Business Intelligence - Fundamental Concepts and Principles - Case Study Example

Name : xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Tutor :xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Title : Business Intelligence – Fundamental Concepts and Principles Institution : xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Date :xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx @ 2012 Table of Contents Background Concepts & Definition Terms………………………………… 3 History of Business Intelligence……………………………………………… 3 Purpose of Business Intelligence……………………………………………… 4 Management aspects…………………………………………………………. 5 Major tools……………………………………………………………………. 6 Spreadsheets…………………………………………………………… 7 OLAP (Online Analytical Processing)………………………………… 7 Digital dashboards…………………………………………………….. 7 Data mining……………………………………………………………. 7 Business performance management…………………………………… 7 Reporting and Querying Software…………………………………….. 8 Process mining…………………………………………………………. 8 Case study………………………………………………………………………. 8 References……………………………………………………………………… 10 Background Concepts & Definition Terms Introduction Business intelligence (BI) is viewed as the organizational ability to create knowledge out of all of the capabilities it has (Heaton, 2012, 08). The information created is enough to be used in developing other new opportunities. When these opportunities are identified and a proper strategy implemented there can be stability in the industry of the organization accompanied by a competitive market advantage. Business intelligence technologies bring about historical, present and future views for business activities. Business intelligence technologies have various functions such as online analytical processing, reporting, prescriptive analytics and complex event processing among others. Business intelligence has the major purpose of supporting better decision making processes within an organization. Business intelligence makes use of applications, technologies and processes to do the analysis of business processes and structured data within the organization (Sabherwal, Becerra-Fernandez 2010, 30). History of Business Intelligence Business Intelligence started with decision support systems since the 1960s and it developed all through the 1980s. Decision support systems (DSS) started with the computer assisted models that were developed to help in planning and decision making. From the DSS there came data warehouses followed by executive information systems then OLAP before business intelligence appeared on the scene starting in the late 1980s. In 1989, Mr. Howard Dresner who later became an analyst with the Gartner Group suggested that the term “business intelligence” be used to refer to the methods and concepts that can be used to better decision making in businesses by use of support systems based on facts. His intention was to popularize the concept using some methods and concepts using data resources (Larson 2012, 99). However the use of the term “business intelligence” only spread out widely during the 1990s. Both the 20th and 21st centuries are referred to by many as the age of information and technology. This means that all things depend on information and technological innovation (Rockoff 2011, 14). Any good business strategy needs technology and information in order to develop. It needs business intelligence concepts that can be used in managing information. Before the realization of the information age it was not easy to get information without computing methods. This meant that business decisions had to be done through intuition. With the coming of globalization business intelligence has become more and more acceptable to many more people. This happens because organizations are growing and this growth demands that they get information necessary for business promotion, understanding market dynamics as well as the position of the organization relative to their competitors (Jorgensen, Stacey, Knight, LeBlanc, Schacht, 2011, 93). This accounts for the widespread adoption of business intelligence concepts in today’s business world. Looking at the historical dimension of business intelligence shows that the concept has only developed in the recent past to be used to facilitate decision making in business operations. Business Intelligence technology helps to obtain information from data and turning it into knowledge to be used to create innovating strategies for business. As competition grows within the market organizations are being forced to embrace business intelligence in order to know the economic trends and the business operations (Haertzen 2012, 45). Purpose of BI Business intelligence as a term is used to describe the process where knowledge and information are gathered by way of analyzing data for business. Business intelligence has the purpose of helping to facilitate better decisions in business as well as making use of the knowledge obtained concerning the business and its operations. There are three major tasks that business intelligence is concerned with. First, business intelligence purposes to collect required data concerning the business. Data is gathered when the process has been automated. Some years back, data gathering was a very costly and time consuming (Loshin, 2003, 113). However, computer systems of the present age have made it easier to gather data from many different sources (Ralston, 2011, 54). The second purpose of business intelligence is the analysis of the data gathered and to obtain information from that data. After information has been obtained from the data it is then converted into business knowledge. The final purpose of business intelligence is putting the knowledge into business operations to better the business (Knight, Knight, Jorgensen, LeBlanc, Davis, 2010, 116). Business intelligence avails information to decision makers for them to use it in arriving at informed decisions. The BI system delivers this information through reports. The business intelligence system has interested parting and their various needs for information, input data, storage data, analysis data and selective information dissemination that is automatic. A system of business intelligence has the architecture or rules that provide the framework for organizing platforms, technologies, gateways, people, databases and processes. Implementing architecture requires prior implementation of infrastructure. Infrastructure for this technology includes the databases, the people, processes, gateways and technologies that bring functionality into the architecture in the organization (Sauter, 2010, 44). Managements Aspects Business intelligence is very critical to management in an organization because it adds value to the process of decision making both for unstructured and semi structured decisions. When management is analyzing a BI solution it considers the benefit in overall decision making among other benefits (Mann, Rivel, Barley, Pletscher, Ismaily, 2011, 78). Business Intelligence provides prerequisites for making decisions such as the availability of necessary information, consistency of data in all units of the organization and user friendly method of report presentation. For semi structured and unstructured decision making, business intelligence ensures that there is information within the company in a reliable and consistent way. BI enables the aggregation and comparison of figures in various business units. This confirms the level of validity for like-for –like comparison of data. BI assures the management reports give leaders of operations and the management with necessary information for steering the business in the right manner. Business Intelligence brings an improvement in the efficiency on the side of information technology and business. Decision making becomes easier and more effective for management because on the side of information technology workers do not continue to create and change data reports which consume time (Scheps 2008, 37). In business the organization spends lesser time in analyzing data and preparing it because the reports that the management needs to make decisions are developed directly in the business intelligence dashboards. The data and information obtained through the business intelligence technology is very much up to date and credible and the management can read it easily and handle it with more ease. Downloading this information on smart devices is also possible. For management to make the best decision, they require reports that give information that makes them to understand their organization and the world as well. This information is better obtained through Business intelligence systems. Business intelligence systems have been proven to aid the management teams in the making of quality and effective decisions that are timely. This is crucial to the growth and success of any organization (Malik, Sistla, Wright, 2010, 12). Major Tools Tools for business intelligence are technologies and applications that are used in gathering, storing and analyzing to aid the business in arriving at the best decisions. These tools have an intelligence information system that makes use of data marts and data warehouses to obtain data on production, about the organization, its environment as well as data on economic matters (Liebowitz, 2006, 29). Business tools help in analysis for investigating new opportunities and exceptions. So that a tool may have its productivity increased the tool should be matched with the segment and user. Major business intelligence tools include: i) Spreadsheets These are computer applications used in business intelligence. Spreadsheets have the method for calculating the cell content. Spreadsheets include Apple numbers, Visicalc and Gnu Numeric. Microsoft excel is however popular than the rest. They are all used on tracking of goals and other business operations (Van der Lans 2012, 88). ii) OLAP (Online Analytical Processing) This tool helps in the data slicing and dicing. The tool makes use of a model of multidimensional data called hypercube. It stores and manages data so that information can be obtained on which action can be taken (Garg 2012, 66). iii) Digital dashboards A digital dashboard is a user interface information system that is important in tracking the progress of the business that the organization is monitoring. The user can be able to follow the high level process that he can sought out to arrive at low level data. Common dashboards include the widget which is a desk top application and stand alone software. iv) Data Mining Data mining is used in the analysis of data from various perspectives which is then summarized into important information. Big relational databases can be used to get the patterns and correlations in order to ascertain the effect on the organization (Vasilieve, 2010, 142). v) Business Performance Management This refers to a collection of processes used in organizing, automating and analyzing the intelligence, the methodologies, the processes and metrics of business. Many open source and BI propriety products exist on the market. Common open source products are Rapid Miner, Jpivot, Weka and Pentaho Open BI among others. Businesses make use of Microsoft propriety products like SAP, SAS, IBM and Oracle among others. vi) Reporting and Querying Software These soft wares act as tools for extracting, sorting, summarizing and selecting the data. Many open source software in use today include Jasper reports, Pentaho and Agata report and commercial tools such as Oracle XML publisher and micro Strategy (Vitt, Luckevich, Misner, 2008, 31). vii) Process Mining With this tool, knowledge is obtained from event logs that an information system records such as the audit trails in the workflow system of management. Process mining makes use of tools such as ProM Import and ProM (Czernicki 2010, 22). Case Study This is a case study of Wiggin which is a boutique media firm in the UK that provides specialist service to a specific sector. The company focuses on the media sector and its success has been determined by margin and getting to retain the big clients within the sector. Previously, the firm measured its profits through a model it had created that brought a tradition in the partners that identified major drivers of profitability that made profitability a major indicator for performance (Banister 2009). The problem with this system was that it needed a lot of support form the finance department in order to prepare them. This made it hard for the system to assist in making timely important decisions in the business. The management was battling problems brought about by human error. This made them depend on assumptions when trying to tackle expansion, clients that perform below expectations, practice area development, reward and pitch estimates. The firm met many problems trying to serve its purpose and maximize its profits (Banister 2009). Prompted by the desire to excel in decision making, the firm decided to study the market to find out about the available products to tackle their problem. Business intelligence was not established in the UK by then. However many companies were adopting the concept of business intelligence. Wiggin stumbled upon the Redwood product which was sophisticated and being used widely in the United States. The management realized that the products were suitable for helping their law firm make profit. They took the product and embarked on the implementation process. Redwood is based on data warehouse that makes use of many modules that capture data. The management makes use of business intelligence to track the performance of the firm from different dimensions (Banister 2009). With the use of the new system, the law firm has realized immediate benefits that are very much motivating. The firm uses the billing and collection tube to examine debtors and measure how consistent they are in paying back. The information obtained helps to manage the cash flow of the firm in a more accurate way. It makes them give priority to the efforts made by their credit control department and hence increases the speed of collection (Banister 2009). The outcome is that they have a debtor turn a round duration of over 40 days which is better compared to the days when the Redwood technology was unknown to them. The system itself and the information obtained through it have been of help in bringing about improvement and improving the quality of decisions made. Since the firm decided to incorporate business intelligence in its operations it realized a change in its operations. The problems it was fighting with that often brought human error are no longer an issue. The management makes decisions without depending on assumptions when tackling various issues. Assumptions were unreliable and they often brought losses. The firm is on an upward trend and its decisions are made smoothly and this works as a major ingredient for the expansion of the organization (Banister 2009). References Banister J. 2009. Redwood Business Intelligence Case Study. (Online): Lexis Nexis. Retrieved from http://www.lexisnexis.co.uk/pdf/case-studies/redwood_wiggin.pdf 14 September 2012. Czernicki B. 2010. Silverlight 4 Business Intelligence Software. (e-book): Apress. Safari Books. http://ezproxy.hct.ac.ae/login?url=http://proquest.safaribooksonline.com/ (Accessed 14 September 2012). Garg A. 2012. IBM Cognos Business Intelligence 10.1 Dashboarding Cookbook. (e-book): Packt Publishing. Safari Books. http://ezproxy.hct.ac.ae/login?url=http://proquest.safaribooksonline.com/ (Accessed 14 September 2012). Haertzen D. 2012. The Analytical Puzzle: Profitable Data Warehousing, Business Intelligence and Analytics. (e-book):Technics Publications. Safari Books. http://ezproxy.hct.ac.ae/login?url=http://proquest.safaribooksonline.com/ (Accessed 14 September 2012). Heaton, J. 2012. Business Intelligence Cookbook: A Project Lifecycle Approach Using Oracle Technology. (e-book): Packt Publishing. Safari Books. http://ezproxy.hct.ac.ae/login?url=http://proquest.safaribooksonline.com/ (Accessed 14 September 2012). Jorgensen, A., Stacey, M., Knight, D., LeBlanc, P., Schacht, B. 2011. SharePoint 2010 Business Intelligence. (e-book): Wrox. Safari Books. http://ezproxy.hct.ac.ae/login?url=http://proquest.safaribooksonline.com/ (Accessed 14 September 2012). Knight, B., Knight, D., Jorgensen, A., LeBlanc, P., Davis, M. 2010. Knight's Microsoft® Business Intelligence 24-Hour Trainer: Leveraging Microsoft SQL Server® Integration, Analysis, and Reporting Services with Excel® and SharePoint®. (e-book): Wrox. Safari Books. http://ezproxy.hct.ac.ae/login?url=http://proquest.safaribooksonline.com/ (Accessed 14 September 2012). Larson B. 2012. Delivering Business Intelligence with Microsoft SQL Server 2012; Third Edition. (e-book): McGraw Hill. Safari Books, http://ezproxy.hct.ac.ae/login?url=http://proquest.safaribooksonline.com/ (Accessed 14 September 2012). Liebowitz, J.2006. Strategic Intelligence; Business Intelligence, Competetive Intelligence and Knowledge Management. Taylor & Francis. Loshin, D. 2003. Business Intelligence. (e-book): Morgan Kaufmann. Safari Books. http://ezproxy.hct.ac.ae/login?url=http://proquest.safaribooksonline.com/ (Accessed 14 September 2012). Malik S., Sistla S. Wright, S. 2010. Pro SharePoint 2010 Business Intelligence Solutions. (e-book): Apress. Safari Books. http://ezproxy.hct.ac.ae/login?url=http://proquest.safaribooksonline.com/ (Accessed 14 September 2012). Mann, S., Rivel, C., Barley, R., Pletscher, J. Ismaily, A. 2011. Microsoft SharePoint 2010 Business Intelligence Unleashed. (e-book): Sams. Safari Books. http://ezproxy.hct.ac.ae/login?url=http://proquest.safaribooksonline.com/ (Accessed 14 September 2012). Ralston, B. 2011. PowerPivot for Business Intelligence Using Excel and SharePoint. (e-book): Apress. Safari Books. http://ezproxy.hct.ac.ae/login?url=http://proquest.safaribooksonline.com/ (Accessed 14 September 2012). Rockoff L. 2011. Data Analysis Microsoft with Access 2010: From Simple Queries to Business Intelligence. (e-book): Course Technology PTR. Safari Books. http://ezproxy.hct.ac.ae/login?url=http://proquest.safaribooksonline.com/ (Accessed 14 September 2012). Sabherwal, R., Becerra-Fernandez, I. 2010. Business Intelligence. Wiley.   Sauter, V.L. 2010. Decision Support Systems for Business Intelligence, Second Edition. (e-book): John Wiley & Sons. Sams. Safari Books. http://ezproxy.hct.ac.ae/login?url=http://proquest.safaribooksonline.com/ (Accessed 14 September 2012). Scheps S. 2008. Business Intelligence For Dummies®. (e-book): For Dummies. Safari Books. http://ezproxy.hct.ac.ae/login?url=http://proquest.safaribooksonline.com/ (Accessed 14 September 2012). Van der Lans R. 2012. Data Virtualization for Business Intelligence Systems. (e-book): Morgan Kaufmann. Safari Books. http://ezproxy.hct.ac.ae/login?url=http://proquest.safaribooksonline.com/ (Accessed 14 September 2012). Vasiliev Y. 2010. Oracle Business Intelligence: The Condensed Guide to Analysis and Reporting. (e-book):Packt Publishing. Safari Books. http://ezproxy.hct.ac.ae/login?url=http://proquest.safaribooksonline.com/ (Accessed 14 September 2012). Vitt, E., Luckevich, M. Misner, S. 2008. Business Intelligence. (e-book): Microsoft Press. Safari books, http://ezproxy.hct.ac.ae/login?url=http://proquest.safaribooksonline.com/ (Accessed 14 September 2012). Read More