Business Intelligence: Essential of Business

Instuructor: Bajuna Salehe

Email: salehe.bajuna@ifm.ac.tz

Web: www.ifm.ac.tz/staff/bajuna

Agenda

• What is Business Intelligence (BI)

• Origin and drivers of Business intelligence.

• General Process of Business of Intelligence.

• Major characteristics of Business Intelligence.

• Structure and components of Business Intelligence.

What is Business Intelligence (BI)

• There are number of definitions of BI: But simply put:–Business intelligence refers to the

use of technology to collect and effectively use information to improve business effectiveness.

What is Business Intelligence (BI)

• Other definitions– BI is the effective use of data and information

to make sound business decisions. OR– Business Intelligence is the process of

collecting business data and turning it into information that is meaningful and actionable towards a strategic goal.

What is Business Intelligence (BI)

• Organisations (Enterprises) may have different information systems but they’re typically not well suited at providing information to end users.

• With business intelligence, users will be able to turn this information into knowledge, and knowledge into profit.

What is Business Intelligence (BI)

• BI enables your organization to track, understand, and manage your business in order to maximize enterprise performance.

• With BI, organizations are able to improve operational efficiency, build profitable customer relationships, and develop differentiated product offerings.

Origin of BI

• The origin of BI can be traced back from the problems brought by early data process application.

• Most of these applications were not integrated. Data was stored separately– As a result organisations lack information

such as who are the best customers, what products are selling, and how much revenue was made last quarter.

• This information required the existence of historical data.

Origin of BI

• Data warehouse was eventually evolved which was used to store historical data and was part of Decision Support Systems (DSS).

• This was used for analysis in order to get information that will be useful for decision making process within top executive of the enterprise.

Origin of BI

• Therefore the core of Business Intelligence is Data Warehousing which store enormous amount of historical data.

• From data warehousing is where you start the BI process itself.– Number of forms of BI: Data Mining, Decision

Support Systems (DSS), e-business support and Data Marts.

Importance of Business Inteligence

• Business Intelligence is needed in the organistaion if:– Much time is spent for collecting data than

analysing it.– Much data is generated within the firm.– Excessive time and effort is spent to produce

management reports but they cannot be “sliced and diced”.

Drivers of Business intelligence

• According to IBM study:

The Typical Company Utilizes Only 2% to 4% of the Data it Collects and Stores.

Drivers of Business intelligence

• Leveraging existing data and information.

• Demands for increased revenues and reduced costs.

• Constantly changing competitive landscape.

Drivers of Business intelligence

• Increasing organizational complexity.

• Reduction in ongoing IT expenditure.

The B.I. Process

Cleaning & Integration

Evaluation & Presentation

Data Warehouse

Databases

Selection & Transformation

Data Mining

Knowledge

Steps Of A BI Process

1) Learning the application domain– Relevant prior knowledge and goals of application

2) Creating a target data set: data selection3) Data cleaning and preprocessing

– May take 60% of effort!

4) Data reduction and transformation– Find useful features, dimensionality/variable

reduction

5) Choosing functions of data mining – Classification, regression, clustering, etc.

Steps Of A BI Process

6) Choosing the mining algorithm(s)

7) Data mining: search for patterns of interest

8) Pattern evaluation and knowledge presentation

– Visualization, transformation, removing redundant patterns, etc.

9) Use of discovered knowledge

Cleaning and Integration

• The first process of BI concern cleaning and integrating data after being collected from databases.

• Data can be obtained from different data sources (Transactional Databases, Operational Databases, XML Data, etc).

• Data is then loaded to Data warehouse after being cleaned.

Selection and transformation

• After being integrated to have common format, the data is selected and transformed (optimized) for analysis and reporting.

• This is where data mining is involved.

Evaluation and Presentation

• Using data mining tools and algorithms the selected data (data) set are analysed and evaluated.

• Important knowledge (actionable information) is discovered and presented using visualisation tools.

Characteristics of Business Intelligence

• Accessibility to information - The data are the main source of this concept. The first thing we must ensure BI tools and techniques will be the user access to data regardless of the source of these.

• To measure, manage and report on performance– Policy formulation– Planning & budgeting

Characteristics of BI

• Support in decision making – Wanted to go further in presenting the information so that users have access to analysis tools that enable them to select and manipulate data only those that interest them.

Characteristics of Business Intelligence

• An aid to joined up government to improve service

– Public Information

• To explore hidden relationships in data

– disease surveillance & public health– identifying tax fraud and money laundering– homeland security– crime prevention