Managment information system - Research Paper Example

Using Proper Business Intelligence In order to make rational and quick decisions in business, it is crucial to possess quality information. However, new technology comes at the risk of burdening decision making with inconsistent, inadequate, and irrelevant data. New technologies, for many organizations, are leading to an overload of information that could leave decision makers with information that is misleading. In fact, the numerous methods of the retrieval and processing of information normally causes information that is not relevant to tie up the organization’s resources. However, it is possible for organizations to provide decision makers in management with raw data, which is automatically consolidated and processed. This data is given to them in a manner, which is understandable and easy to work on and these organizations are able to provide their decision makers with insightful information. These organizations utilize business intelligence processes and capabilities. This is a field of research, which is focused on the practical, in addition to, theoretical aspects, for organizations to achieve good information for them to make solid decisions. This research paper will seek to study this experience in, as well as how it helps organizations to shape data processes to get the correct information for quick and rational making of decisions. Objectives of the Research Study Find out what business intelligence is Find out the advantages that BI endows organizations with Find out the phases of implementation for business intelligence Find out the role of the Chief Information Officer in BI implementation Find out the best way to choose the tools of BI and the implementation partner Business Intelligence Business intelligence deals with the specific field of the processing and consolidation of data to retrieve information needed, for an organization, to make correct decisions. The main objective of this process is to give the correct knowledge, through various solutions, at the right time and to the right personnel (arizona.edu 1). In order to do this, it is essential have the correct mix of data collection methods, structures of data, data architectures, IT systems, and responsibilities to give meaningful information. When it comes to key performance indicators, or KPI, business intelligence has an impact that is proven. For instance, Return on Equity, or ROE, climbs to twice as high as it is in organizations that use tools for performance management widely as compared to organizations in the same industry that do not use them. In addition, over 60% of executive managers have said that using tools for performance management has a positive impact on the value for shareholders (arizona.edu 1). When most of the companies studied are assessing their business intelligence capabilities, they consider four levels. The first level is reporting, which is a core functionality of tools used in business intelligence, especially since its objective has to do with the creation of standard and recurrent reports in a manner that is user friendly, effective, and efficient (arizona.edu 1). By nature, reports are static and predefined and are generated through an end user request or periodic refreshing via automatic schedulers that can be uploaded on servers in the intranet or shared drives that are accessible to corporate users. The department’s key functionality, therefore, is reduced to consolidation and aggregation of data in an ideally automated and repetitive approach from sources of data that are trusted. The second level for the organizations is dashboards, which contain aggregated and high level strategic organizational data that is also inclusive of consolidated performance indicators and comparable presentations (arizona.edu 1). They are inclusive of interactive and static reports with the data being translated into illustrations, gauges, charts, and graphics to make communication simpler with regards to complex topics. The dashboards allow for primary interactions and provide different detail levels meant to get increased insight. The explanatory power of the dashboards, however, is mostly reliant on the interpretations of the user. The third level for the organization is an analysis, at which level business intelligence systems are able to give the users consolidated information that they can filter and detail, but also provide trend analysis and forecasts for the development of new insights whose basis is on raw data (arizona.edu 1). The fourth and last level of consideration is analytics. At the highest BI level is an intelligent and automated data analysis that is grounded on sophisticated logic and systems (arizona.edu 1). The business intelligence system is based on functions that are powerful yet user friendly, they are able to retrieve insights and hide the data interpretation complexity that underlies the process. Simulation functionality and scenarios are able to provide tailored and advanced support for decision-making. The essential basis of all systems in business intelligence has to do with the database that it operates on. Primary systems are focused only on corporate financial data with the more advanced systems interconnecting between external and internal sources with quantitative and qualitative data. Advanced systems are able to process comprehensive sets of data using methods that are tailored to the needs of the organization with condensation of findings into knowledge that is meaningful (arizona.edu 1). This involves hiding the process’ complexity, as well as the selection of only the maximum input that is needed to aid executives in decision-making. Advantages of BI When an organization is analyzing its solutions of BI, it is vital for them to consider the benefits it will have on their business, such as in improved making of decisions and enhancement of efficiency for reporting and analysis of business. BI offers various prerequisites for good decision-making (iu.edu 1). Reports are given in a format that is user-friendly; information can be analyzed more easily through the use of functionality that is in-built, there is consistency of data across company units, and also avails all required information. A BI solution that is well designed ensures that information in the organization can be attained in a reliable and consistent way. It is also possible to aggregate and compare figures in different units of business, ensures that management reports give top management and leaders the information required to properly steer their business (iu.edu 1). Fundamentally, business intelligence is able to improve on the business side and the IT side of the company (iu.edu 1). With regards to IT, employees are not required to do recurring tasks in the creation and change of reports since the end-user can create and change reports on their own. On the business side, time spent in the preparation and analysis of data is reduced since management reports can be created from the dashboards directly. The data contained in these reports are not only more recent, credible, and up-to-date, but also easier to handle and decipher. More importantly, it is also possible to download the information onto smart devices like iPads and iPhones (iu.edu 1). Phases of Business Intelligence Implementation Successful implementation of corporate, business intelligence possesses three stages. However, first, it is important to start by considering the requirements of the business, especially because any project that is triggered technically normally fails. Phases of BI solution implementation Phase One The first phase involves the definition of necessary KPIs on management dashboards. The key activity is the definition of KPIs and future reports that normally result in the elimination of various existing reports since most are not necessary and are not reflective of the objectives set out by the organization (Gameiro 1). Next, availability of data is assessed so as to calculate the defined key performance indicators with a sound basis of data being crucial to the success of the system’s implementation. The organization should seek to minimize external tools that connect to data warehouses, as well as any additional calculations. In addition, the layers of business intelligence systems must be evaluated to define the areas that need addressing, as well as the identification of particular parts that need elimination. Phase One Tasks Make Recommendations It is essential to clarify the areas that the project will cover in the beginning; for example, if it will cover finance KPIs or may also cover supply chain management. In addition, it is also vital to consider if the project will integrate other specific business lines, departments, or functional areas in the business’ operations (Gameiro 1). Often, customer relations and HR are the other candidates in the improvement of finance business intelligence and integration of more business. Because logistics, production, and manufacturing KPIs are different to finance KPIs, linking them to operations is harder. Even where the business lines are similar, there are slight differences in KPIs since they are representative of different models of business, for instance, production of intermediate products internally and final product production externally. If the analysis of operational KPIs is a strategy for the long term, then it should be addressed at the beginning (Gameiro 1). When the questions are answered, then the organization can enter the second phase. Phase Two This involves the creation of a navigation and design prototype and the development of a proof of concept. After four tasks in the system implementation preparation, the proof of concept is the result (Gameiro 1). This is designed prior to the start of comprehensive implementation. Software vendors are selected at this point, which is not dependent of specific requirements of design and are normally led by requirements of the IT landscape and strategic policies. Based on rules of IT architecture, the organization can devise a short list for the selection of appropriate tools that fit their IT landscape, IT strategy, and their requirements. Tasks in Phase Two This phase involves the collection of requirements with regards to functionality of future tools, as well as tool functionality, dashboards, and report design (Gameiro 1). A pure dashboard for management cannot be used in place of external or internal reporting and should be taken as a second channel with different detail levels. All management dashboard tools give a functionality of reporting that is used for printing out of content on dashboards. Replacement of complete paper based reporting needs increased effort since the detailed design of all single pages is given up-front. The report layouts and screen design of the dashboards that cover all content, which has to do with comparisons of historic numbers are defined prior to handing over a detailed concept for implementation to system integrators. Screen realization and corresponding visualization of key performance indicators are the major drivers of testing and implementation of the system. For this reason, there is a need for stability. The concept proof increases the understanding of the developer with regards to the needs of the company prior to implementing the real system. A prototype lets the organization check all pre-selected tools design, as well as test the solution provider’s capability (Gameiro 1). Finally, the requirements of the organization can also undergo testing and could be even challenged. Phase Three This is the implementation stage and because of management awareness and high visibility, implementation of the project needs to be quick and offer fast solutions (Gameiro 1). A plan for release makes sure that initial results are given quickly, and the comprehensive and final results are made in various steps, aligned with availability of data and reporting cycles. The initial release should ensure that all dashboard features required are provided, and the reporting requirements are sequentially delivered. Normally, the initial release does not have the full set of data. One fundamental activity in a business intelligence project has to do with cleansing of data already in existence and the establishment of a process meant to record new data properly, which needs the development of the entire architecture of data, such as formulas, hierarchies, and dimensions. Interaction between business departments and system providers is important to the project’s success (Gameiro 1). Dashboard management fulfills functional and design needs since it gives the management clear visibility and ease of use. While not all the KPIs are included when the projecting is starting, they are given throughout the other steps. The Role of the CIO and Governance In a business intelligence project, the CIO and corporate IT act as the moderators between the IT group, business departments, and the software implementer. The finance department is the main driver of business intelligence projects as they are its main users in corporate management and corporate reporting (Vedder et al 1). In addition, the main key performances indicators are defined by finance at the corporate level. This ensures that there is standardization across all business models in the organization. The operational key performance indicators are standardized to make sure that the top management gets consistent content. The Chief Operating Officer takes over the definition of key performance indicators through the provision of information about the quality, availability, and sources of data. Usually, they begin their analysis with how BI tools can fulfill high-level business needs. The project also involves the definition of future business, intelligence governance. Usually, this means the establishment of business intelligence excellent centers, which are headed by the finance department (Vedder et al 1). The CIO should be part of the board on change advice, which evaluates and assesses requests of change based on the system solution’s capability. Making the Choice on Implementation Partner and Tools Making a selection on business intelligence tools involves following several guidelines like system landscape, corporate IT strategy, and major requirements at BI level. Estimations by market analysts and researchers can be utilized as support documents, although they are too general. Because of this, they cannot be adapted in order to meet the specifics of a company (Marshall et al 1). The software implementer and the software vendor, in a majority of the cases, are the same entity since few firms have the ability to offer full BI suites that are somehow connected or integrated to the ERP systems like Oracle and SAP. An evaluation template and questionnaire that is organization-specific allows for effective and efficient gathering of fundamental needs. The major points for evaluation need to be given before with the software providers who make the shortlist afford them enough time to prepare a presentation on tools, as well as for complete answers to the questions (Marshall et al 1). It is possible to execute the process of selection faster if the requirements are clearly described and documented. Rough prototypes for the demonstration of vital navigation functions should aid the organization and the vendor to comprehend desired outcomes, as well as manage the organization’s expectations. It acts as the basis for later detailed concepts and design that contain each requirement’s description. These documents are most relevant in the build up to kick off and implementation for the phase of system implementation (Marshall et al 1). Conclusion A proper business intelligence solution is required in the world today. Organizations in every sector are now using business intelligence in order to make their decision making more successful. These organizations are able to defeat their competition, as well as identify opportunities for the optimization of their operations. They are also able to reduce manual-resource needs, as well as the rededication of individuals to data analysis and preparation of memos decision. Organizations, therefore, should grasp BI’s true potential and take action as fast as possible since time is of the essence. Works Cited arizona.edu. Business Intelligence - Benefits. 2013. Web. 23 June 2013 . Gameiro, Carlos. Implementation of business intelligence tools using open source approach. 2011. Web. 23 June 2013 . iu.edu. The Benefits of BI. 2012. Web. 23 June 2013 . Marshall, Byron. McDonald, Daniel. Chen, Hsinchun. & Chung, Wingyan. "Collecting and analyzing business intelligence information." Journal of the American Society for Information Science and Technology (2012): 873–891. Vedder, Richard. Vanecek, Michael. Guynes, Stephen. & Cappel, James. CEO and CIO perspectives on business intelligence. 2012. Web. 23 June 2013 . Read More