Chapter 1 Business Driven Technology

hesitantdoubtfulAI and Robotics

Oct 29, 2013 (3 years and 10 months ago)

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Business Intelligence

Business intelligence (BI)

refers to all of the
applications and technologies used to



,
provide access to, and
information to





efforts



Putting together all of the pieces of the puzzle


Business Plug
-
In B18 pages 466
-
482




Sun Tzu in
The Art of War


To succeed in war, one should have full


of one’s own





and

and

full knowledge of the enemy’s strengths and
weaknesses.



Lack of either one might result in defeat.


Many businesses today say “how can I understand
my competitor when I can’t even understand myself.


That is what we are trying to solve using
business intelligence.

The Problem:


With all of the data being captured and generated
by SCM, CRM and ERP systems, as well as the other
digital data being created and transmitted
(spreadsheets,
fields in database files, word processing documents, video clips, email and text
messages, voice mail, etc.)
, businesses are facing a digital
explosion.



The amount of data generated is doubling every
year


Some believe it will soon double monthly



Data is a




for a business, and if the asset
is not used, the business is

An Ideal Business Scenario

An account manager, on her way to a client visit, looks up past
proposals, as well as the client’s ordering, payment, delivery,
support and marketing history. At a glance, she can tell that
the client’s ordering volumes have dropped lately.


A few queries later, she understands that the client had support
issues with a given product. She calls her support
department and learns that the defective product will be
replaced within 24 hours.


In addition, the marketing records show that the client recently
attended a user conference and expressed interest in a new
product line.


With this information, she is prepared for a constructive sales
call. She understands all aspects of a client’s relationship with
her firm, understands the client’s issues and can confidently
address new sales opportunities.


To improve the quality of business decisions,
business intelligence tools and systems are used to
make better, more informed decisions


P




and distribution schedules


Determine correct inventory levels


F



levels of bad loans and fraudulent credit card use


Forecast credit card spending by new customers


Predict machinery failures


D



key factors that control optimization of
manufacturing capacity


P



when bond prices might change


Determine when to buy or sell stocks


Predict hard drive failures


Predict potential security violations


Forecast claim amounts and medical coverage costs.


C



the most important elements that affect medical
coverage.


T



crime patterns, locations and criminal behavior


Forecast the cost of moving military equipment


T



strategies for potential military engagements


Capture data on where customers are flying and the
ultimate destination of passengers who change airlines in
hub cities: is there a new route that should be added?


Predict what type of show is best to air during prime time
and how to maximize returns by interjecting commercials


D





on symptoms and causes that result
in illness and how to provide proper treatments.

Having BI promotes understanding: Asking WHY?


W






?
(historical perspective)


W





?
(modify or encourage to continue)


Where







(predict future direction)

DATA MINING


The center of any business intelligence effort is




Data mining: the use of





to



large amounts of


in
order to


that might be used to predict future behavior.


Uses query tools, multidimensional analysis,
intelligent agents and various statistical tools


Algorithms are applied to data sets to


inherent



and



in the data.


Goals of Data Mining


C


Trying to assign records to one of a predetermined set of classes.



E


Determine values for an unknown continuous variable or estimate
future values.



Affinity grouping


D



Clustering


Segment a diverse/differing population of records into groupings
with common characteristics

Most common forms of Data Mining


Cluster analysis


Association detection


Statistical analysis

Cluster Analysis


Cluster analysis




a technique used to





into mutually

exclusive


such

that the members of

each group are as close

together as possible to one another and the different
groups are as far apart as possible



CRM systems depend on cluster analysis to segment
customer information and identify behavioral traits


Segment by



, best customers or one
-
time customer.

Association Detection


Association detection



reveals the degree to







and the nature
and frequency of these relationships in the
information



Market basket analysis:
trying to understand




Applications include :


C




products and services


s



Statistical Analysis


A wide range of statistical tools that can be used to build
various statistical models, examine the model’s
assumptions and validity, as well as compare and contrast
the various models to determine the best one to use for a
particular business issue



Various types of statistical analysis that might be performed
include:


Information correlations


Distributions, calculations, and variance analysis


F



(most common form of statistical analysis)


T


Prediction


Various


The business intelligence tool used by most
organizations is




and its data
analysis functionality, especially



By adding a Page Field to a Pivot Table, you can add
another dimension of information: 3
-
D (rows and
columns and layers).


Creating a 3
-
dimensional Pivot Table in Excel is a means
of conceptually building a data warehouse. Page fields
represent the depth layer



Pivot Tables can help you
see