ISYS 650 Business Intelligence - Sfsu

separatesnottySoftware and s/w Development

Nov 25, 2013 (5 years and 5 months ago)


ISYS 650

Business Intelligence

David Chao

Fundamental Roles of IS in Business

Types of Information Systems

Operations Support Systems

Efficiently support day
day operations

Management Support Systems

Provide information and support for effective
decision making by managers

Strategic Information Systems

Help get a strategic advantage over customer

Transaction Processing Systems, TPS

Record and process business transactions

Any exchange of money or other benefits between two or
more parties

Order processing, purchasing

General ledger, accounts payable, accounts

arge amount of data, high processing speed, high
reliability, accuracy, and security (fault tolerant)

Data: internal, historical, detailed

Operations Support Systems

Current Trend in Operations Support

Enterprise Resources Planning ERP

for the internal world of a company

Customer Relationship Management CRM

for the external world of a company.

Enterprise Resources Planning, ERP

A company
wide, integrated, cross
functional system
used to manage and coordinate all the resources,
information, and functions of a business from shared
data bases.


Transaction processing

Supply chain management


Human resource

Major vendors:

SAP, Oracle, Microsoft

Customer Relationship Management, CRM

Front office operations:

Direct interaction with customers, e.g. phone calls, e
mail, online services etc.

Call Center

Sales Force Automation

tracks all contact that has been made with a given
customer, the purpose of the contact, and any follow up
that might be required.

Sales Intelligence


Example: SalesForce.Com

Types of Management Support Systems

Management Information Systems (MIS)

Reports and displays

Example: daily sales analysis reports

Decision Support Systems (DSS)

Interactive and ad hoc support

Example: a what
if analysis to determine where to spend
advertising dollars

Executive Information Systems (EIS)

Critical information for executives and managers

Example: easy access to actions of competitors

Management Information Systems

Facilitate management control by producing
summarized reports that compare actual
performance against planned performance on a
regular and recurring basis.

Management control: Ensuring that performance
meets established standards

Serve middle management

Provide reports on firm’s current performance,
based on data from TPS

Sample MIS Report

Sales Comparison

A DSS is a computerized system for helping
make decisions typically by modeling problems
and employing quantitative models for
solution analysis. A decision is a choice
between alternatives based on estimates of
the values of those alternatives.

Serve middle management


decision making

E.g. What is impact on production schedule if December sales

Often use external information as well from TPS and MIS

Decision support systems

omponents of DSS

: Current & Historical Data from
Many Sources

Internal and external data

Model base
: Collection of Mathematical &
Analytical Building Blocks

Interface for analysis

If Questions

DSS Components

An Executive Information System (EIS) is a type of
information system intended to facilitate and
support the information and decision
making needs
of senior executives by providing easy access to both
internal and external information relevant to
meeting the strategic goals of the organization. It is
commonly considered as a specialized form of a
Decision Support System.

Support senior management


decisions requiring judgment, evaluation, and

Incorporate data about external events (e.g. new tax laws or
competitors) as well as summarized information from internal MIS
and DSS

Executive support systems

Business Intelligence (BI)

BI is an evolution of decision support
concepts over time.

Meaning of EIS/DSS…


Executive Information System


Everybody’s Information System (BI)

BI systems are enhanced with additional
visualizations, alerts, and performance
measurement capabilities.

Recent Developments In Decision
Support Related Technologies

Data warehouse

Online Analytical Process, OLAP

Data visualization


Business Performance Management

Data mining

Definition of BI

BI is an umbrella term that combines architectures, tools,
databases, analytical tools, applications, and

BI a content
free expression, so it means different things
to different people.

BI's major objective is to enable easy access to data (and
models) to provide business managers with the ability to
conduct analysis.

BI helps

data, to information (and knowledge),
to decisions and finally to action.

BI supports every level of business operation.

A Brief History of BI

The term BI was coined by the Gartner
Group in the mid

However, the concept is much older


MIS reporting

static/periodic reports


DSS, Executive Information Systems (EIS)


OLAP, dynamic, multidimensional data
warehouse, ad
hoc reporting


Inclusion of Artificial Intelligence and
Data/Text Mining capabilities; Web


Yet to be seen

The Evolution of BI Capabilities

Changing Business Environment &
Computerized Decision Support

Companies are moving aggressively to
computerized support of their operations =>
Business Intelligence

Business Pressures



Business pressures
result of today's competitive
business climate


to counter the pressures


to better facilitate the process

Business Pressures


Support Model

Organizational Responses

Be Reactive, Anticipative, Adaptive, and

Managers may take actions, such as:

Employing strategic planning.

Using new and innovative business models.

Restructuring business processes.

Participating in business alliances.

Improving corporate information systems.

Improving partnership relationships.

Encouraging innovation and creativity. …cont…>

Organizational Responses, continued

Improving customer service and relationships.

Moving to electronic commerce (e

Using new IT to improve communication, data access
(discovery of information), and collaboration.

Responding quickly to competitors' actions (e.g., in
pricing, promotions, new products and services).

Automating many tasks of white
collar employees.

Automating certain decision processes.

Improving decision making by employing analytics.

Automated Decision System

A relatively new approach to supporting highly
structured decisions

An ADS is a rule
based system that provides a
solution to a repetitive managerial problem in a
specific area.

If only 70% of seats on a fight from LA to NY are sold
three days prior to departure, offer a discount of x %
to nonbusiness travelers.

If an applicant owns a house and makes over
$100,000 a year, offer a $10,000 credit line.

An ADS is event
driven alert:

Monitor credit card transactions for possible fraud

Offer financial services when customers make big

Closing the Strategy Gap

One of the major objectives of computerized
decision support 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 to achieve them.

The Architecture of BI

A BI system has four major components:

a data warehouse
, with its source data

business analytics
, a collection of tools for
manipulating, mining, and analyzing the data in
the data warehouse;

business performance management
(BPM) for
monitoring and analyzing performance

a user interface
(e.g., dashboard)

A High
level Architecture of BI

Components in a BI Architecture

data warehouse
is the cornerstone of any
large BI system.

Originally, the data warehouse included only historical
data that was organized and summarized, so end users
could easily view or manipulate it.

Today, some data warehouses include access to current
data as well, so they can provide real
time decision
support .

Business analytics
are the tools that help users
transform data into knowledge
(e.g., queries, data/text
mining tools, etc.).

Components in a BI Architecture

Business Performance Management
(BPM), which
is also referred to as corporate performance
management (CPM), is an emerging portfolio of
applications within the BI framework that provides
enterprises tools they need to better manage their

User Interface

(i.e., dashboards) provides a
comprehensive graphical/pictorial view of
corporate performance measures, trends, and

The Benefits of BI

1.Helps align the organization towards its key objectives

2.Enables faster and fact
based decision making

3.Combines multiple sources of data for decision making

4.Efficient collection and distribution of vital data and

“The right information at the right time and in the right place”

Intelligence and Espionage

Stealing corporate secrets, CIA, …

Intelligence vs. Espionage


The way that modern companies ethically and legally
organize themselves to glean as much as they can from
their customers, their business environment, their
stakeholders, their business processes, their
competitors, and other such sources of potentially
valuable information

Major BI Tools and Techniques

Tool categories

Data management

Reporting, status tracking


Strategy and performance management

Business analytics

New/advanced tools/techniques to handle
massive data sets for knowledge discovery

Major BI Vendors

In recent years, the landscape of BI vendors has


acquired by IBM in 2008

IBM also acquired SPSS in 2009


acquired by Oracle in 2008

Business Objects
acquired by SAP in 2009


May be the only independent large BI vendor

Others include Microsoft, SAS, Teradata (mostly
considered a DW vendor)