Definition

Business Intelligence (BI) is a set of concepts, methods, and tools used to improve
decisionmaking through data analysis and fact-based insights.

Main Components of BI System

1. Data Source – Collects data from various sources (structured/unstructured).

2. Data Warehouse/Data Mart – Stores and organizes data using ETL (Extract,
Transform, Load).
3. Data Exploration – Uses reporting and query systems for passive analysis.
4. Data Mining – Identifies patterns and valuable insights using AI, ML, and statistical
methods.
5. Optimization – Finds the best solutions from various alternatives.
6. Decision Making – Uses analyzed data to make informed business decisions.

Role of BI

• Supports data-driven decision-making.

• Provides a 360-degree view of business performance.
• Helps in setting Key Performance Indicators (KPIs).
• Identifies business trends and issues.
• Improves data visualization for better decision quality.

BI Users

• Analysts – Analyze historical data.

• Managers/Executives – Improve business efficiency.
• IT Engineers – Use BI for technical insights.
• Small Business Owners – Affordable and useful for decision-making.
Government Officials – Aid in policy and governance decisions.
Types of BI Decisions

1. Strategic – Long-term planning by top management.

2. Tactical – Managing operations and technologies.
3. Operational – Day-to-day decision-making.

Applications of BI

• Decision-making support.
• Data mining and predictive analytics.
• Operational and prescriptive analytics.
• Structuring unstructured data.
• Executive Information Systems (EIS).

Popular BI Tools

• Tableau
• Microsoft Power BI
• QlikView
• SAP BusinessObjects
• IBM Cognos
• Oracle BI
• MicroStrategy
• SAS BI
• TIBCO Spotfire
• Looker

Advantages of BI

• Improved Decision-Making – Real-time data insights.

• Efficiency Gains – Automates data analysis.
• Better Data Management – Organizes and structures data.
• Competitive Advantage – Helps businesses outperform rivals.
• Cost Savings – Identifies inefficiencies.
• Better Forecasting – Predicts future trends.
• Enhanced Collaboration – Improves inter-department communication.

Disadvantages of BI
 • Complex Implementation – Requires expertise.
• High Costs – Expensive for some businesses.
• Data Dependency – Accuracy depends on data quality.
• Security Risks – Stores sensitive data.
• IT Dependence – Needs continuous IT support.
• Scalability Issues – May struggle with large datasets.

Business Intelligence (BI)

Business Intelligence (BI) refers to technologies and practices used to collect, analyze, and
present business data to support decision-making. It provides insights into past and present
business operations using data from warehouses or operational systems.

Advantages of BI:

• Helps identify patterns and trends for better decision-making.

• Provides a clear view of business performance across departments.
• Improves efficiency and cost savings.

Disadvantages of BI:

• Focuses on past data, limiting future predictions.

• Requires significant investment in data collection and tools.
• Can be complex and need skilled professionals.

Business Analytics (BA)

Business Analytics (BA) involves analyzing past business data using statistical methods to
predict future trends and support planning.

Advantages of BA:

• Helps in accurate forecasting and decision-making.

• Uses advanced models for deeper insights.
• Identifies growth opportunities and risks.

Disadvantages of BA:

• Predictions may have uncertainty and errors.

• Requires expertise in data science and statistics.
• Can be time-consuming and resource-intensive.

Similarities between BI and BA:

 • Both analyze data for better decision-making.
• Both use tools like data mining and visualization.
• Both rely on large data sources.

Differences between BI and BA:

Business Intelligence (BI) Business Analytics (BA)

Focuses on past and present data. Analyzes past data to predict the future.
Used for current business operations. Helps in improving and planning future
operations.
Tools: PowerBI, QlikSense, SAP, etc. Tools: Google Docs, MS Office, MS Visio, etc.
Suitable for large-scale companies. Best for companies focusing on future growth.
Part of Business Analytics. Includes BI, data management, and analytics.
Decision Making

• A decision process involves selecting the best alternative among multiple choices
based on given criteria.
1. Identify the Problem

• Recognize the need for a decision. This might be due to a problem, opportunity, or
goal.
• Clarify the issue or situation that requires your attention.

2. Gather Information

• Collect relevant data, facts, and opinions to understand the context.

• You may need to research, ask questions, or seek expert advice.

3. Identify Alternatives

• Brainstorm possible solutions or courses of action.

• Consider all viable options, even those that might seem unconventional.
4. Weigh the Evidence

• Evaluate the pros and cons of each alternative.

• Consider factors like costs, risks, benefits, long-term impacts, and alignment with
your goals or values.

5. Choose Among Alternatives

Select the option that best addresses the issue, aligns with your goals, and seems the
most beneficial.

6. Take Action

• Implement the decision by creating a plan of action.

• Take the necessary steps to execute the decision.

7. Review the Decision

• After taking action, monitor the results to assess whether the decision achieved the
desired outcome.
• If necessary, adjust your approach or make a new decision based on feedback.

Decision Support System (DSS)

A decision support system (DSS) is a software program that helps users make decisions by
analysing data. DSSs can be used to solve problems, improve efficiency, and streamline
operations.

Data collection: DSSs can gather data from internal and external sources.
Data analysis: DSSs can analyze large amounts of data using models, algorithms, and
analytical tools.

Decision recommendations: DSSs can provide insights, predictions, and simulations to help
users make decisions.

DSS benefits
Informed decisions: DSSs can help users consider different outcomes and make better, more
informed decisions.

Improved efficiency: DSSs can automate data analysis, which can help improve efficiency.
Better collaboration: DSS tools can include communication and collaboration features.

Flexibility: DSSs can be used by many different industries and can handle complex
problems.

Types of DSS
1. Data-driven DSS
• Focus: Analyzing large amounts of data to help decision-makers spot patterns or trends.
• Example: A sales dashboard that helps managers track sales performance and customer
trends.

2. Model-driven DSS
• Focus: Using mathematical models to simulate different scenarios and predict outcomes.
• Example: A financial planning tool that helps businesses calculate the impact of different
investment strategies.

3. Knowledge-driven DSS
• Focus: Applying expert knowledge or rules to solve specific problems or make decisions.
• Example: A medical diagnostic system that suggests possible diagnoses based on symptoms
and medical history.

4. Communication-driven DSS
• Focus: Supporting group collaboration and decision-making, often in meetings or team
settings.
• Example: Video conferencing tools that allow a team to discuss and decide on a project.

5. Document-driven DSS
• Focus: Managing and analyzing unstructured data, like documents, emails, or PDFs.
• Example: A legal firm’s system that helps lawyers search for and analyze case documents.

Group Decision Support System (GDSS)

A Group Decision Support System (GDSS) is a specialized system designed to assist groups
of people in making decisions by improving communication, collaboration, and decision-
making processes. It supports group meetings, brainstorming sessions, and decisionmaking
activities, helping the group reach a consensus or evaluate alternatives effectively.

Components of GDSS:
1. Communication Tools: o Enable group members to exchange information and ideas
in real time.
o Examples: Video conferencing, instant messaging, discussion boards, and shared
documents.
2. Decision Structuring Tools:
o Help organize and manage the decision-making process by providing frameworks
for structuring problems and evaluating alternatives. o Examples: Decision
matrices, SWOT analysis (Strengths, Weaknesses, Opportunities, Threats), and
brainstorming tools.
3. Voting and Ranking Mechanisms:
o Facilitate decision-making by allowing participants to vote on or rank different
alternatives.
o Examples: Online polls, ranking systems, or preference surveys to gauge the group's
opinions. 4. Anonymity Features:
o Allow group members to contribute their ideas or feedback anonymously, reducing
biases from dominant voices and encouraging open participation. o Examples:
Anonymous input forms, online surveys, or secret ballots.
5. Database Management:
o Store and retrieve relevant data, documents, and information that help in the
decision-making process. o Examples: Centralized file storage or databases
with all necessary documents, reports, and previous decisions.
6. Facilitation Tools:
o Guide the group through the decision-making process, helping them stay on track
and ensuring that all aspects are considered. o Examples: Timers, process flow
tools, and virtual meeting facilitators to help maintain structure during discussions.