1. Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Business Plug-In B10 Business Intelligence

2. 10-2 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

3. 10-3 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

4. 10-4 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

5. 10-5 OPERATIONAL, TACTICAL, AND STRATEGIC BI

6. 10-6 OPERATIONAL, TACTICAL, AND STRATEGIC BI

7. 10-7 BI’s Operational Value O Richard Hackathorn’s graph demonstrating the value of operational BI

8. 10-8 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

9. 10-9 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 Classification O Estimation O Affinity grouping O Clustering

10. 10-10 DATA MINING O Common forms of data-mining analysis capabilities include: O Cluster analysis O Association detection O Statistical analysis

11. 10-11 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

12. 10-12 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

13. 10-13 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

14. 10-14 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

15. 10-15 Four Primary Categories of BI Benefits O Four main categories: O Quantifiable benefits O Indirectly quantifiable benefits O Unpredictable benefits O Intangible benefits