DFP40162:

Business Intelligence

Chapter 1:
Introduction to
Business Intelligence
TAN RHU CHOON
IZLIN ZURIANI BINTI ISHAK
JT MK
P OLIT E K N IK B A LIK P U LA U
Course Learning Outcomes
• CLO1
Acquire the fundamentals concepts of Data Warehousing
in Business Intelligence with the usage of technology
OLAP and OLTP

• CLO2
Create a database and deliver a report that suits business
enterprise
Section Chapter 1
Introduction to Business Intelligence
• Define Business Intelligence.
• Describe Business Intelligence relationships to business strategy.
• Identify benefit of Business Intelligence to the organization
• Define the Architecture of Business Intelligence.
• State the evolution of Business Intelligence and the difference between
Enterprise Resource Planning (ERP) and Business Intelligence
• Discuss the importance of Business Intelligence to a business or
enterprise organization.
 Describe Business Intelligence
relationships to business strategy
Can business intelligence help supply chain
management?

Example : Supply Chain management

1. Transportation vendors
2. Credit and cash transfers
3. Suppliers & Distributors
4. Accounts payable and receivable
5. Inventory
6. Order fulfillment
The traditional Supply Chain workflow
Traditional ICT tools for handling SCM
ON-LINE TRANSACTION PROCESSING or OPERATIONAL
TRANSACTION PROCESSING)

“On line transaction processing, or OLTP, is a class of information

systems that facilitate and manage transaction-oriented applications,
typically for data entry and retrieval transaction processing. “ (wikipedia)
Operational, or online transaction processing (OLTP), workloads are
characterized by small, interactive transactions that generally require
sub-second response times.
Example of a typical OLT interface
Shipment number, status, carrier name, shipping state, date, source,
destination, package type..
What kind of info can you get from this database?
• Shipments (transactions)
• Destinations
• Earnings..
• Everything according to time, geographic areas, etc. (e.g., “How many
shipments to Roma in July?”)
• Data come from inside the company and are mostly manually entered.
Data processing is with traditional database systems (SQL). Interfaces
are sometimes well designed , but usually not so exciting.

Question :Can business intelligence help supply chain management?

Let’s find it out with next example
Study Case one: Magpie Vaccine supply chain (1)

• Cold chain in healthcare is the temperature-

controlled supply chain in trasporting and storing
vaccines and drugs.

• Maintaining cold chain is extremely important for

these products.

• A study of CDC (Center for Desease Control in

US) revealed that ¾ of providers experienced
serious cold chain violation
 Study Case one: Magpie Vaccine supply chain (2)

• Magpie sensing (a start-up project) is using cold

chain data analytics and business intelligence
to improve vaccine supply chain management
• They gather location-tagged information about
cold storage units using a shippable wireless
temperature and humidity monitor system
• Real-time, fixed-location monitoring device then
safeguards products from their arrival at a lab or
clinic until the moment of use
Study Case one: Magpie Vaccine supply chain (3)

At the core of Magpie Sensing's solutions are analytics algorithms

which leverage data from monitoring devices to improve cold chain
processes and predict cold storage problems before they occur.
Study Case one: Magpie Vaccine supply chain (4)

1. What information is provided by the descriptive analytics

employed at Magpie Sensing?
2. What type of support is provided by the predictive analytics
employed at Magpie Sensing?
3. How does prescriptive analytics help in business decision making?

Task 1 : Write down your answers in LMS CIDOS forum.

Study Case one: Magpie Vaccine supply chain (5)
Example of analytic system: single system
Summary of study case one
• Data come from several sources (in addition to company data, we
have sensors , methereological and geographical data)
• Data are aggregated to obtain additional information (e.g., times of
day that are busiest and the periods where the system's door is
opened the most. This can guide staff training and institutional
policies)
• Not simple queries (descriptive) but also predictive and prescriptive
information. System helps efficient and timely decision making!
• Interfaces (visualization) is a key to efficient use and understanding of
data
Relationship between Business Analytics and BI,
and BI and Data Warehousing
An Overview
Define Business Intelligence
Define Business Intelligence
BI major objective is to enable
interactive access (sometimes in real
time) to data, enable manipulation of
these data, and to provide business
managers and analysts the ability to
conduct appropriate analysis.
Define Business Intelligence
• Business Intelligence or BI is an umbrella term that combines
architectures, tools, databases, analytical tools, applications, and
methodologies
• BI is 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 transform data, to information (and knowledge), to
decisions, and finally to action
Discuss the importance of Business Intelligence
to a business or enterprise organization
Why do companies need BI?

What’s the best that can happen?

Optimization
What will happen next?
Competitive Advantage Predictive Modeling
Tactical /
What if these trends continue?
Forecasting/extrapolation Strategic BI
(PREDICTIVE)
Why is this happening?
Statistical analysis

Alerts
What actions are needed?

Query/drill down Operational BI

Where exactly is the problem?
(PRESCRIPTIVE,
Ad hoc reports DESCRIPTIVE)
How many, how often, where?

Standard reports
What happened?

Sophistication of Intelligence
Where can we apply Business Intelligence?
Suppliers Customers

Strategic
Apps.

Tactical
Apps.
Consumers
Materials/Components
SCM Applications ERP Applications CRM Applications

Supply Chain Enterprise Resource planning

Customer Relations

Business Intelligence
The Architecture of BI
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
Data Warehouse Business Analytics Performance and
Environment Environment Strategy
Data Technical staff Business users Managers / executives
Sources Built the data warehouse Access
Data
ü Organizing Warehouse BPM strategy
ü Summarizing Manipulation
ü Standardizing Results

User Interface
Future component - browser
intelligent systems - portal
- dashboard
Architecture of a BI system

Data selection, Data visualization

extraction, transformation and analytics:
and load descriptive, predictive
prescriptive

Data storage,
in relational or
multi-dimensional
tables

OLAP: on-line analytical processing

Identify benefit of Business Intelligence to
the organization
Benefits of Business Intelligence

Improving organizations by
providing business insights to all
employees leading to better,
faster, more relevant decisions
Benefits of Business Intelligence
1. Improve Management Processes
• planning, controlling, measuring and/or changing resulting in
increased revenues and reduced costs
• Improve Operational Processes
• Fraud detection, order processing, purchasing.. resulting in
increased revenues and reduced costs

2. Predict the Future (sales, out-of-stock,…)

State the evolution of Business Intelligence and
the difference between Enterprise Resource
Planning (ERP) and Business Intelligence
A Brief History of BI
The term BI was coined by the Gartner Group in the mid-1990s
However, the concept is much older
• 1970s — MIS reporting — static/periodic reports
• 1980s — Executive Information Systems (EIS)
• 1990s — OLAP, dynamic, multidimensional, ad-hoc reporting -> coining
of the term “BI”
• 2010s - Data/Text/Web Mining; Web-based Portals, Dashboards, Big
Data, Social Media, and Visual Analytics
• 2020s - yet to be seen
The Evolution of BI Capabilities
• Metadata:
 data about data – data dictionary of a database
• ETL:
 Extraction, transformation and load (raw data) – taking data from a transactions
processing system, cleaning it up, and moving to a data warehouse.
• Data Warehouse:
 Mostly historical data for analysis of corporate performance, can contain current data for online
transaction processing – e.g. Teradata warehouse system
• Data Marts:
 Smaller (particular subject or department) and more focused than a data warehouse -
marketing data mart as a subset of a corporate data warehouse
• DSS:
 Decision Support System - System to help managers in decision making, e.g., for mortgage
loan decisions, project selections, etc.

35
Difference between Enterprise Resource Planning (ERP) and
Business Intelligence
Definitions of ERP and BI

1. ERP (Enterprise Resource Planning) combines the multiple systems in

different departments within an organization into a single integrated
software program that runs out of a single database. One integrated
software is then divided into software modules that run a replica of their
standalone counterparts.

2. Gartner says, “ERP tools share a common process, data model,

covering board and deep operational end-to-end processes such as
those found in finance, HR, distribution, manufacturing, service and the
supply chain.”
Difference between Enterprise Resource Planning (ERP) and
Business Intelligence

Definitions of ERP and BI

1. BI is defined by Gartner as: an umbrella term that includes the

applications, infrastructure and tools, and best practices that
enable access to and analysis of information to improve and
optimize decisions and performance.

2. The main role of BI is to steer an organization’s success through

systematic exploration of the business data (analytics) and
providing actionable insight to aid in decision making.
Difference between Enterprise Resource Planning (ERP) and
Business Intelligence

The main differences between ERP and BI are:

• ERP operational systems are full of transactional and operational

data. The give views at an operational level and only offer insight
up to that point.
BI tools are mainly leveraged to gain insight to aid high level
management in strategic decision making.
Difference between Enterprise Resource Planning (ERP) and
Business Intelligence

The main differences between ERP and BI are:

• ERP is an Online Transaction Processing system (OLTP). This
means that the system records transactions as soon as they take
place. The main function if to provide high speed transaction
recording.
BI is an Online Analytical Processing system (OLAP). OLAP
systems provide high speed and high capacity analytics. For
instance fast access reports, dashboards, developing scorecards.
One can view different data sources on one page and they’re
formatted to fit a suitable perspective.
Difference between Enterprise Resource Planning (ERP) and
Business Intelligence

The main differences between ERP and BI are:

• ERP systems are more focused on current transactional and

operational information. Primarily, to save costs and time and ease
interdepartmental communication. Efficiency is the main objective
of ERP systems.
BI systems are more aligned with forecasting. They allow
companies to take advantage of future conditions with this
predictive ability.
End of Chapter
1. Define BI.
2. List and describe the major components of BI.

Task 2: Write down your answers in LMS CIDOS forum.