation phase added later.
Source: Image Source Limited

10. Decision Making Process

11. Why Managers Need IT Support
The number of alternatives to be considered constantly increases.
Decisions must be made under time pressure.
Decisions are more complex.
Decision makers can be in different locations and so is the information.

12. A Framework for Computerized Decision Analysis
Lower-level managers usually perform the structured and operational-control oriented
tasks in cells 1, 2, and 4. (Blue color above).
Middle managers and staff usually perform the tasks in cells 3, 5, and 7. (Orange color above).
Senior executives usually perform the tasks in cells 6, 8, and 9. (Yellow color above.)

13. Problem Structure
The first dimension deals with the problem structure, where the decision making processes fall along the continuum ranging from highly structured to highly unstructured decisions.
Highly structured
Higly
unstructured
Semistructured
Structured problems are routine and repetitive problems for which standard solutions exist.
Unstructured problems are fuzzy, complex problems for which there are no cut-and-dried
solutions.
Semistructured problems are problems in which only some of the decision process phases
are structured.
Order entry
Loan approval
Building new plant

14. The Nature of Decisions
The second dimension of decision support deals with the nature of decisions
Operational control
Management control
Strategic planning
Operational control involves executing specific tasks efficiently and effectively.
Management control involves decisions concerning acquiring and using resources efficiently
in accomplishing organizational goals.
Strategic planning involves decisions concerning the long range goals and policies for growth
and resource allocation.

15. 12.2 What Is Business Intelligence?
Business Intelligence (BI) refers to applications and technologies for consolidating,
analyzing, and providing access to vast amounts of data to help users make better
business and strategic decisions.
Clicking on the logos above will take you to each company’s home page.
Source: Angela Waye/Shutterstoc

16. The Scope of Business Intelligence
Larger organizations:
Data mining, predictive analytics, dashboards
Smaller organizations:
Excel spreadsheets
Source: Dundas Software, dashboard/online-examples/
screenshots/Marketing-Dashboard.aspx

17. How Organizations Use BI
Develop few, related BI applications Data mart Develop infrastructure to support enterprisewide BI Enterprise data warehouse Support organizational transformation

18. 12.3 Business Intelligence Applications for Data Analysis
Multidimensional Analysis or Online Analytical Processing (OLAP)
Data Mining
Decision Support Systems
© Toh Kheng Ho/Age Fotostock America, Inc.

19. Multidimensional Analysis or Online Analytical Processing (OLAP)
(1) Provides users with a look at what is happening or what has happened.
(2) Allows users to analyze data in such a way that they can quickly answer business questions.
Source: Angela Waye/Shutterstoc

20. Data Mining
Data mining refers to the process of searching for valuable information in a large database,
data warehouse, or data mart.
Data mining performs two basic operations:
Predicting trends and behaviors;
Identifying previously unknown patterns and relationships.
Source: Corbis/Image Source Limited

21. How Business Intelligence Works
© Aydin/Age Fotostock America, Inc.

22. Decision Support Systems (DSS)
DSS capabilities
Sensitivity analysis
What-if analysis
Goal-seeking analysis
Decision support systems (DSSs) are computer-based information systems that
combine models and data in an attempt to solve semistructured and some unstructured
problems with extensive user involvement.
Sensitivity analysis is the study of the impact that changes in one (or more) parts of a model
have on other parts.
What-if analysis is the study of the impact of a change in the assumptions (input data) on the
proposed solution.
Goal-seeking analysis is the study that attempts to find the value of the inputs necessary to
achieve a desired level of output.
© STOCKBROKERXTRA/Age Fotostock America, Inc.

23. 12.4 Business Intelligence Applications for Presenting Results
Dashboards
Data Visualization Technologies
Geographic Information Systems
Real-Time BI

24. Digital Dashboard (example)
Digital Dashboards:
Provide rapid access to timely information.
Provide direct access to management reports.
Are very user friendly and supported by graphics.
Source: MicroStrategy

25. Digital Dashboard (example)
Source: Dundas Software, dashboard/online-examples/
screenshots/Marketing-Dashboard.aspx

26. Digital Dashboard Demo

27. A Bloomberg Terminal
Source: Carlos Osario/Zuma Press

28. Management Cockpit
The management cockpit is a strategic management room that enables top-level decision makers to pilot their businesses better.
The environment encourages more efficient management meetings and boosts team performance via effective communication.
Key performance indicators and information relating to critical success factors are displayed graphically on the walls of the meeting room.
External information can be easily imported to the room to allow competitive analysis.
Source: The Management Cockpit is a registered trademark of SAP,created by Professor M.Georges.

29. Data Visualization Systems
The Power of Visualization
Even though a picture is “worth a thousand words,” we have to be very careful about just what we are seeing.
Remember, on the Internet, it is
“user beware!”
Data visualization is the process of presenting data to users in visual formats, thereby
making IT applications more attractive and understandable to users.
The link above takes you to a short video from Dove.

30. Example of data visualization
Hans Rosling at the TED Talks
This is an outstanding 21-minute video that illustrates data visualization.

31. GISMO
GISMO is a geographic information system developed for the city of Corvallis, Oregon.
Clicking on the link above will present an interactive demonstration of GISMO.

32. 12.5 Business Intelligence in Action: Corporate Performance Management
Corporate performance management is involved with monitoring and managing
an organization’s performance according to key performance indicators.
FIGURE CONTACTS customer service agent dashboard.

33. Chapter Closing Case
The Business Problem
The IT Solutions
The Results