Introduction to Business Intelligence: Lecture Notes, Exercises of Business Strategy

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Business Intelligence

Lecture 1:

Introduction to

Business Intelligence

Dr Hendri Rudiawan, SE, MM, MBA

Pascasarjana Magister Managemen, Universitas Borobudur

Resources

Lecture 1: Introduction to Business Intelligence 2

Text Book

Efraim Turban, Ramesh Sharda, Dursun Delen, David King , "Business Intelligence: A

Managerial Approach" , 2nd Edition, Prentice Hall, 2010.

Changing Business Environment &

Lecture 1: Introduction to Business Intelligence 4

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

Business Pressures–Responses–Support Model

Lecture 1: Introduction to Business Intelligence 5

Business Environment Factors

FACTOR DESCRIPTION

Markets Strong competition

Expanding global markets

Blooming electronic markets on the Internet Innovative

marketing methods

Opportunities for outsourcing with IT support

Need for real-time, on-demand transactions

Consumer Desire for customization

demand Desire for quality, diversity of products, and speed of delivery

Customers getting powerful and less loyal

Technolog

y

More innovations, new products, and new services

Increasing obsolescence rate

Increasing information overload

Social networking, Web 2.0 and

beyond

Lecture 1: Introduction to Business Intelligence 7

Societal Growing government regulations and deregulation

Workforce more diversified, older, and composed of more women

Prime concerns of homeland security and terrorist attacks

Necessity of Sarbanes-Oxley Act and other reporting-related

legislation Increasing social responsibility of companies

Greater emphasis on sustainability

Organizational Responses

Lecture 1: Introduction to Business Intelligence 8

▪

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…>

Closing the Strategy Gap

Lecture 1: Introduction to Business Intelligence 10

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.

Business Intelligence (BI)

Lecture 1: Introduction to Business Intelligence 11

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.

The term BI emerged from industry apps.

A Brief History of BI

Lecture 1: Introduction to Business Intelligence 13

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 — Executive Information Systems (EIS)

1990s — OLAP, dynamic, multidimensional, ad-hoc

reporting - > coining of the term “BI”

2005+ — Inclusion of AI and Data/Text Mining capabilities;

Web- based Portals/Dashboards

2010s — Yet to be seen

The Evolution of BI Capabilities

Lecture 1: Introduction to Business Intelligence 14

A High-level Architecture of BI

Lecture 1: Introduction to Business Intelligence 16

Components in a BI

Architecture

Lecture 1: Introduction to Business Intelligence 17

▪

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 (for details

see lecture 2).

▪

Business analytics are the tools that help users transform

data into knowledge (e.g., queries, data/text mining tools, etc.).

Components in a BI

Architecture

Lecture 1: Introduction to Business Intelligence 19

▪

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 (for details see lecture 3).

▪

User Interface (i.e., dashboards) provides a

comprehensive graphical/pictorial view of corporate

performance measures, trends, and exceptions.

Styles of BI

Lecture 1: Introduction to Business Intelligence 20

MicroStrategy, Corp. distinguishes five styles of BI and offers tools

for each:

1. report delivery and alerting

2. enterprise reporting (using dashboards and scorecards)

3. cube analysis (also known as slice-and-dice analysis)

4. ad-hoc queries

5. statistics and data mining