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BIT 3231 BUSINESS
INTELLIGENCE AND INNOVATION
By Dr. BUGINGO EMMANUEL
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Contact
Dr. BUGINGO EMMANUEL
Email: emmanuelbugingo2019@gmail.com
e.bugingo@ur.ac.rw
Phone number: 0788297542
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Prologue
▪ Business: act of doing something productive to serve
someone’s needs, and thus earn a living, and make the
world a better place.
▪ Business activities are recorded on paper or using electronic
media, and then these records become data.
▪ The data is analyzed and mined using special tools and
techniques to generate patterns and intelligence, which
reflect how the business is functioning.
▪ These ideas can then be fed back into the business so that it
can evolve to become more effective and efficient in serving
customer needs.
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Introduction to Business
Intelligence
Business Intelligence
Alternative definitions
▪ BI : set of information technology (IT) solutions that includes
tools for gathering, analyzing, and reporting information to the
users about performance of the organization and its
environment.
▪ BI: set of techniques which assist in spotting, digging out and
investigating best data from the large amount of data to
improve conclusion making. Let us understand the concept
better with help of an example.
▪ BI: umbrella term that includes a variety of IT applications that
are used to analyze an organization’s data and communicate
the information to relevant users.
Data in Business Intelligence
Data:
1. Anything that is recorded.
2. Observations and facts.
3. Anecdotes and opinions.
4. Numbers, such as the record of daily weather or daily sales.
5. Alphanumeric, such as the names of employees and
customers.
Thus data becomes the new natural resource. Therefore,
Data lies at the heart of business intelligence
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Cont...
▪ Today, organizations have an extensive collection of
data and information of multiple varieties.
▪ These data can be stored in data warehouses / Data
Centres.
• Ex.: UR Data (Marks, Finance, Students, Staff,
Courses, IT systems/Infrastructure…etc)
▪ For extracting value (meaning) from the data
storages, these companies try to utilize BI
technology.
▪ BI systems allow organizations to collect, access,
analyze, and share information and knowledge.
BI as Techniques and Tools
▪ Also, BI may refers to a set of techniques and tools (IT
applications):
➢ Used for transforming raw data into meaningful information for
organizational business analysis.
▪ Data Mining techniques of BI are used to perform data
classification, clustering, or predictions for future business
planning
▪ Specific Knowledge is needed in today’s business for:
i. Driving innovation:
• Product Innovation
• Service Innovation
• Process Innovation
ii. Enable creativity: (using new knowledge)
Data Processing Chain
▪ A sequence of steps to be followed to benefit from the data in
a systematic way.
1. Data can be modeled and stored in a database.
2. Relevant data can be extracted from the operational data
stores according to certain reporting and analyzing
purposes, and stored in a data warehouse.
3. The data from the warehouse can be combined with other
sources of data, and mined using data mining techniques to
generate new insights.
4. The insights need to be visualized and communicated to the
right audience in real time for competitive advantage.
The diagram is shown in the following slid
Data Processing Chain
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Brief,
BI is a Technology-driven process for
analyzing data and delivering
actionable information that helps
executives, managers and workers
make informed business decisions.
Toyota uses BI to Excel
1. In what ways did the old information systems create problems
for Toyota?
2. What information needs of managers are satisfied by the new BI
system? What decisions are satisfied by the BI support?
3. Relate the TLS problem to the supply chain (from factories, to
dealers, to consumers).
4. List the decision support tools cited here.
5. What strategic advantage can Toyota derive from this system?
6. Relate Toyota’s decision to make consumer-helping robots to
the changing business environment.
Business Intelligence
Business
Intelligence
Expert
Reporting Systems
Knowledge
Data Management
Mining
Why Business Intelligence?
Better decisions with greater speed and
confidence
Recognize and maximize firm’s
strengths
Shorten marketing efforts
Improve customer relationships
Align effort with firm strategy
Improve revenue and profit
Elements of Business
Intelligence
Data Gathering
➢Information capture
Analysis
➢Understanding the context of information
Distribution
➢Timely delivery to the right people who can
act on it
Changing Business Environments
and Computerized Decision Support
The Business Pressures-Responses-Support
Model
» The business environment
» Organizational responses: be reactive, anticipative,
adaptive, and proactive
» Computerized support
– Closing the Strategy Gap One of the major objectives of BI
is to facilitate closing the gap between the current
performance of an organization and its desired performance
as expressed in its mission, objectives, and goals and the
strategy for achieving them
Changing Business Environments
and Computerized Decision Support
A Framework for
Business Intelligence (BI)
Business intelligence (BI)
A conceptual framework for decision support.
It combines architecture, databases (or data
warehouse), analytical tools and applications
Remember that we defined business analytics
(BA) to include the access, reporting, and
analysis of data supported by software to
drive business performance and decision
making
From our perspective, BA and BI are the
essentially the same thing
A Framework for
Business Intelligence
A Framework for
Business Intelligence (BI)
The Origins and Drivers of Business
Intelligence
» Organizations are being compelled to
capture, understand, and harness their data
to support decision making in order to
improve business operations
» Managers need the right information at the
right time and in the right place
A Framework for
Business Intelligence (BI)
BI’s Architecture and Components
» Data Warehouse
» Business Analytics
» Performance and Strategy
» User Interface
A Framework for
Business Intelligence (BI)
A Framework for
Business Intelligence (BI)
BI’s Architecture and Components
» Data Warehouse
– Data obtained from operational systems needed
to support decision making
A Framework for
Business Intelligence (BI)
BI’s Architecture and Components
» Business Analytics
– Create on-demand reports and queries and
analyze data (originally called online analytical
processing – OLAP)
– Automated decision systems: rule – based
App. Case 1.1 – price setting example
– Data Mining: a class of information analysis
based on databases that looks for hidden
patterns in a collection of data which can be
used to predict future behavior
A Framework for
Business Intelligence (BI)
BI’s Architecture and Components
» business (or corporate) performance
management (BPM)
A component of BI based on the balanced
scorecard methodology, which is a
framework for defining, implementing, and
managing an enterprise’s business strategy
by linking objectives with factual measures
A Framework for
Business Intelligence (BI)
BI’s Architecture and Components
» User Interface: Dashboards and Other
Information Broadcasting Tools
– Dashboards
A visual presentation of critical data for
executives to view. It allows executives to see
hot spots in seconds and explore the situation
» Examples of dashboards and scorecards:
http://www.idashboards.com/?gclid=CIDDrpLR05
QCFQNaFQodSWDQkQ
A Framework for
Business Intelligence (BI)
⚫The Benefits of BI
Time savings Faster, more accurate
Single version of truth reporting
Improved strategies
and plans Improved decision makin
Improved tactical
decisions Improved customer
More efficient service
processes
Increased revenue
Cost savings
Many benefits are intangible
A Framework for
Business Intelligence (BI)
The Business Value of BI
» How BI Can Help
– Assess the readiness for meeting the
challenges posed by these new business
realities
– Take a holistic approach to BI functionality
– Leverage best practices and anticipate hidden
costs
A Framework for
Business Intelligence (BI)
The Business Value of BI
» Key Issues and Framework for BI
Analysis
– How can enterprises maximize their BI
investments?
– What BI functionality do enterprises need, and
what are they using today?
– What are some of the hidden costs associated
with BI initiatives?
Intelligence Creation and Use
and BI Governance
Intelligence Creation and Use
and BI Governance
The general process of intelligence
creation starts by identifying and
prioritizing specific projects
The project prioritization process within
organizations is sometimes called BI
Governance
Intelligence Creation and Use
and BI Governance
A typical set of issues for the BI
governance team is to address
1. Creating categories of projects (investment,
business opportunity, strategic, mandatory, etc.)
2. Defining criteria for project selection
3. Determining and setting a framework for
managing project risk
4. Managing and leveraging project
interdependencies
5. Continually monitoring and adjusting the
composition of the portfolio
Intelligence Creation and Use
and BI Governance
Intelligence Gathering
» How modern companies ethically and legally
organize themselves to glean as much
information as they can from their:
– Customers
– Business environment
– Stakeholders
– Business processes
– Competitors
– Other sources of potentially valuable information
Intelligence Creation and Use
and BI Governance
Intelligence Gathering
» In order to be useful in decision making
and improving the bottom line, the data
must be:
– Cataloged
– Tagged
– Analyzed
– Sorted
– Filtered
» These activities are part of the BI creation
cycle
The Major Theories and
Characteristics of Business Intelligence
online transaction processing systems
(OLTP)
Systems that handle a company’s routine
ongoing business
online analytic processing (OLAP)
An information system that enables the user,
while at a PC, to query the system, conduct
an analysis, and so on. The result is
generated in seconds
The Major Theories and
Characteristics of Business Intelligence
Some Theories of BI
» A factory and warehouse
» The information factory
» Data warehousing and business
intelligence
» Teradata advanced analytics
methodology
» Oracle BI system
Toward Competitive
Intelligence and Advantage
The Strategic Imperative of BI
» Barriers to entry of a new competitor are being
significantly diminished
» Because of the Web revolution and increasing
globalization, companies throughout the world are
challenging major players in industries
» The ability to deliver goods worldwide is making it
easier for potential competitors to get products and
services to more customers almost anywhere
» Companies are finding better or less expensive
suppliers all over the globe
Successful Business Intelligence
Implementation
The Typical BI User Community
» IT staff
» Power users
» Executives
» Functional managers
» Occasional information customers
» Partners
» Consumers
Each group uses different BI tools and functions at
varying levels of strategic importance
Successful Business Intelligence
Implementation
Appropriate Planning and Alignment with
the Business Strategy
» Planning and execution components
– Business
– Organization
– Functionality
– Infrastructure
» Define objectives while considering organization’s
skills, plan for change, prepare action plan
Establish a BI Competency Center (BICC)
within the Company
Conclusion:
Business Intelligence Today and Tomorrow
Today’s organizations are deriving more
value from BI by extending actionable
information to many types of employees,
maximizing the use of existing data
assets
Visualization tools including dashboards
are used by producers, retailers,
governments, and special agencies
Why Business Intelligence Fails
Failure to recognize the breadth of the
problem (not just financial system)
No Top Down support
Lack of standardize procedures or
processes
Bad quality of information – Dirty Data
Computer systems impede rather than
enhance BI efforts
Conclusion:
Business Intelligence Today and Tomorrow
More and more industry-specific
analytical tools will flood the market to
perform almost any kind of analysis and
to facilitate informed decision making
from the top level to the user level
A potential trend involving BI is its
possible merger with artificial
intelligence (AI)
