A Study on 21st Century Business Intelligence

0 |Business Intelligence

Contents 1. Introduction ............................................................................................................................................ 1

2. Background ............................................................................................................................................ 3

3. Analysis .................................................................................................................................................. 6

4. Conclusion ............................................................................................................................................ 12

Works Cited ................................................................................................................................................. 14

List of Figures

Figure 1 Data Warehouse Institute 2002 BI Explanation .............................................................................. 1 Figure 2 Architecture of Business Intelligence ............................................................................................. 2 Figure 3 History of BI (Wiki, 2013) .............................................................................................................. 3 Figure 4 Annual Revenue by Service Line (Revenue, 2012) ........................................................................ 6 Figure 5 Dell Market Growth (Dell, 2012) .................................................................................................... 7 Figure 6 Dell Earning & Income (Dell, 2011) ............................................................................................... 7 Figure 7 Microsoft BI Power Pivot (Excel, 2013) ......................................................................................... 8 Figure 8 Wal-Mart Sales (Wal-Mart, 2011) .................................................................................................. 9 Figure 9 Twitter Revenue with BI (Twitter, 2013) ...................................................................................... 10 Figure 10 Facebook Revenue Growth with BI (Facebook Worth,2013) ..................................................... 10 Figure 11 Facebook BI Ad Revenue (Facebook Worth, 2013) ................................................................... 11

List of Tables

Table 1 BI Adavantages & Disadvantages .................................................................................................... 6 Table 2 Advantages of PowerPivot ............................................................................................................... 8 Table 3 Pros & Cons of Wal-Mart BI ............................................................................................................ 9


1. Introduction Business Intelligence (BI) is the intelligence of business and is a new field of

investigation of the application of human cognitive faculties and artificial intelligence technologies to the management and decision support in different business problems. It relates to intelligence as information valued for its currency and relevance. It is expert information, technology and knowledge efficient in the management of organizational and single business. As a result, Business Intelligence is a broad category of application and technologies for gathering, providing access to, and analysing data for the purpose of helping enterprise users make better business decisions.

The Data Warehouse Institute defines BI as “The process, technologies and tools needed to turn data into information and information into knowledge and knowledge into plans that drive profitable business action.” BI encompasses data warehousing, business analytics and knowledge management (Leon & Leon Mathews, 1999).

Figure 1 Data Warehouse Institute 2002 BI Explanation

The term implies having a comprehensive knowledge of all of the factors that affect your business. It is imperative that you in-depth knowledge about the business factors such as your customer, competitors, business partners, economic environment and internal operations to make effective and good quality business decision. BI enables you to make these kinds of decisions. A specialized field of business intelligence known as competitive intelligence focuses solely on the external competitive environment. Information gathered on the actions of competitors and the decisions are made based on this information. Little, in any, attention is paid gathering internal information.

Business Intelligence uses the golden rules “Get the right information to the right people at the right time”, implanting the principles from data quality & accuracy, data consistency, data timeliness etc. BI system usually store data in the data warehouse and then analyse the data (normally OLAP & Data Mining is used). CRM or customer Relationship Management is one of the popular data mining forms in the ERP system. Normally ERP uses Data mart & Data Warehouse as the extensions. Business Intelligence incorporate with data mining, OLAP, multi-dimensional analysis and others data analysis technique for a variety of users application like product design, demand forecasting, retailing, customer relationship management, production planning, credit card management etc.


Figure 2 Architecture of Business Intelligence

The architecture of Bi defines a framework for manipulating and organizing the data that are used to build the BI systems. The information management architecture are used to convert the raw information into the suitable form to be used in the distinct BI uses. In other words, Bi typically includes the data cleansing, data integration and also describes the data warehousing or for a data federation approach that aggregates information in virtual databases instead of physical data marts & warehouse. Here are some types of BI applications that can build into architecture: ad hoc query, and data visualisation tools, plus online analytical processing software, business intelligence dashboards and performance scorecards.

History of Business Intelligence

The history of business intelligence starts from the era of military strategy during the Second World War. These approaches are based on the occidental & oriental methods as described by the Sun Tzu (Art of War). Intelligence and policy making are frequently used then after for the economic growth forecasting in 1950s. In 1960s portfolio analysis was started we determine the new marketplace and their potential revenue growth. Again in 1973, OPEC oil crisis and stagflation started intelligence using the cross impact methods and modelling technique (Burns, 2003). In 1980s Trade liberalization started through intelligence which is the result computing era beginnings. During the 1990s era, the word globalization beings and the business sectors starts using the intelligence for the revenue growth. Normally the umbrella term used by Howard is frequently used by the business house for improving their decision making strategy.


Figure 3 History of BI (Wiki, 2013)

2. Background Business Intelligence can eliminate a lot of the guesswork within an organization and it enhance communication between the different department and enable the organization to respond quickly to the financial condition, customer preferences and supply chain activities. In other word, BI is an umbrella as defined by Howard Dresner, to an assortment of application for intelligent decision making within an organization. Decision truly based on the gut feeling and can’t assure the success for the company but using BI fact-based decision business can be assured for success. Likewise, BI prepares a company an agile by giving a competitive edge in today’s evolving market conditions.

Reasons for Business Intelligence

Business Intelligence enables organization to improve the timeliness and quality of information. BI also enables business firm to make well decision thus can be the source of competitive advantage. Timely and quality information helps BI to reveals:

1) The position of business with others competitors 2) The capabilities of the business 3) The social, political & regulatory environment 4) Change in customer behaviours and spending patterns 5) Market condition, future trends, demographic & economic information

Business can deduce from the data gathered what change needs to be made. BI enables business to use the information gathered to quickly and constantly.

Goals of Business Intelligence

1. Support internal enterprise users in the assessment, enhancement and optimization of organizational performance & operation.

2. Deliver critical business information to end-users about value chain constituencies such as customers and supply-chain partners.


Benefits of Business Intelligence

1) Strategic Benefits: a. Improvement in decision making for low cost & high revenue. b. Assess, evaluate business operation & relationships. c. Improve the operational processes such as fraud detection, order processing etc. d. Leverage the amount of captured transactional & operational data.

2) Tactical Benefits: a. Intuitive user interfaces b. Multi-dimensional analysis c. Predict the future. d. “Drill- down” and “slice & dice” analytical capabilities

3) Functional Benefits: a. Market & customer penetration (Marketing) b. Sales force, cross-selling analysis (Sales) c. Budgeting & Planning (Finance) d. Operational efficiency (Operations) e. HR Performance evaluation f. Customer click stream information (IT)

Factors Influencing Business Intelligence

1. Customer: BI enables businesses to collect the data based on the markets place and the changing demand of the customer.

2. Competitors: BI describes the action taken by your competitors so that we can make the wise decisions in order to turn over the profits.

3. Business Partners: With the BI you and the others business partners can share the same business information in order to reduce the business misunderstanding.

4. Business Environment: BI reflects the state of economy and other key economic indicators are important for making the decisions.

5. Internal Operation: I/O is the day to day activities in the business, BI gives the information based on the working mechanism of the entire organization.

Success factors for BI

The major success factors for implementing the BI tools are listed below:

1) Business driven methodologies & project management 2) Robust & expandable framework 3) Data management & quality 4) Clear vision & planning 5) User requirement mapping solutions


Uses of BI (Application)

Normally Business Intelligence application area is wide because it provides the organizational data is such a way that the organization knowledge filters can easily associates with this and convert it into information for the organization. The application areas of BI are mentioned below:

1) Health & Fraud Detection 2) Finance (Value Chain Analysis) 3) Promotion Effectiveness (Cash-On-Ads) 4) National Security & Crime Analysis 5) Inventory Analysis 6) Retail Campaign Management, Order life cycle, Analytical CRM etc.


3. Analysis Advantage & Disadvantage of Business Intelligence

Table 1 BI Adavantages & Disadvantages

Business Intelligence Advantages Disadvantages Consists a set of KPI (Key Performance Indicators)

Historical data piling

Quicker & fact based decision making Cost Reliable reflection of information Complexity Multiple data sources (CRM, ERP, Budgets etc.)

Limited Use

Faster collection of information Time consuming implementation

Comparison

Figure 4 Annual Revenue by Service Line (Revenue, 2012)

Based on the above mentioned figure business, BI represents 64% of the revenue for the 2012 financial year, a decrease in activity of 3.8% compared to 2011. CRM represents 16% of annual revenue for the Group, a decrease of 5.5% in comparison to last year. E-business generates up to 20% of the Group's annual revenue, experiencing a significant growth of 6.8% compared to 2011, meeting the expected potential market growth.

Dell Business Intelligence

Dell is one of the most successful and profitable computer corporations in the global. It has been known for its innovative customer service and product custom configuration. As it continue to grow, it is faced with the challenge of how to maintain its customer relationship and its inventory management, while continuing to meet the demands and the requirements of its customers. This document will examine the history of the dell company. It normally includes the history behind the dell formation or the organization establishment, its steering committee members, geographical area cover by the dell company along with its size.


Figure 5 Dell Market Growth (Dell, 2012)

Based on the figure, financial performance of dell is directly proportional to the virtual growth of dell product and service. Thus the growth of the dell shows the company net profit margin over the year, market cap, revenue growth etc. based on the fiscal year 2012, dell best financial year where it collect the total revenue of $62.1 billion. The enterprise solution and service business, a bellwether for execution of dell strategy grew 6% to $18.6 billion. It was the 30% of the total revenue and was the half of the gross margin dollars.

Figure 6 Dell Earning & Income (Dell, 2011)


Microsoft BI Power Pivot

BI power pivot demand nearly as much time investment from the knowledge worker as they do transform BI task with the implementation itself. It a powerful data mash up and data exploration tool based on xVelocity in memory technologies providing unmatched analytical performance to process billions of rows at the speed of thought (PowerPivot, 2011). PowerPivot also integrate the warehousing analytics and BI to support the various data sources. And it also creates the portable and reusable data for the share point integration. The following graphs show the return of investment and cost benefits comparison using the PowerPivot vs. traditional methods.

Figure 7 Microsoft BI Power Pivot (Excel, 2013)

Advantages

Table 2 Advantages of PowerPivot

Microsoft Power Pivot Advantages Compare data from multiple sources Insanely huge data sets Create amazing dashboards Unleash the power of the slicer


Wal-Mart Business Intelligence Impact:

BI Tools Used: Oracle BI

Figure 8 Wal-Mart Sales (Wal-Mart, 2011)

Table 3 Pros & Cons of Wal-Mart BI

Pros & Cons of Oracle BI (Wal-Mart) Pros Cons Completely web-based authoring tools Unintuitive tasks and interface and lags BI

search, visa gadgets like innovation Interactive and integrated dashboards Prompting capabilities are limited

Wal-Mart responsible for 12% of productivity gains in entire US economy.

Average Sales of America Flags =6,000 (September 11th 2001)

All competitors ran out of flags

Nearest rival sold 20,000

Wal-Mart sold 116,000 flags on that day alone

EMC

1998: Total Revenue Collected $2.5 Billions

1998: HW (90%) + SVCS (10%) + SW (0%)

Implementing Business Intelligence

Predictive Modelling => Decision Made

2010: Total Revenue Collected $16 Billions

2010: HW (10%) + SVCS (10%) + SW (80%)


Twitter BI Revenue Growth

The wildly popular micro blogging site had made it easy for workers to update colleagues, partners, and customers about latest marketing campaigns, hiring happenings and other message. They also provide invaluable tools listening their customers as they talk back and talk amongst themselves.

Figure 9 Twitter Revenue with BI (Twitter, 2013)

Facebook Revenue Growth with BI

Figure 10 Facebook Revenue Growth with BI (Facebook Worth,2013)


Figure 11 Facebook BI Ad Revenue (Facebook Worth, 2013)


4. Conclusion Many companies are using BI application to penetrate the market beyond the enterprise

and share insights. Likewise, they concepts using the information technology to deliver actionable information for decision makers are important for 21st century global business marketplace. BI implements both the structural as well as semi-structural data. The future BI real time business intelligence will be available to every organization and will be embedded in many business systems.

As demonstrated, BI is an integral part of any overall data strategy for an organization. It will not only help organizations transform into a data-centric places, but it will yield to better decisions that can enhance the bottom line of the organization.

BI tools by Oracle:

1) Real Time Decision Making 2) Mobile BI 3) Enterprise Reporting

BI tools by Microsoft:

1) Power BI 2) SharePoint 3) SQL Server 4) PowerPivot

Future of Business Intelligence

In this rapidly changing world, consumers are now demanding quicker more effective and efficient service from businesses. To stay competitive companies must meet or exceed the expectations of consumers. Companies will have to rely more heavily on their business intelligence system to stay ahead of trends and future events. Business intelligence users are beginning to demand real-time business intelligence and near real-time analysis relating to their business, particularly in frontline operation. They will come to expect up-to date and fresh information in the same fashion as they used to monitor stock quotes on-line. Monthly or weekly analysis report will not sufficient because business users don’t want to want for the information. They need to be on and never out of date (Leon & Leon Mathews, 1999).

In not too distance future, business companies will become dependent on real-time information in much in the same fashion as people come to expect to get information on the internet in just one or two clicks. This instant ‘internet experience’ will create the new framework for the business intelligence, but business processes will have to adopt to change to incorporate with the real times flows of data. Likewise, in the near future business information will become more democratized where end users from throughout the organization will be able to view the information and its operational segment performance. So in the future the capability requirements of business intelligence will increase in the same way that consumer expectation increase. It is therefore imperative that companies at the same pace or even faster to stay competitive.


“BI 2.0” is the recently introduced term which is also a part of the BI industry and enables next process for BI. It is also used to define the acquisition, provision and real analysis of real time data.


Works Cited Burns, A. (2003, May 03). Business Intelligence: History & Intelligence Cycle. Retrieved from

AlexBurns: http://www.alexburns.net/Files/BI-PP.pdf

Leon, A., & Leon Mathews. (1999). Fundamentals of Information Technology Second Edition. Chennai: Leon Press.

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A Study on 21st Century Business Intelligence

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