Week 7: Decision Support and Business Intelligence:

Why organisations need business intelligence:

Business intelligence is the use of information systems to gather and analyse
data and information from both internal and external sources to improve
decision-making, responsiveness to threats and opportunities and effective
management of business processes. Globalisation has resulted in increased
competition and increased market opportunities whilst changes in the business
environment such as shorter product life cycles and fierce competition make
business intelligence necessary for a firm to compete in this new environment.
The difficulty of business intelligence is the emergence of big data. Big data is
high in VOLUME, which makes searching for relevant information difficult, high in
VARIETY (structured, semi structured, unstructured) and high VELOCITY, which
forces businesses to increase the speed of processing.
Databases providing inputs into business intelligence applications
Databases are a collection of related data organised in a way that facilitates data
searches. Databases have enabled the development of interactive websites to
provide customised information to customers. Database management systems
enable a firm to create, store, organise and retrieve data from a single database.
Databases are a record of collection of attributes (individual pieces of
information) about entities (the subject of the collected data such as people). The
advantages of databases are:
Program-data independence: enables firms to update the software without
affecting data
Improve data sharing: through centralized system which makes it easier to
control data
Increased security: centralized system makes it easier to enforce access
restrictions
Reduced program maintenance: information updates is replicated
seamlessly in the database
Database types:
1. Relational database management systems (RDBMS):
They aim to balance efficiency of storage needs and ease of retrieval. However
they are highly complex systems unable to handle large volumes of unstructured
data, and not easily scalable.
2. NoSQL:
NoSQL eliminates the restrictions of RDBMS as they are highly scalable and
distributable across multiple machines. They are also flexible in the types of data
they handle including unstructured data. However they are currently very costly
as they are still in the early stages of their development.
Databases: Effective management
Data must be organised with few redundancies and be easily retrievable. There
are 2 elements to databases: (1) data and (2) the structure of data. Data types
assists database management systems to organise and sort data, data
dictionaries explain the format of the data such as name, type and value.
Business rules are developed from data dictionaries and they determine who is
permitted to what data and what data should be included in the database.
Entering and querying data:
Data can be entered in a number of ways:
Forms: blank spaces for users to input information.
Report: compilation of data from the database that is organised and
printed

Report generators: help users to build interactive reports to view data in

useful formats
Query: used to retrieve data from the database.
Online transaction processing:
A system designed to handle multiple concurrent transactions from customers. Its
primary use is to gather new information, transform and update the information
in the system.
Operational systems and business intelligence:
Operational systems are utilised to interact with customers and run a business in
real time. They support historical based decision-making and aim the run the
business on a current basis. Its primary users are online customers and
salespersons and are mainly used for simple updates and queries.
Master data management:
Master data is data that is deemed the most important to the operations of a
firm. It involves different business units and corporate levels coming to a
consensus on what is deemed master data such as customer lists, and supplier
data, etc. Business intelligence complements master data by documenting how
the data has changed over time.
Data warehouse:
A data warehouse integrates multiple large databases historical and current into a single repository. Its purpose is to put key business information in the
hands of more decision makers. It is an expensive task but can store vast
amounts of data.
Extraction, Transformation and Loading:
This is the process of consolidating data from operational systems with other
organisational data. Data is extracted from various systems and is then
transformed and cleansed (correcting inaccurate data) to fit the needs of the
analysis. The data is then loaded into the data warehouse for use.
Data marts:
They are essentially data warehouses but limited in scope as they only contain
select data from data warehouses. They are customised for the decisional needs
of different end user groups.
The Vs defining big data:
1. Volume: the exponential increase in data volume due to social media. Can
be cheaply stored due to advanced technology, however the difficulty is
determining relevance in big data.
2. Variety: the various formats of data
3. Velocity: how fast data is being produced and processed. Firms must be
highly responsive; otherwise they may pass on relevant data.
4. Veracity: conformity to facts such as accuracy, quality and trustworthiness
of data.
5. Variability: data flow is highly inconsistent with periodic peaks daily,
seasonal, unexpected
6. Value proposition: big data enables big analytics resulting in improved
insights and decision-making.
Fundamentals of big data analytics:
Critical success factors:
1. Having a clear business need, vision or strategy
2. Strong, committed sponsorship - The commitment or sponsorship of different
levels of management in the organisation depending on the size or scope of the
analytics.
3. Alignment between the business and IT strategy

4. A fact-based decision making culture to create a fact based decision making

culture senior management must recognize some may not adjust, be a vocal
supporter and have incentives.
5. A strong data infrastructure Success through marrying the old and new
infrastructures.
As big data increases in size and complexity, high performance computing has
become necessary to maintain efficient analytics. Such analytics include inmemory analytics which solves complex problems accurately and in real near
time, and grid computing: which promotes efficiency, lower cost and better
performance by processing jobs in a shared centrally managed pool of resources.
The challenges to big data analytics are:
Data volume: ability to capture and store huge volumes of data quickly
Data integration: combining different structured data quickly and cheaply
Skills availability: shortage of people with the skills to conduct big data
analysis

Business intelligence components:

Business intelligence components comprise of (1) information and knowledge
discovery and (2) Business analytics used to support decision-making.
Information and knowledge discovery tools are used to extract information from
existing data. They include:
Ad Hoc queries and reports: when queries are created because of
unplanned information needs. Information is presented in the form of
scheduled reports (routine decisions) and key indicator reports (summary
of critical information)
Online analytical processing (OLAP): enables a user to extract and view
data from different perspectives. OLAP takes a multidimensional storage
approach where data is summarized into a number of attributes such as
time, region and product.
Data mining: analyses large amounts of data to identify certain
characteristics such as profitable customers. They search for patterns that
are hidden in data. It can be used to undertake association discovery
where it aims to find correlations among set of items over time.
Unstructured data analysis: Includes text mining which deals with
extraction from textual documents and web content mining which deals
with extracting textual information from web documents.
Business analytics supporting decision-making involves:
Business analytics: using predictive analysis to identify trends and predict
outcomes
Decision support systems: supports organisational decision making related
to recurring problems and augments human decision making by
suggesting alternative solutions. Enables the creation of scenario analysis.
Intelligent systems: Artificial intelligence is the science of enabling
information technologies to stimulate human intelligence such as seeing,
walking and talking. Intelligent systems are sensors, software and
computers embedded in machines emulating human capabilities.

Expert systems: mimic human expertise by manipulating knowledge

to provide advice to problems. Challenge of gathering complete
expert knowledge
o Neural networks: network of processing elements that work in
parallel to complete tasks
o Intelligent agent systems: programs that work in the background to
provide service when a certain event occurs.
Knowledge management systems: processes an organisation uses to gain
optimal value from its knowledge assets (the underlying skills, routines,
practices, formulas). It improves customer service, enhances innovation
and improves organisational performance. However it focuses too much on
technology and requires employee participation.
Information visualization: Displaying complex data relationships using a
variety of graphical methods such as dashboards, visual analytics and
geographic information systems.
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