IMS3001 – BUSINESS INTELLIGENCE SYSTEMS – SEM 1 , 2004

Introduction to Introduction to Business Intelligent Business Intelligent SystemsSystems

Week 1Dr. Jocelyn San PedroSchool of Information

Management & SystemsMonash University

IMS3001 – BUSINESS INTELLIGENCE SYSTEMS – SEM 1 , 2004 2

Staff- Staff- Dr. Jocelyn San Dr. Jocelyn San PedroPedro

T1.28 Level 1, Building T, Caulfield Campus

Jocelyn.sanpedro@sims.monash.edu.au

www.sims.monash.edu.au/staff/jsanpedro

Email correspondence: Subject: IMS3001 Email enquiries anytime, but expect

replies by Thursday PM Consultation Hours: 2-3 PM Tu,Th,Fri

(by appointment)

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The UnitThe Unit 2-Hour lecture per week 2-Hour tutorial per week Tutorials begin in Week 2 (i.e. next

week) Please make sure you are assigned

to a tutorial in Allocate+ no student will be admitted to a

tutorial unless they are on the class list.

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SynopsisSynopsis evolution and current state of

the art of the theory and practice of business intelligence systems;

role of these business intelligence systems in providing intelligence information to business decision makers

development process and some key techniques that support it

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AimAim provide students with

introductory knowledge of concepts, development and use of business intelligence systems

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ObjectivesObjectives

At the completion of this unit the students will:

have knowledge of: the scope and application of business

intelligence systems the role of business intelligence systems in

supporting business decision making the major approaches to the development

of business intelligent systems evolution of business intelligence systems

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ObjectivesObjectives have an understanding of:

the process of business intelligence systems development

current state of the art of the theory and practice of business intelligence systems

have the skills to: organise, analyse and interpret data for

the purpose of supporting business decision making

understand managerial problem solving activity as well as problem finding activity for supporting business decision making

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ObjectivesObjectiveshave developed attitudes which

enable them to: identify and evaluate business

intelligence opportunities plan for business intelligence

solution and implementation work closely with business

intelligence team

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AssessmentAssessment

Class Participation Value 10% in tutorials

Assignment Value 30% due Week 9, during tutorial

Exam, Value 60%Overall Assessment 100%

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Lecture 1 - OutlineLecture 1 - Outline What is Business Intelligence

(BI)? What is Business Intelligence

System (BIS)? What is the role of BIS in

supporting business decision making?

How did BIS evolve?

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Learning ObjectivesLearning Objectives Define business intelligence (BI) and

business intelligence systems (BIS) Explain the role of BIS in supporting

business decision making; Identify the different BIS that were

introduced in the past and explain how such systems supported business decision making

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What isBusiness Intelligence?

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What is Business What is Business Intelligence?Intelligence?

According to vendors:

a segment of information technology that comprises software systems that enable finding, storing, organising and supplying data; when incorporated into an information system, it enables company to utilise real-time analysis of information

Information Technology Toolbox www.ITToolbox.com

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What is Business What is Business Intelligence?Intelligence? software that enables business users to

see and use large amounts of complex data (e.g. multidimensional analysis, query tools, data mining tools)

SDG Computing www.sdgcomputing.com

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What is Business What is Business Intelligence?Intelligence? a category of applications and

technologies for gathering, storing, analysing, reporting on and providing access to data to help enterprise users make better business decisions

Cognos (www.cognos.com)

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What is Business What is Business Intelligence?Intelligence? markets business performance software,

comprised of three subcategories that includes ad hoc query and analysis, reporting/OLAP, executive information systems and analytical applications

Brio (www.brio.com)

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What is Business What is Business Intelligence?Intelligence? a set of concepts and methods to

improve business decision making by using fact-based support systems (e.g. briefing books and executive information systems in the 1990s)

Gartner Group www.gartner.com

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What is Business What is Business Intelligence?Intelligence? BI lets organisations access, analyse,

and share information internally with employees and externally with customers, suppliers, and partners

Business Objects www.businessobjects.com

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What is Business What is Business Intelligence?Intelligence? BI helps corporations transform their

operational data into actionable information; helps meet query reporting and advanced analytical needs

MicroStrategy www.microstrategy.com

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What is Business What is Business Intelligence?Intelligence? BI is a performance management

framework, an ongoing cycle by which companies set their goals, analyze their progress, gain insight, take action, measure their success, and start all over again

It helps decision makers make better decisions faster at both strategic and operating levels

Vitt, Luckevich and Misner (2002)Microsoft Corporation

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What is Business What is Business Intelligence?Intelligence?

According to non-vendors:

BI is processed information of interest to management about the present and future environment in which business is operating

Greene (1966)

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What is Business What is Business Intelligence?Intelligence? Processed information vs. data

data - raw material that is composed of facts intelligence information - information digested,

analysed, and interpreted for the purpose of decision making

Management has crucial role in BI, determines what will be in the domain of BI what information if of interest or relevant to its

decision Company’s environment

Present environment (mostly for tactical intelligence) Future environment (mostly for strategic intelligence)

Greene (1966) (cont)

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Operational Intelligence Affects operational levels of organisation on

daily, weekly, monthly basis Tactical Intelligence

Affects a part of organisation for a limited time (i.e., coming year) into the future

Strategic Intelligence Affects the entire organisation, or a major

part of it for a long period of time (i.e., 2 - 5 years and beyond)

PURPOSE OF BI Shift from reliance on short-term tactical

decisions to better use of strategic intelligence in the decision-making process

Greene (1966) (cont)

What is Business What is Business Intelligence?Intelligence?

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What is Business What is Business Intelligence?Intelligence? BI results from full appraisal of

information, past actions, and options; once sown, it tends to propagate itself across an organisation

Liautuad and Hammond (2000)

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What is Business What is Business Intelligence?Intelligence? BI refers to the ability to understand the

interrelationships of presented facts – whether they involve data, information and/or knowledge – in such a way to guide action toward one or more desired goals

Thierauf (2001)

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What is Business What is Business Intelligence?Intelligence? Relationship of intelligence to

various levels of summarisation Data – unstructured data Information – structured data useful for

analysis Knowledge - obtained from experts

based on actual experience Intelligence – keen insight into

understanding important relationshipsThierauf (2001)

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What is Business What is Business Intelligence?Intelligence? BI centers on computerised methods and

processes to improve strategic, tactical and operational decisions using data, information, and knowledge from multiple sources as well as applying experience and assumptions to develop an accurate understanding of the dynamic surrounding decision making

Thierauf (2001) (cont)

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For this UNIT – IMS3001For this UNIT – IMS3001 We shall adopt the definition of BI by non-

vendors – process, organisational function, product

Processing of information – collecting, organising, analysing, gaining insight, interpreting, reporting data, taking action, measuring the benefits of such actions for the purpose of supporting decision making

Generally in the context of decision support

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What is a Business Intelligence System?

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What is Business Intelligence What is Business Intelligence System?System? BIS is an information system that

provides BI to business decision makers at different levels of organisation (operational, tactical, strategic levels)

BIS is an information system that turns selected data, information, and/or knowledge into desired intelligence for business gain (Thierauf, 2001)

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What is the role of Business Intelligence System?

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Role of BISRole of BIS Provide decision makers with the ability

to understand (i.e., the intelligence to gain insights into) the relationships of presented facts in the form of data, information, and knowledge in order to guide action toward a desired actionable goal (Thierauf, 2001)

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Role of BIS Role of BIS Provide decision makers with timely data,

information and knowledge for problem solving, and problem finding

Past : Decision making as Problem Solving activity Reactive approach –use of appropriate

management technologies to resolve current problems as they arise

Current: Business intelligence activity as problem solving, as well as problem finding Proactive, preventive approach – anticipating

future company problems; looking for future opportunities

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How did Business Intelligence Systems

evolve?

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Evolution of BISEvolution of BISComputer-based Support Systems technologies 1950s Transaction Processing Systems (TPS) 1960s Management Information Systems (MIS) 1970s Office Automation Systems

Decision Support Systems (DSS) 1980s DSS Expanded

Commercial applications of Expert Systems Executive Information Systems (EIS)

1990s Group Support Systems Neural Computing Integrated, hybrid computer systems

Turban and Aronson (2001)

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Attributes of Computer-based Support Attributes of Computer-based Support SystemsSystems

(Turban and Aronson, 2001)(Turban and Aronson, 2001)

Dimension

Applications

TPS Payroll, inventory, record keeping, production and sales information

MIS Production control, sales forecasting, monitoring

DSS Long-range strategic planning, complex integrated problem areas

ES Diagnosis, strategic planning, internal control planning, maintenance strategies, narrow domain

EIS Support to top management, decision, environmental scanning

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Attributes of Computer-based Support Attributes of Computer-based Support SystemsSystems

(Turban and Aronson, 2001)(Turban and Aronson, 2001)

Dimension

Focus

TPS Data transactions

MIS Information

DSS Decisions, flexibility, user-friendliness

ES Inferencing, transfer of expertise

EIS Tracking, control “drill down”

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Attributes of Computer-based Support Attributes of Computer-based Support SystemsSystems

(Turban and Aronson, 2001)(Turban and Aronson, 2001)

Dimension

Decision Capabilities

TPS No decision, or simple decision models

MIS Structured routine problems using conventional operations research tools

DSS Semi-structured problems, integrated operations research models, bled of judgment and structured support capabilities

ES The system makes complex decisions, unstructured; use of rules (heuristics)

EIS None

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Attributes of Computer-based Support Attributes of Computer-based Support SystemsSystems

(Turban and Aronson, 2001)(Turban and Aronson, 2001)

Dimension

Highest Organisation Level served

TPS Sub-managerial, low management

MIS Middle management

DSS Top management

ES Top management and specialists

EIS Senior executives

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More BIS technologiesMore BIS technologies 1990s Data warehouses

Enable decision makers to “pull” BI from a large centralised repository

created to support the information requirements of an organisation’s decision makers.

1990s OLAP (On-Line Analytical Processing) systems Enable decision makers to build and work with

analytical models easily and view the output in multiple dimensions

1990s Knowledge Management Systems (KMS) Go beyond relationships found in information

allowing decision makers to extract patterns, trends, correlations that underlie the interworkings of a company currently and over time

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Summary Summary Vendors define BI according to what their products

can do for the business enterprise Limited in scope; mostly refers to data

analysis, querying and reporting Non-vendors refer to BI as a process, an

organisational function, and a product Process – of converting data into actionable

information – from unstructured data to keen insight and understanding of interrelationships of presented facts

Organisational function – strategic management function that affects the entire or major part of organisation

Product – processed information for the purpose of supporting business decision making

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SummarySummary BIS is an information system that

provides BI to business decision makers

BIS evolved from the concept of Computer-based Support Systems decision support technologies

New BIS terminologies – data warehousing, OLAP, KMS

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ReferencesReferences Vitt, E., Luckevich, M. and Misner, S. (2002)

Business Intelligence, Microsoft Corporation. Greene, R. (1966) Business Intelligence and

espionage. Dow-Jones Irwin, Homewood, Ill. Lintaud, B. (2000) e-Business Intelligence:

Turning Information into Knowledge into Profit, McGraw Hill, New York.

Thierauf, R. (2001) Effective business intelligence systems, Quorum Books.

Turban, E. and Aronson, J. (2001) Decision Support and Intelligent Systems, 6th Ed, Prentice Hall.

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Questions?

Jocelyn.sanpedro@sims.monash.edu.auSchool of Information Management and

Systems, Monash UniversityT1.28, T Block, Caulfield Campus

9903 2735