Lecture Business Intelligence - An Introduction

DW - Business Intelligence
An Introduction
Terri Hoare - September 2017

Business Intelligence, Analytics, and Decision Support
 Understand today's turbulent business environment and describe how
organizations survive and even excel in such an environment (solving
problems and exploiting opportunities)
 Understand the need for computerized support of managerial decision

making
 Describe the business intelligence (BI) methodology and concepts
 Understand the various types of analytics

 The environment in which organizations operate today is
becoming more and more complex, creating
◦ opportunities, and
◦ problems.
◦ Example: globalization.
 Business environment factors:

◦ markets, consumer demands, technology, and societal…
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
Technology More innovations, new products, and new services
Increasing obsolescence rate
Increasing information overload
Social networking, Web 2.0 and beyond
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
 Be Reactive, Anticipative, Adaptive, and Proactive
 Managers may take actions, such as

 Employ strategic planning.
 Use new and innovative business models.
 Restructure business processes.
 Participate in business alliances.
 Improve corporate information systems.
 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.
 BI is an evolution of decision support concepts over time
 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

 BI is an umbrella term that combines architectures, tools, databases,
analytical tools, applications, and methodologies
 BI is a content-free expression, so it means different things to different

people
 BI's major objective is to enable easy access to data (and models) to provide
business managers with the ability to conduct analysis
 BI helps transform data, to information (and knowledge), to decisions, and

finally to action
 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”
 2010s - Data/Text/Web Mining; Web-based Portals, Dashboards,

Big Data, Social Media, and Visual Analytics
 2020s - yet to be seen

 A BI system has four major components
 a data warehouse, with its source data
 business analytics, a collection of tools for manipulating, mining, and

analyzing the data in the data warehouse
 business performance management (BPM) for monitoring and analyzing

performance
 a user interface (e.g., dashboard)

Data Warehouse Business Analytics Performance and
Environment Environment Strategy
Data Technical staff Business users Managers / executives
Sources Built the data warehouse Access
Data
ü Organizing Warehouse BPM strategy
ü Summarizing Manipulation
ü Standardizing Results
User Interface
Future component - browser
intelligent systems - portal
- dashboard
 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
 Business analytics are the tools that help the user

transform data into knowledge (e.g., queries, data/text
mining tools, etc.)
 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
 User Interface (i.e., dashboards) provide a comprehensive

graphical/pictorial view of corporate performance
measures, trends, and exceptions.
 Teradata University Network (TUN)
www.teradatauniversitynetwork.com
 BSI Videos (Business Scenario Investigations)

www.youtube.com/watch?v=NXEL5F4_aKA
 Also look for other BSI Videos at TUN

 Data warehouse and BI
initiatives typically follow
a process similar to that
used in military
intelligence initiatives.
 Intelligence and
Espionage
 Stealing corporate secrets, CIA, …
◦ Intelligence vs. Espionage
 Intelligence
The way that the modern companies ethically and legally
organize themselves to glean as much as they can from
their customers, their business environment, their
stakeholders, their business processes, their
competitors, and other such sources of potentially
valuable information
 Problem – too much data, very little value

◦ Use of data/text/Web mining
 Transaction processing systems (OLTP) are constantly involved in handling
updates (add/edit/delete) to what we might call operational databases
 ATM withdrawal transaction, sales order entry via an ecommerce site –

updates DBs
 OLTP – handles routine on-going business
 ERP, SCM, CRM systems generate and store data in OLTP systems
 The main goal is to have high efficiency

 Online analytic processing (OLAP) systems are involved in extracting
information from data stored by OLTP systems
 Routine sales reports by product, by region, by sales person, by …
 Often built on top of a data warehouse where the data is not

transactional
 Main goal is the effectiveness (and then, efficiency) – provide correct

information in a timely manner
 Implementing and deploying a BI initiative is a lengthy, expensive, and risky
endeavor!
 Success of a BI system is measured by its widespread usage for better

decision making
 The typical BI user community includes

 Not just the top executives (as was for EIS)
 All levels of the management hierarchy
 Provide what is needed to whom he/she needs it
 A successful BI system must be of benefit to the enterprise as a whole…

 To be successful, BI must be aligned with the company’s business strategy
◦ BI cannot/should not be a technical exercise for the information systems
department
 BI changes the way a company conducts business by

◦ improving business processes, and
◦ transforming decision making to a more data/fact/information driven
activity
 BI should help execute the business strategy and not be an impediment for
it!
 Developing vs. Acquiring BI systems
 Justifying via cost-benefit analysis

 It is easier to quantify costs
 Harder to quantify benefits
 Security and Protection of Privacy
 Integration of Systems and Applications

 The demand for “real-time” BI is growing!
 Is “real-time” BI attainable?
 Technology is getting there…

 Automated, faster data collection (RFID, sensors,… )
 Database and other software technologies is advancing
 Telecommunication infrastructure is improving
 Computational power is increasing while the cost for these
technologies is decreasing
Moore's Law is the observation made in 1965 by Gordon Moore, co-
founder of Intel, that the number of transistors per square inch on
integrated circuits had doubled every year since the integrated circuit
was invented. Moore predicted that this trend would continue for the
foreseeable future
 Developing or acquiring BI systems
 BI shell?
 In-house versus outside consultants
 Justification and cost-benefit analysis
 Integration of systems and applications
 Security and protection of privacy

◦ The General Data Protection Regulation (GDPR) (Regulation (EU)
2016/679) is a regulation by which the European Parliament, the
European Council and the European Commission intend to strengthen
and unify data protection for all individuals within the European Union
(EU). Strict data protection compliance regime with severe penalties of
up to 4% of worldwide turnover. The regulation was adopted on 27
April 2016. It applies from 25 May 2018
 A Simple Taxonomy of Analytics
 Descriptive Analytics
 Predictive Analytics
 Prescriptive Analytics
 Analytics or Data Science?

 Big Data?
◦ Not just big!
◦ Volume
◦ Variety
◦ Velocity
 The term Big Data comes from the computational sciences
 It is used to describe scenarios where the volume and types of data

overwhelm the tools to store and process it
• The world’s data used to double every century.
• Now it doubles every two years.
• This explosion is driven by the Internet of Things, by mobile devices, and our
ability to generate more digital content than ever before
• The digital universe will grow from 4 zettabytes of data in 2013 to 44

zettabytes in 2020.
• This is the largest business innovation cycle in history, and these changes
threaten existing data strategies.
• Many companies have big plans for big data, but existing data architectures
make our data inaccessible, incomplete, irrelevant, and expensive.
• As data streams in at accelerating rates, the cost to store, reformat, and

retrieve it grows more quickly than the value it may provide.
• We know that big data holds big value, but we also know that we are at risk
of being left behind if our competitors capture that value before we do.
• Companies of every size are using new big data opportunities to transform
their businesses and the lives of their customers.
• help a pharmaceutical manufacturer make better vaccines that save lives.
• help doctors prescribe treatments based on data from all previous patients.
• help a car insurance company keep drivers safe.
• help mobile providers reduce call center wait times.
• There’s not a single organization that couldn’t benefit from better insight
into their data, but most are unable to store all the data they want or even
use much of what they already have.
 Banking: Offering macro-economic information as a service
 Manufacturing: Merck improves pharma yields with cross-batch analysis
 Railroad: “Data Train” captures video of rail health to prioritize repair
 Telco: Ingest millions of CDRs per second to improve cell service
 Bernard Marr, “Data Strategy”, 2017
“Every Business is a Data Business – A Brave New Data Driven World!”

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DW - Business Intelligence

Terri Hoare - September 2017

 Understand the need for computerized support of managerial decision

 Describe the business intelligence (BI) methodology and concepts

 Understand the various types of analytics

 Business environment factors:

 Managers may take actions, such as

 BI systems are enhanced with additional visualizations, alerts, and

 The term BI emerged from industry

 BI is a content-free expression, so it means different things to different

 BI helps transform data, to information (and knowledge), to decisions, and

 However, the concept is much older

 1980s - Executive Information Systems (EIS)

 1990s - OLAP, dynamic, multidimensional, ad-hoc reporting ->

 2010s - Data/Text/Web Mining; Web-based Portals, Dashboards,

 2020s - yet to be seen

 a data warehouse, with its source data

 business analytics, a collection of tools for manipulating, mining, and

 business performance management (BPM) for monitoring and analyzing

 a user interface (e.g., dashboard)

 Business analytics are the tools that help the user

 User Interface (i.e., dashboards) provide a comprehensive

 BSI Videos (Business Scenario Investigations)

 Also look for other BSI Videos at TUN

 Problem – too much data, very little value

 ATM withdrawal transaction, sales order entry via an ecommerce site –

 OLTP – handles routine on-going business

 The main goal is to have high efficiency

 Routine sales reports by product, by region, by sales person, by …

 Often built on top of a data warehouse where the data is not

 Main goal is the effectiveness (and then, efficiency) – provide correct

 Success of a BI system is measured by its widespread usage for better

 The typical BI user community includes

 A successful BI system must be of benefit to the enterprise as a whole…

 BI changes the way a company conducts business by

 Justifying via cost-benefit analysis

 Security and Protection of Privacy

 Integration of Systems and Applications

 Technology is getting there…

 Justification and cost-benefit analysis

 Integration of systems and applications

 Security and protection of privacy

 Analytics or Data Science?

 It is used to describe scenarios where the volume and types of data

• Now it doubles every two years.

• The digital universe will grow from 4 zettabytes of data in 2013 to 44

• As data streams in at accelerating rates, the cost to store, reformat, and

• help a pharmaceutical manufacturer make better vaccines that save lives.

• help a car insurance company keep drivers safe.

• help mobile providers reduce call center wait times.

 Manufacturing: Merck improves pharma yields with cross-batch analysis

 Railroad: “Data Train” captures video of rail health to prioritize repair

 Telco: Ingest millions of CDRs per second to improve cell service

 Bernard Marr, “Data Strategy”, 2017

“Every Business is a Data Business – A Brave New Data Driven World!”

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