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Business Intelligence Module Overview

This document discusses business intelligence and how it helps managers make better decisions. It describes the phases of decision making and how technology supports it. Various business intelligence applications for data analysis and presenting results are also explained.

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Dagsman Dieciem
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42 views7 pages

Business Intelligence Module Overview

This document discusses business intelligence and how it helps managers make better decisions. It describes the phases of decision making and how technology supports it. Various business intelligence applications for data analysis and presenting results are also explained.

Uploaded by

Dagsman Dieciem
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Business Intelligence

BUSINESS INTELLIGENCE

This lesson intends to stress that data analysis process aims in


boosting business performances by helping corporate executives and
other end users make more informed decisions.

Learning Outcomes:

At the end of the lesson, you are expected to:

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 understand the manager’s role;
3. Increase decision making skills;
4. Describe and provide examples of the different ways in
which organizations use business intelligence;
5. 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;
6. 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.

Managers and Decision Making

Management is process by which organizational goals are


achieved through the use of resources (people, money, energy,
materials, space, time).

Productivity
A measurement of resources used as compared to the goals met.

The Manager’s Job and Decision Making

• Interpersonal roles: figurehead, leader, liaison


• Informational roles: monitor, disseminator,
spokesperson

INTRODUCTION TO INFORMATION SYSTEMS 1


Business Intelligence

• Decisional roles: entrepreneur, disturbance handler,


resource allocator, negotiator

[Link]

A decision refers to a choice among two or more alternatives


that individuals and groups make. Decisions are diverse and are
made continuously. Decision making is a systematic process. It
starts with the intelligence phase, in which managers examine a
situation and identify and define the problem or opportunity. In
the design phase, decision makers construct a model for the
situation making assumptions that simplify the expressing the
relationships among all the relevant variables. Finally, the
choice phase involves selecting a solution or course of action
that seems best suited to resolve the problem. This solution is
then implemented. Implementation is successful if the proposed
solution solves the problem or seizes the opportunity. If the
solution fails, then the process returns to the previous phases.
Computer-based decision support assists managers in the
decision-making process.

Fig. 1: The Decision making phases and process

INTRODUCTION TO INFORMATION SYSTEMS 2


Business Intelligence

Why Managers need IT support?

1 The number of alternatives to be considered constantly


increasing. Due to innovations in technology, improved
communication, the development of global markets, and the
use o the Internet and e-business.
2 Decisions must be made under time pressure. It is often
not possible to manually process information fast to be
effective.
3 Decisions are more complex. It is usually necessary
conduct a sophisticated analysis in order to make a good
decision.
4 Decision makers can be in different locations and so is
the information. Bringing everything together quickly can
be a major challenge.

What is Business Intelligence?

The applications and technologies for consolidating, analyzing,


and providing access to vast amounts of data to help users make
better business and strategic decisions.

Business Intelligence Applications for Data Analysis

A good strategy to study the ways in which organizations use


business intelligence applications is to consider how the users
analyze data, how they present the results of their analyses, and
how managers and executives(who can be users implement the
results).

A variety of BI applications for analyzing are available these


includes:

1. Multidimensional data analysis (or online


analytical processing - OLAP) – “involves
slicing and dicing” data stores in dimensional
format, drilling down in the data to greater detail
and aggregating the data.
• Provides users with a look at what is
happening or what has happened.

INTRODUCTION TO INFORMATION SYSTEMS 3


Business Intelligence

• Allows users to analyze data in such a


way that they can quickly answer
business questions.

2. Data mining – refers to the process of searching


valuable business information in a large
database, data warehouse or data mart.

Common Data Mining Examples:

• Predicting trends and behaviors


• Identifying previously unknown patterns and
relationships
• Specific Industry Examples:
o Retail: Predicting Sales, Inventory Levels
o Banking: Determining credit approvals
o Police work: Tracking crime patterns, collecting
criminal evidence
o Healthcare: Diagnostics & symptom analysis

3. Decision support systems- Computer-based


information systems that combine models and
data in an attempt to solve problems with
extensive user involvement.

3 Common types of DSS.

• Sensitivity analysis: the study of the impact


that changes in one (or more) parts of a model
have on other parts.
• What-if analysis: the study of the impact of a
change in the assumptions (input data) on the
proposed solution.
o Example: Excel Scenario Manager
• Goal-seeking analysis: the study that attempts to
find the value of the inputs necessary to achieve a
desired level of output.
o Example: Excel Solver

[Link]

INTRODUCTION TO INFORMATION SYSTEMS 4


Business Intelligence

Business Intelligence Applications for Presenting Results

The results of the data types of the data analyses can be


presented with dashboards and data visualization technologies.

a. Digital dashboards- evolved from executive information


systems, which were information systems designed specifically
for the information needs of top executives.
b. Data visualization – after data have been processed, they
can be presented to users in visual formats such as text, graphics
and tables. This process is known as data visualization.

INTRODUCTION TO INFORMATION SYSTEMS 5


Business Intelligence

Assignment:

Provide at least 3 industries using Business Intelligence software and how it benefits them.

Glossary
Business Intelligence is the applications and technologies for
consolidating, analyzing, and providing access to vast amounts
of data to help users make better business and strategic
decisions

INTRODUCTION TO INFORMATION SYSTEMS 6


Business Intelligence

Decision refers to a choice among two or more alternatives that


individuals and groups make.

Management is process by which organizational goals are


achieved through the use of resources (people, money, energy,
materials, space, time).

Productivity
A measurement of resources used as compared to the goals met.

References
Rainer & Prince. Introduction to Information Systems, 5th
Edition. Wiley 2015

Joseph Valacich and Christoph Schneider. Information Systems


Today, 5th edition. Prentice Hall, 2010..

[Link]

[Link]

INTRODUCTION TO INFORMATION SYSTEMS 7

Common questions

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Managers play a crucial role in integrating business intelligence tools by identifying organizational needs and aligning BI applications to meet these needs effectively. They utilize BI tools such as dashboards for real-time data presentation, OLAP for data analysis, and data mining for discovering patterns that aid in decision-making. By fostering a data-driven culture and ensuring the efficient deployment of these tools, managers enhance operational efficiency and strategic planning within the organization .

Organizations face several challenges when implementing business intelligence systems, including data integration from diverse sources, ensuring data quality and accuracy, and user resistance to change. Overcoming these challenges involves investing in robust data integration technologies, establishing data governance strategies to ensure data consistency, and training users to improve acceptance and proficiency in using BI tools .

Business intelligence supports strategic decision-making by providing applications and technologies that consolidate and analyze large amounts of data, offering users the ability to make more informed strategic decisions. BI applications like multidimensional data analysis (OLAP), data mining, and decision support systems allow managers to predict trends, identify patterns, and evaluate potential decisions quickly and accurately. This facilitates better strategic planning and risk management at the corporate level .

Industries such as retail, banking, and healthcare benefit greatly from Business Intelligence applications. Retail uses BI for predicting sales and managing inventory levels, banking employs BI for credit risk assessment and fraud detection, and healthcare utilizes BI for diagnostic analysis and resource management. These industries benefit from BI by enhancing decision-making processes, improving operational efficiency, and gaining competitive advantages through data-driven insights .

Decision support systems (DSS) enhance managerial decision-making by combining models and data to solve complex problems with extensive user involvement. They facilitate processes such as sensitivity analysis, which examines the impact of changes in model variables, what-if analysis, which explores the effects of changes in input data on proposed solutions, and goal-seeking analysis, which finds input values needed to achieve a desired outcome . These systems allow managers to effectively handle various decision-making scenarios, improving efficiency and outcomes.

In the absence of computerized support systems, decision-making in modern organizations would be significantly hampered. Without the speed and data-processing capabilities of computers, managers would struggle to analyze large volumes of data quickly, making it difficult to make timely decisions. The lack of technological support would also increase the likelihood of errors due to manual processing and limit decision-making to simpler analyses, which could lead to suboptimal strategic outcomes and reduced competitive advantage .

Data visualization technologies transform complex data sets into visual formats like graphs, tables, and charts, making it easier for organizations to interpret and act upon the insights provided by business intelligence systems. These visual tools allow for quicker comprehension of data trends and patterns, enhancing the decision-making process by making data accessible and understandable to a broader range of employees, including those without technical expertise .

The decision-making process is structured in several phases: the intelligence phase, where situations are examined and problems are identified; the design phase, where models are constructed to simplify relevant variables; and the choice phase, where the best solution is selected and implemented. Technology supports each phase through computer-based decision support systems that provide necessary tools for problem identification, model simulation, and implementation verification, ensuring that decisions are informed and effective .

Business intelligence improves productivity by providing tools that streamline data analysis and decision-making processes. By offering comprehensive insights into business operations through data mining and OLAP, BI enables managers to make informed decisions that optimize resource allocation and operational efficiency. Additionally, BI facilitates the identification of performance bottlenecks and new opportunities, leading to enhanced organizational productivity .

In the context of business intelligence, productivity is measured by comparing the resources used with the goals met. BI tools allow organizations to analyze resource allocation, ensuring that resources such as time, money, and human capital are utilized efficiently to achieve organizational goals. This strategic alignment of resources with data-driven insights leads to improved performance outcomes, thus enhancing productivity .

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