Business Intelligence (81) - Definitions

.Business Intelligence refers to technologies, applications

and practices for the collection, integration, analysis, and
presentation of business information. The purpose of
business intelligence is to support better business decision
making.
.Business Intelligence Models based multi
dimensional analysis and key performance indicators (KPI)
of enterprise.



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is the critical process of getting
datajinformation OUT of the systems we create to monitorjmanage
busi ness system processes
Run The Business
Business Intelligence is the process of converting summarized data
to actionabIe information that improves knowledge and understanding
resulting in improved value delivery!
Grow and Improve the Businessl
Other definitions:
Gartner Group:Business intelligence is the process of transforming data
into information and through discovery transformi ng that informati on into
knowledge.
is broad category of appl ication programs and technologies for
gathering, storing, analyzing, and providing access to data to help
users make better business decisions.
Improving organizations providing business insi ghts to all employees
leading to deci sions.
This the slide:
Provides way to conceptually divide the information reporting and
business intelligence worlds into separate areas:
The top half of the picture is about the user's interaction with
application, with the and management of data
using application-based functionality - often including
and some form of ad hoc reporting. The focus is typically running
the busi ness - and this referred to as information

The bottom half refl ects the Business I ntelligence process which
we obtain data from systems, develop effi cient
effective structures that optimized to answer specific questions.
We clean and transform the data and store it in data warehouse from
which we develop reports data marts t hat drive reports other
information tool s delivery vehicles.
1
What types of information does consider?
Supply
Inventory
Production
Other Internal
Operations
Data )
Sales Performance
Customer
Marketing
Inventory Monitoring
Information
I Origins and Drivers of Business I ntelli gence
summarize:
Organizations compell ed to capture,
understand, and harness their dat a to support
decision making in order to improve business
operations
Business cycl e ti mes now extremely
compressed => faster, informed, and better
decision making is therefore competi tive
imperative
Managers need t he right at t he right
time and in t he right
Origins and Drivers of Business Intelligence
In the past years, lot of billions were spent worldwide for
enterprise application software
enterprise planning (ERP)
customer relationship management (CRM)
supply chain management (SCM)
Although these applications make operation
efficient and effective, they have also created "data
tsunami" of information, hitting business users who
now getting data, reports and analysis from multiple
sources and in multiple forms.
At the same time, the external business conditions
causing these same business users to make new and
more-demanding strategic and operational decisions.
Regulations changing rapidly, requiring higher degrees
of data integrity and confidence in the information.
Most Organizations Lack Clear Vision for How
to CloseJhe
Amount
Time
Tlle 81
Gap
2
- Strategic imperative
because:
Barriers to entry of new competitor to industry
being significantly diminished
organization that has strong position within its
industry could easily face new competitors because the
costs and other constraints to becoming player in the
market have decreased
Globalization!
successful in today's business
must:
Assess their readiness for meeting the challenges posed
t hese new business realities
Take holistic approach to functionality
Leverage best practices and anticipate hidden costs
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Competitive Intelligence and Advantage
Competitive intelligence (CI)
implies what doing
of
and activities
initiatives use some outside sources of data
included in the analysis
They often availabIe from third-party vendors
projects and DW becoming
important weapons in sustaining competitive
advantage
10
Successful Business Intelligence Implementation
. The fundamental reasons for investing in must
al igned with t he company's business
must as way to change the the
conducts business improving its business
processes and decision-making processes to
data driven
The systems use large volume of stati c data that
extracted, cleansed, and loaded into DW.
successful impl ementat ion shoul d fulfill the users'
needs:
and analysis, to monitor t he business and its
performance and to understand of why t hings happening.
receive alerts in real -t ime, about changes in data the
availability of relevant reports, etc.
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3
Business intelligence is aimed at providing answers to
questions related with why, what, how, when.
Sample questions:
Finance: What is the net income, expenses, gross profit, and net profit for
t his quarter,
Accounts: What is the sales amount this month and what is the
outstanding pending
Purchase: Who is the vendor to contacted to purchase products?
Production: How products manufactured in each production unit
daily, weekly, monthly?
Sales: How products have sold in each daily, weekly,
monthly?
Quality: How products have defective daily, weekly, monthly,
quarterly, yearly?
Service: the customers satisfied with the quality?

Meta Data
Ease of Use
Response Time
Validity of Data
Uptime
Quality of
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Jti! Categories Intelligence Tools
Query and reporting tools
On-line analytical reporting (OLAP) tools
Analytical suites
Data mining tools
Analytical applications

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OL TP+Repor1s
OLTP
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Tools
Tools allow the data to sliced across almost all
dimensions such as time, location, product, promotion
etc.
Tools allow analysis customer related, product
related, sales related, time related, location related,
employee related etc.
Data analyzed based important strategies
rules and goals to achieve their target
ValuabIe statistics such as sales profit in region for
the current calculated and compared with
the previous statistics
Ad-hoc Analysis and Custom Reports
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Analysis enabIes the guided exploration of informati on that pertains to
all dimensions of buslness, regardl ess of where the data is stored
Perform complex analysis quickly and easil y to get to the " why" behind
event action to improve business performance
Analyze what's driving business wi t h data organized in logical
categories such as fiscal peri ods, sales regions, and product groups
Move from level to transaction level detail to find exactl y t he
information you looking for
Explore large complex data sets using drag-and-drop techniques. Drill
down through increasing levels of detail, and view different
dimensions such as sales regi on product
View and analyze data relationships graphically and change displays
with ease. End-users easily drill down, rank, sort, forecast, and
nest information to gain greater insight into trends, causes, and
effects
User-friendly interface makes multidimensional analysis simple for all
users, regardless of their business technical level
The Windows, Web, and clients that users work within
familiar environment-maximizing ROI and decreasing training costs
i!'i: Predefined / Standard / Reports

Standard reports those reports that regularly
availabIe and produced demand schedule.
Pixel perfect reports
Web based deployment
Could scheduled
FlexibIe distribution methods (centralized access, email,
application integration, Office)
Multiple export formats availabIe (HTML, PDF, XML, Excel)
Advanced authoring capabilities (prompts, charts,
conditional formatting, automatic caleulations,
programming required)
Ad-hoc Reports
Ad-hoe reports usually done time in response to
speei al need.
tools and code and the effort is focused time-based

rarely do you build application for ad hoc piece of work.
spaghetti code is - it works, but has not optimized
l
When the ad hoc is asked for than - it
beeomes occasional report.
After three times - you need t o begin asking if it wil l
consumed regularly - and if so, it ti me to
rewrite optimize.
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5
Performance Indicators
Performance Indicators list of measurements
that identified as critical factors in achieving
organizational goals mission.
KPIs often associated with number of business
activities such as Customer Relationship Management
(CRM), Supply Chain Analytics other activities within
t he organization.
Examples of KPIs:
Regional sales sales person
Supply chain statistics supplier
Productivity units
Customer satisfaction
Customer growth
Scorecard
scorecard is applicati on cust om user interface that
helps to manage organization's performance
understanding, opti mi zi ng, and ali gning organizational
units, business processes, and individual s. I t provi des:
easy-to-understand, summarized, at-a-glance data for the
managers and top offici al s about present and past performance.
also internal and indust ry benchmarks, goals, and targets that help
individual s understand their contributions to the organization.
The performance management should span the
operational, tactical, and strategic aspects of the business
anrl its decisions.
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Although there number of factors which the success
of only certain factors should selected as key indicators.
KPIs should give high-Ievel, real time information to top level managers
enabIing them to focus the success of the
The number of KPIs should kept to minimum in order to allow
focus each of these indicators.
The important factors to considered in selecting as
foliows:
should quantifiabIe in terms of numbers
Reflect the organizational goals: should drive business
towards success
ActionabIe: It should help the managers to initiate some business
action as result of analysis and lead
Scorecards
Scorecards help align teams and tactics with strategy, communicate
goals consistently, and monitor performance against targets
Scorecards al lows managers to set metrics targets and monitor
them to see their impact every department.
Scorecards organized in different ways depending the
objective:
status to focus performance
owner to understand accountability
strategy to measure against the corporate strategy
Scorecards use three and fi ve-state status indicators and
pl anned vs. actual data to reveal progress against targets
The methodology derived from best practi ces
external industry met hodology.
For example, the term "Balanced Scorecard" is speci fi c reference to
the Kaplan & Norton methodology.
6
Sample Scorecard
Balanced Scorecards
Provides comprehensive view of business focusing not
only financial outcomes but also human issues (e.g.
customer knowledge, internal business processes and learning)
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Balanced Scorecard
The Balanced Scorecard is of the prevalent methodologies in
use today. It was developed two Harvard Business School
professors, Kaplan and David
The Balanced Scorecard includes methodologies for defining strategy,
objectives and goals and developing metrics to measure execution
against the strategy.
The approach is based the idea that to understand performance,
organizations need balanced model that encompasses range of key
internal and external indicators, as well as the related performance
drivers and outcome metrics that describe the cause-and-effect
relationships behind the strategy. It gives " balanced" view of
performance against plan offering balance between and
long-term objectives, desired outcomes and performance dri vers, and
" hard" and "soft" objective measures.
Sample Balanced Scorecard
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dashboard is application custom user interface that
helps you measure your organization's performance to
understand organizational units, business processes, and
individuals.
Conceptually subset of scorecard, it focuses
communicating performance information.
100,000
Just like automobile dashboard, it has meters and gauges that
underlying information.
visually the key data in
time, friendly that understood
instantaneously.
dashboard also have some basic controls knobs that
provide feedback and collaboration abilities.
Dashboards
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Communicate complex information quickly. They information
from various corporate systems and data into visually rich
using gauges, maps, charts, and other graphical
elements to show multiple together
Communicate business and relationships: trends,
rank, part-to-whole, deviation, correlation
Conditional formatting and exception highlighting draw users'
attention to sub-par results and areas that need immediate attention
Eliminate the need to go through several reports.
Present clear about how is in its
critical areas
Business users at every level receive the information they need to
make better decisions t hat improve business
Operational Dashboards
Track operational processes with continuous data
refreshes
Monitor operational processes as they happen
Provide immediate visibility into key performance
indicat ors (KPIs) for corrective action and rapid decision-
making
exception-based decisions with alerts

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8
Operational Dashboards
Operational Dashboards track mission-critical operational
using detailed data that is refreshed frequently, where the emphasis is
monitoring, more than analysis collaboration
Layer:
Graphs , symbols and
that users 10 monitor
averatl
glance
Middle Layer:
Dimensional views of data
that uses navigate and
filter 10 analyze causes
Tactical Dashboards
8ottom Layer:
Detailed data that highlights
the impae! of performance
and enabIes users
10 take action
Tactical Dashboards track processes projects where the
emphasis is They
portals data marts warehouses where data
is updated weekly
Layer:
symbols and colors
that users 10
overall performance
glance
Middle Layer:
Dimensional view5 of data
that uses navi gate
fi1t er 10 analyze causes
Bottom Layer:
Oetail ed data that hi ghli ghts
Ihe impae! of
probIems and enabIes users
10 take action
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Tactical Dashboards
Run against data marts data warehouses to track
departmental processes and projects
Monitor performance daily, weekly, monthly basis
Provide visibility into performance of departmental
activities, processes, and projects
St rategi c Dashboards
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Monitor execution of corporate strategic objectives at each
level of the organization
Track progress against strategic corporate goals
key connections among departments and cause-and-
effect relat ionships between across departments
Support management met hodol ogies including Balanced
Scorecard, TQM, Six Si gma, etc
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9
Strategic Dashboards
Strategic Dashboards monitor the execution 01 strategic objectives each level
01 the organization using cascading scorecards, where the emphasis is
collaboration, than analysis monitoring They often deployed using
lormal methodology.
Layer:
Graphs, symbots and
that to monilor
overall performance
glance
Middle Layer:
Dimensional views cf data
that uses navigate and
10 analyze causes
Analytical Suites
Bottom Layer:
Detailed data that highlights
the impact of performance
probIems and enabtes users
10 take action
Enterprise business intelligence toolsets:
- query, reporting, and anal ysis tool
that runs robust appl ication server
- toolset tightly integrates query, reporting, and
analysis capabi lities within si ngle tool
- Shares common look and feel
Business portal s:
- toolset wi t h Yahoo-like user interface
- FlexibIe repository handles structured and
unstructured dat a objects.
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Advanced Analytical Tasks
Comparative and relative analysis
Exception and trend analysis
Time series analysis
Forecasting
What-if analysis
Modeling
Simultaneous equations
Analytical Applications
Packaged analytical application has predefined:
- Extraction feeds and transformation routines for
specific data source
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- Data model, application-specific report templates, and
custom end-user interface.
Custom analytic applications workbenches that enabIe
developers to quickly create analytic applications from
coarse-grained components, including user interface
widgets, data access and analysis components, and report
layouts.
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-r Definition of Data Mining
Data mining is the exploration and analysis of large quantities of data
in order to discover meaningful patterns, trends, relationships, and
rules that used to predict future behavior.
Data mining is also known as:
Knowledge discovery
Data
Data harvesting
Used to replace enhance human intelligence scanning through
massive storehouses of data to discover hidden correlations, patterns,
and trends, using pattern recognition technologies and advanced
statistics
Data Mining Tools
facts and data
Finds
Determines rules
Retains and reuse rules
Presents information to users
take hours
Requi res knowledgeabIe people to analyze the
resul ts
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1. Use of Data Mining
- - --,--,--
Customer profiling
Market segmentation
Buying pattern affinities
Database marketing
Credit scoring and risk analysis
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Trends in Business Intelligence
Growth
Data (scope, depth)
Integration
Users (broader scope)
Complexity (higher number of processes, to operational processes)
Decrease in Data Latency
Faster and t imely information
Higher availability of data
Easier to Use Data
sophisticated tools enabIing
and integrated Metadata
and predictive models
Analysis done against richer set of data and at granular level
Web del ivery of information
Except ion
Increasing integration of the Data Warehouse into operational processes
Arch itecture
focus Data Quality, Data Governance and Data 5tewardship
Centralized architectures
Data Consolidation
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Performance Management
D".f".,m",nr" management is the business strategy and methodical
process to manage execution of organisation to set of
goals and stakeholder objectives.
Simply speaking, performance management uses both methodology and
technology to help manage your organisation aligning execution
with strategy.
With the continual loop of insight provided performance
management solutions, organisations easily manage their ongoing
effectiveness to improve overall performance against their goals and
objectives.
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- Corporate Performance Management
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-Il!jr! How Does Business Intelligence fit in?
Performance management and business intelligence often
confused because they closely related.
Think of performance management as the next generation of business
intelligence.
Business intelligence helps organisations measure and monitor their
performance to understand organisational units, business process, and
individuals,
whereas performance management helps organisations manage the
business comparing the measurements derived from business
intelligence against pre-defined goals and objectives.
Business intelligence = measure and monitor performance
Performance management = motivate, measure, monitor and
manage performance against pre-defined goals and objecti ves
Level ofuse
Strategic (Examples: Balance scorecard, Strategic
Planni ng)
Who: strategic leaders
What : formulate strategy and monitor corporate performance
Analytical (Examples: Financial and Sales Analysis,
Customer Segmentat ion, Clickstream analysis)
Who: analysts, knowledge worker, controller
What : ad-hoc analysis
Operational (Exampl es: Budgeti ng, Sales f orcasting)
Who: operati onal managers
What: executi on of strategy againts obj ectives
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Vendors
SI' ..
Project Lifecycle
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Business lntelligence lmplementation
framework for planning is necessary
precondition
At the business and organizational levels, it is important
to define strategic and operational objectives while
considering the availabIe organizational skills to achieve
those objectives
Upper managers must build enthusiasm for those
initiatives and procedures for the intra-organizational
sharing of best practices
Plans to the organization for change must in
place
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Organize Skills in Competency Center
Link
Business
Ski ll s
Alter
Prioritize
and set
Implement
changes
Store, maintai n,
data
ITSkills
52
13
BICC
1 competency should develop and focus the needed to
successful with BI.
They should manage the not as initiative that provides
basic for but as initiative
encompassing wide of and It should:
guide the users in self-service with to tasks (such as
management reporting and simple analysis)
perform ad hoc and difficult analysis themsel ves (until they repetiti ve)
dupl ication of effort initiatives the
Competency develop overall plans and for BI,
define the (including data quality and governance), and help
how should interpreted and applied to
business decisions.
of the competency should
to the CFO main executi ve; have mandate
stabIe and fiexi bI e size.
The Scope of Depends
Scope
Degree of Governance 81 Competency Center
0%
t
Special-purpose
BI applications
t
Departmental BI
appli cations
and

t

BI applications
Multiple
departments and
data
100%
t
Corporate BI
applicati ons
53
55
Competency Multiple
PossibIe
81 as Department Virtual 81

= Competency center
ICC = Integration center
The Scope of Depends
Scope
54
In supporting corporate applications that set the
analytic framework (for example, around customer
segmentati on), the competency center has 100 percent
governance. Uniform definiti ons, visualization and
distribution crucial.
In department al applications, the competency center
has reference role, assessi ng t he extent to which
departmental pl ans fit into the overall framework with
which they need to compl y.
There speci alist applications over whi ch the
competency center has governance.
Finally, the competency center involved as
consultant, where the most the competency center
do is seek leverage with the rest of the organization.
56
14
Where to Place the Competency Center?
PlanA:
Report 10 Ihe business
(in

Plan
Report 10 Ihe CFO
(only if
financial conlrol 10
m,.
Core bu$iness
I
Plan
Report 10 Ihe
(if IS has Ihe
only
CIO
I
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The Project Is Managed Using
Methodology
...........
project team, including those
driving the tool selection process, need
to understand the overall methodology
and how each other's stepsjroles
interrelate.
The methodology ties together the
phases, steps, rol es and skills required to
successfully develop, deploy and evolve
data warehouse and project.
...
..........
Where to Place the Competency Center?
Determining where to house the competency center is difficult issue.
The best solution is to house it as close to the business as possibIe.
In marketing-driven it cauld under the chief marketing officer
in manufacturing it could under the chief operating officer.
Although optimal from business perspective, it raises some issues. The key point of
the competency center is that it is only effective when it has cross-functional reach.
corporate cultures, housing it in certain part of the organization inhibits other
parts of the from using it. would serious mistake.
The other option is to place the competency center under the as the financial
function within spans all business areas. This will only work when the
understands the situation - where the financial function has matured from financial
accounting to management accounting, and from financial control to management
control. If the accountants still think all of the information could possibIy want is to
found in the general ledger, it won't work.
As last resort, the competency center could report into the This is not optimal
from business point of view, but, with the right skil ls and mind-set of the organization,
it might the only alternative.
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Methodology Used to Coordinate
Roles
Primary Secondary
1. Defi nition
BI and
Users
2. Data ID and IT BI
Tool Evaluati on and BI Users and IT
Selection
4. Develop, Implement, IT Users and Tech
Train SUDDort
5. Discovery and Exploration
Users and IT
BI
6. Monitor, Analyze
Users Tech Support
7. Devel op Decision Users Tech Support
8. Share and Coll aborate Users Tech Support
9. Effect Change Users BI
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Tertiary
Users
BICC
BI
BI

15
Methodology Used to Coordinate

The BI competency center works closely with the data
warehouse team.
The Competency needs to work with several other
groups within the organization as project moves from
development to deployment.
The roles of these additional groups and their
responsibilities and time commitments need to mapped
out in advance.
If t here isn't direct reporting relationship between the
groups, the deliverabIes from those involved need to
spel led out in their performance plans in order to achieve
accountability.
Applications: Build Buy?
Several studies of organizations in the U.S. and Europe have
indicated that they intend to adopt packaged applications
exclusively, rather than rely internal development. This trend is
slightly troubIing because it suggests t hat organizati ons wil ling to
contract for extensive customizations to meet specifi c needs alter
their business practices to match the packaged application. Neither
approach is good solution.
trend toward developing applicat ions internally externally is also
troubIing. There well suitabIe packaged applications t hat will
fit into estabIished strategy, and that would cost-
effective and t imel y t han new development.
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Organizations need to develop strategy for and to always conduct
balanced "build vs. buy" analysis before taking decisions. AII
three opti ons - that is, packaged applications, Internal development
and external development - have unique strengths and weaknesses,
and equally viabIe given the appropriate circumstances. achieve
high marks for all of the estabIished the costs would
equivalent, regardless of the option selected. The sole difference
would where investments would made to compensate for the
solution's shortcomings.

Applications: Build Buy?
Industry Best Practice
I
Packaged
Applications

Internal
Development
D
External
Development
Abilily 10
Deploy
Rapidly

Integration
Flexibili ty and Agility
Mul t iple Vendors Competing for
Functionality and Driving Convergence
Issue - Overlapping:
Functional ity
Metadata
Admini st rat ion
Securi ty
Web
Services
81 Suites
Smart
Enterprise
Suites

Ad Dashboards Personalization
Repor1ing Search
Visualization Collaboration Content
Workftow Management
ETL OLAP
Management
APIs
Analytic Applications
Statistics
Analytics
Data Mining
81
Platforms
API = Interface
Warehouse
Cubes
DBMS
Enterprise
Applications

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16
Strategic Maturity: Where You?
Tactical
Level
Strat"gic
Level
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Tactical Guideline: The 81 maturity organization wi1l determine to what degree and
scope it will to leverage 81 and close the 81 gap. Think 81 as evolution
delivering key decision-making information throughout the enterprise, rather than as
i I 'ni i i .
Conclusions
'The business pressures driving will accelerate.
competency center and strategic plan needed to
succeed with .
Technology advancements will impressive, but
shared vision and culture for will required before
they leveraged fully.
Emerging market dynamics will provide product
and service choices, but will make selection
complex.
Organizations that apply "best practices" to will find it
attainabIe to fully absorbe into their daily work -
when all users have access to the insight that they need
to out their respective roles, and when information
is uniform and consistent across the organization.
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