Lecture 1 Overview of Business Intelligence

ITM-761

Business Intelligence

ดร. สลลิ บญุพราหมณ์ 1

เรานีเ้กดิมาแลว้ชาตหินึง่ ควรคํานงึถงึชาตศิาสนา

ไมย่อมใหเ้สยีททีีเ่กดิมา ในหมูป่ระชาชาวไทย

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ควรจะรอ้นอกรอ้นใจ เพือ่ใหพ้ร่ังพรอ้มทั่วตน

ชาตใิดไรรั้กสมคัรสมาน จะทําการสิง่ใดก็ไรผ้ล

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บทพระราชนพินธใ์นรัชกาลที ่ ๖ 2

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What is business intelligence

http://www.webopedia.com

• the tools and systems that play a key role in the strategic

planning process of the corporation.

• These systems allow a company to gather, store, access and

analyze corporate data to aid in decision-making.

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• Generally these systems will illustrate BI in the areas of

• customer profiling,

• customer support,

• market research,

• market segmentation,

• product profitability,

• statistical analysis, and

• inventory and distribution analysis 5

• Most companies collect a large amount of data from

their business operations. To keep track of that

information, a business and would need to use a wide

range of software programs , such as Excel, Access and

different database applications for various departments

throughout their organization.

• Using multiple software programs makes it difficult to

retrieve information in a timely manner and to perform

analysis of the data. 6

http://www.imd.co.th/knowledges.php?id=1

• เทคโนโลยสํีาหรับการรวบรวมขอ้มลู จัดเก็บ วเิคราะห ์และ

การเขา้ถงึขอ้มลู รวมถงึการดใูนหลากหลายมมุมอง

(Multidimensional Model) ของแตห่น่วยงาน ซึง่ชว่ยให ้

ผูใ้ชง้านในองคก์รทําการตดัสนิใจทางธรุกจิทีด่ยี ิง่ขึน้

• BI Application จะรวบรวมการทํางานของระบบสนับสนุน

การตดัสนิใจ แบบสอบถามและสรา้งรายงานเพือ่การ

วเิคราะห ์

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http://www.techopedia.com

• Business intelligence (BI) is the use of computing technologies

for the identification, discovery and analysis of business data -

like sales revenue, products, costs and incomes.

• BI technologies provide current, historical and predictive views

of internally structured data for products and departments by

establishing more effective decision-making and strategic

operational insights through functions like online analytical

processing (OLAP), reporting, predictive analytics, data/text

mining, benchmarking and Business Performance

Management (BPM). These technologies and functions are

often referred to as information management.

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(Rud, Olivia (2009). Business Intelligence Success Factors: Tools for Aligning Your Business in the Global Economy. Hoboken, N.J: Wiley & Sons

• Business intelligence (BI) is a set of theories,

methodologies, architectures, and technologies that

transform raw data into meaningful and useful

information for business purposes.

• BI can handle large amounts of unstructured data to help

identify and develop new opportunities. Making use of

new opportunities and implementing an effective

strategy can provide a competitive market advantage and

long-term stability. 9

http://www.gartner.com

• Business intelligence (BI) is an umbrella term that

includes the applications, infrastructure and tools, and

best practices that enable access to and analysis of

information to improve and optimize decisions and

performance.

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http://www.businessdictionary.com

• Computer-based techniques used in spotting, digging-

out, and analyzing 'hard' business data, such as sales

revenue by products or departments or associated costs

and incomes.

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• Objectives of a BI exercise include

(1) understanding of a firm's internal and external

strengths and weaknesses,

(2) understanding of the relationship between different

data for better decision making,

(3) detection of opportunities for innovation, and

(4) cost reduction and optimal deployment of resources.

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Cindi Howson. (2008). Successful Business Intelligence: Secrets to Making BI a Killer App. McGraw-Hill

• a set of technologies and processes that allow people at

all levels of an organization to access and analyze data.

• Without people to interpret the information and act on

it, business intelligence achieves nothing

• Business intelligence allows people at all levels of an

organization to access, interact with, and analyze data to

manage the business, improve performance, discover

opportunities, and operate efficiently. 13

BI =

• “competitive intelligence.”

• To another person, “reporting” may be a better term,

even though business intelligence goes well beyond

accessing a static report.

• “Reporting” and “analysis” are terms frequently used to

describe business intelligence.

• Others will use terms such as “business analytics” or

“decision support,” 14

How BI provide business value

• BI cuts across all functions and all industries

• BI touches everyone in a company and beyond to customers

and suppliers

• business intelligence can only provide business value when it

is used effectively by people

• There is a correlation between the effective use of business

intelligence and company performance

• However, having better access to data does not affect

company performance; the difference is in what companies do

with the data

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BI for Management and Control • know what’s going on in the business

• information is accessible on a more timely and flexible basis to provide a view of

• How sales are tracking in various regions and by various product lines

• If expenses are on plan or running over budget

• If warehouse capacities are at optimal levels

• If sales pipelines are where they should be

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BI for Improving Business Performance

• Business performance is measured by a

number of financial indicators such as

revenue, margin, profitability, cost to

serve, and so on

• performance gains may be achieved by

improving response rates for particular

campaigns by identifying characteristics

of more responsive customers

• Allows companies to boost revenues by

cross-selling products to existing

customers

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• Accounting personnel may use

BI to reduce the aging of

accounts receivable by

identifying late-paying

customers

• In manufacturing, BI facilitates

gap analysis to understand

why certain plants operate

more efficiently than others 18

Operational BI

• While early business intelligence

deployments focused more on

strategic decisions and performance,

BI increasingly plays a critical role in

the daily operations of a company

• In this regard, accessing detailed

data and reviewing information may

be necessary to complete a task

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Examples of operational BI

• as part of accepting a new order, a customer service

representative may first check available inventory.

• Such an inventory report may be a standard report

developed within an order entry system or it may come

from a BI solution, whether stand alone or embedded in

the order entry application

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• Travel agents and airlines use operational BI to monitor

flight delays so they can proactively re-accommodate

passengers with connections

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• Hospitals and emergency rooms will

use business intelligence to

determine optimum staffing levels

during peak periods

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• Restaurants will use BI to estimate

the wait time for a table based on

the number of current patrons and

average length to dine

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• Walt Disney World’s Magic Kingdom uses business intelligence for its service that issues park visitors FastPass tickets to avoid standing in long lines for rides.

• The business intelligence tools monitor waiting times at the most popular rides to balance the number of tickets issued in given periods throughout the day.

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• Operational business intelligence most differs from BI for

management and control purposes in both the level of

detail required and in the timeliness of the data.

• Operational BI may involve accessing a transaction system

directly or through a data warehouse that is updated in

near real-time multiple times throughout the day

• BI for management and control purposes may also be in

near real time but can also be based on weekly or monthly

data 25

BI for process improvement

• BI may support the decisions individuals make in every

step of a process

• It also may be used to help streamline a process by

measuring how long subprocesses take and identifying

areas for improvement

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Examples for process improvement

• manufacturing-to-shipment is one process.

• In the absence of BI, a company may only realize there is

a problem when a customer complains

• By analyzing the inputs, the time, and the outputs for

each step of the process, BI can help identify the process

bottlenecks

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Examples for process improvement

• At an oil and gas company, cash flow was problematic. A

review of the process showed that gas was being

delivered to customers on time but an invoice was only

sent a week later.

• Reducing the time in the delivery-to-invoice process

helped the company solve cash-flow problems.

• BI tools allowed the company to identify the problem

and then to ensure compliance to a new rule of invoicing

within one day of delivery 28

BI to improve customer service

• Business intelligence can help companies provide high

customer service levels by providing timely order

processing, loan approvals, problem handling, and so on.

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Examples of Customer Service

• Whirlpool uses business intelligence to monitor its

warranty program to understand root causes for

warranty problems and improve customer satisfaction

with its products

• Continental Airlines uses business intelligence to monitor

how full business class cabins are and to ensure its most

valued customers receive complimentary upgrades when

space permits 30

BI to Make the World Better

• Police departments have used BI to help police officers

respond better to call-outs and to reduce crime rates

• School systems use BI to understand the effects and

trends in student grades based on gender, attendance

rates, and teaching methods

• Emergency Medical Associates (EMA) uses BI to analyze

patient trends in New York and New Jersey to better

predict and prepare for disease outbreaks and to

improve emergency room care in area hospitals 31

BI for Discovering New Business Opportunities

• helps businesses assess and uncover new business

opportunities by exploring data and testing theories

• The Chemical Company uses business intelligence to

understand the value proposition of pursuing joint

ventures.

• A hospitality company uses business intelligence to

explore hotel capacity rates as a way of developing the

time-share business 32

Technology changes enabling BI • Rapid change in technology has been one driver of this

frenetic pace of business change; it also has enabled

business intelligence for everyone, not just information

technology experts, programmers, and power users

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Battle Scars

• Business intelligence is a catalyst for change

• Power struggles between IT and the business when

either loses areas of control or disagrees on the scope

and approach

• Jobs eliminated when custom report developers were no

longer needed

• A marketing manager fired when a company realized just

how badly the manager was performing campaign

management 36

Successful BI case studies

• Survey demographics by world region

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• Relationship Between Successful BI Deployment and

Contribution toCompany Performance

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• BI success is measured more by a perception of improved

business performance and qualitative measures than by

quantitative measures

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