BTCOE704 (B): BUSINESS INTELLIGENCE

[Unit 1] Business Intelligence Introduction

Definition, History of Business intelligence

Definition of Business intelligence:

Business intelligence (BI) is the process of gathering, storing,
analysing , and presenting data to improve business decision-making.
It involves using technology and methodologies to transform
raw data into actionable insights that inform strategies and guide
actions.
BI is process organization collect data from internal it system
and external sources prepare for analysis.
BI is a technology driven process for analyzing data and
delivering information. The technical infrastructure that collect stores
and analyzes company data.

How does the Business intelligence works:

1. A BI architecture include more than BI software.
2. BI data is typically stored in a data warehouse built for an entire
organization or in smaller data marts. That hold subset of business
information for individual dept. and business unit.
4. BI tools were primarily used by BI and IT professionals who ran
queries and produced dashboards and report for business users.
Why Business intelligence?
1 .The role of BI is to improve an organization business operation
through the use of relevant data.
2. Company that effectively employ BI tool and technology can
translate their collected data into valuable the business process.
3. BI can be used to make better business decisions that increase
productivity and revenue.
4. Business growth and higher profits.

Application of Business intelligence:

1. Speed up and improve decision making.
2. Optimize internal business processes.
3. Increase operational efficiency and productivity

Business intelligence includes some Activities

Business intelligence encompasses a wide range of activities, including:

1. Data collection and integration.

2. Data storage and Management.
3. Data Analysis and modeling.
4. Data visualization
5. Reporting and communication
Data collection and integration: Gathering data from various
sources, such as internal databases, external feeds, and customer
transactions.
Data storage and management: Storing and organizing data in a
way that is accessible and usable.
 Data analysis and modeling: Applying statistical and analytical
techniques to extract meaningful patterns and trends from the data.
Data visualization: Presenting the results of the analysis in a clear
and concise way, often using dashboards, charts, and reports.
Reporting and communication: Sharing the insights gained from
the data with stakeholders across the organization.

History of Business intelligence:

The goal of BI is to empower businesses to make data-driven
decisions that lead to better outcomes. History of Business
Intelligence The term "business intelligence" has a long and
interesting history. Here are some key milestones:

1865: The phrase "business intelligence" is first used by author

Richard Millar Devens to describe how a banker used information to
gain a competitive advantage.

1958: Hans Peter Luhn, an IBM researcher, uses the term in an

article, focusing on the "ability to apprehend the interrelationships of
presented facts."

1989: Howard Dresner, a Gartner analyst, proposes "business

intelligence" as an umbrella term for methods to improve business
decision-making through data analysis.

1990s: BI tools and technologies start to emerge, allowing for easier

data storage, analysis, and visualization.

2000s: BI becomes more mainstream and accessible to smaller

businesses. Self-service BI tools and cloud-based solutions become
available.

2010s: The rise of big data and advanced analytics technologies

further revolutionizes BI.
Present day: BI is now a critical component of every successful
business. It is used in all industries and departments to inform
everything from marketing campaigns to product development to
financial decisions.

Future of Business intelligence:

The future of BI is bright, with continued innovation and
advancements leading to even more powerful insights and smarter
decision-making for businesses of all sizes.
1. Increased adoption of artificial intelligence (AI) and machine
learning (ML) for deeper insights and automation.
2. Continued growth of cloud-based BI solutions for greater
accessibility and scalability.
3. Focus on self-service BI tools that empower non-technical users to
analyze data.
4.Integration of BI with other business applications for a more holistic
view of operations

Leveraging Data and Knowledge for Business intelligence:

Leveraging Data and Knowledge for Business Intelligence In
today's data-driven world, businesses that are able to effectively
leverage data and knowledge have a significant competitive
advantage.
Business intelligence (BI) plays a crucial role in this process by
providing the tools and techniques to collect, analyze, and interpret
data, ultimately driving informed decision-making.
Here are some key ways that data and knowledge can be leveraged for
effective business intelligence:
1. Data Collection and Management
2. Data Analysis and Visualization
3. Knowledge Management and Sharing
4. Decision-Making and Optimization

1. Data Collection and Management:

• Collecting data from various sources: This includes internal
operational data, customer data, market research, and external data
sources.
• Data warehousing and cleansing: Ensuring the data is accurate,
complete, and consistent is essential for reliable analysis.
• Data governance: Establishing policies and procedures for data
access, security, and quality control.

2. Data Analysis and Visualization:

• Applying analytical techniques: This may include statistical
analysis, machine learning, and data mining to extract meaningful
insights from the data.
• Creating reports and dashboards: Visualizing data through charts,
graphs, and maps makes it easier to identify trends, patterns, and
anomalies.
• Real-time analytics: Monitoring data in real-time allows for quick
identification of issues and opportunities.
3. Knowledge Management and Sharing:
• Codifying knowledge and expertise: Capturing and storing valuable
knowledge from employees and experts.
• Creating knowledge bases and wikis: Making knowledge easily
accessible to all employees.
• Promoting knowledge sharing and collaboration: Encouraging
communication and knowledge sharing across teams.

4. Decision-Making and Optimization:

• Using data-driven insights to inform strategic decisions: This can
include product development, marketing campaigns, and resource
allocation.
• Predicting future trends and outcomes: Data analysis can help
predict customer behavior, market trends, and risks.
• Optimizing business processes: Identifying and implementing
improvements based on data analysis.

Benefits of Leveraging Data and Knowledge for Business

Intelligence:
• Improved decision-making: Data-driven decisions are more likely to
be accurate and effective.
• Increased operational efficiency: Identifying and eliminating
inefficiencies can save time and money.
• Enhanced customer experience: Data can be used to personalize
interactions and meet customer needs.
• Improved risk management: Identifying and mitigating risks can
protect the business from harm.
• Increased innovation: Data can be used to identify new opportunities
and develop new products and services.

Key Technologies for Leveraging Data and Knowledge:

• Big data platforms: These platforms are designed to handle large and
complex datasets.
• Cloud computing: Cloud-based BI solutions offer scalability and
flexibility.
• Data visualization tools: These tools help to create clear and
compelling presentations of data.
• Machine learning: Machine learning algorithms can automate data
analysis tasks and identify patterns that humans might miss.
• Natural language processing (NLP): NLP tools can be used to
analyze and extract insights from textual data.

Challenges and Considerations:

• Data quality: Ensuring data quality is essential for reliable analysis.
• Data security: Protecting sensitive data from unauthorized access is
crucial.
• Change management: Implementing BI solutions can require
changes to organizational processes and culture.
• Data literacy: Employees need to be trained on how to use and
understand data.
• Data governance: Establishing effective data governance policies
and procedures is important.
Conclusion:
Leveraging data and knowledge is essential for businesses in
today's competitive environment. By effectively utilizing BI tools and
techniques, businesses can gain valuable insights, make better
decisions, and achieve their strategic goals. However, it's important to
be aware of the challenges and considerations involved in
implementing a successful BI program.

Business intelligence Components

Business intelligence (BI) is a broad term encompassing various
technologies, tools, and processes that enable organizations to
transform raw data into actionable insights.
These insights can then be used to improve decision-making,
optimize processes, and ultimately drive business success. Several
key components contribute to a comprehensive BI solution. Let's
explore some of the most important ones:
1. Data sources
2. Data warehousing and data lakes
3. Data extraction, transformation, and loading (ETL/ELT):
4. Data analysis tools
5. Visualization tools
6. Infrastructure
7. Governance and security
8. People and processes:
1. Data sources:
• Internal data: This includes data from various internal systems like
CRM, ERP, marketing automation, and financial systems.
• External data: This includes data from market research reports,
social media, and industry publications.
• Big data: This refers to large, complex datasets that require
specialized tools and technologies for analysis.

2. Data warehousing and data lakes:

• Data warehouses: These are centralized repositories for storing and
managing large volumes of historical and structured data. They are
optimized for querying and analysis.
• Data lakes: These are flexible repositories for storing large volumes
of diverse data, including structured, semi-structured, and
unstructured data. They are ideal for exploration and discovery.

3.Data extraction, transformation, and loading (ETL/ELT):

• ETL: This process involves extracting data from various sources,
transforming it into a standardized format, and loading it into the data
warehouse or data lake.
• ELT: This process involves loading data into the data lake in its raw
format and then performing transformations as needed.

4. Data analysis tools:

• OLAP (Online Analytical Processing): This technology allows
users to analyse multi-dimensional data, drill down into specific areas
of interest, and analyse trends and patterns.
• Data mining: This involves using statistical and machine learning
techniques to extract hidden patterns and insights from large datasets.
• Predictive analytics: This uses historical data and statistical models
to predict future trends and events.

5. Visualization tools:
• Dashboards: These provide a real-time overview of key
performance indicators (KPIs) and other critical business metrics,
often using charts, graphs, and maps.
• Reports: These provide detailed insights into specific areas of the
business, often including tables, graphs, and text analysis.
• Data storytelling: This involves using data visualizations and
narratives to communicate insights and recommendations in a clear
and compelling way.

6. Infrastructure:
• Hardware: This includes servers, storage devices, and network
infrastructure needed to support the BI platform.
• Software: This includes the BI software itself, as well as any
additional tools needed for data integration, analysis, and
visualization.
• Cloud computing: Many organizations are turning to cloud-based
BI solutions for greater flexibility, scalability, and cost-efficiency.

7. Governance and security:

• Data governance: This ensures the accuracy, consistency, and
security of data throughout its lifecycle
• Data security: This protects sensitive data from unauthorized
access, use, disclosure, disruption, modification, or destruction.
8. People and processes:
• Business users: These are the people who use BI tools to access and
analyze data to make better decisions.
• BI professionals: These are the people who design, develop, and
maintain the BI platform and ensure its effective use throughout the
organization.
• Business processes: BI tools and insights need to be integrated into
existing business processes to ensure data-driven decision-making
becomes a part of the organizational culture.
By effectively utilizing these components, organizations can
unlock the full potential of business intelligence and gain a significant
competitive advantage.

Business Intelligence and Business Analytics

Business Intelligence (BI) and Business Analytics (BA) are
often used interchangeably, but there are some key distinctions
between the two. Here's a breakdown:

Business Intelligence (BI):

• Focus: Descriptive and diagnostic.
• Goals: Understand what happened and why.
• Data: Primarily historical and structured.
• Analysis: Primarily descriptive analytics, using dashboards and
reports to visualize trends and patterns.
• Tools: Reporting tools, data visualization tools, dashboards.
• Users: Business users, managers, executives.
• Outcomes: Improved operational efficiency, better decision-making
based on historical data.

Business Analytics (BA):

• Focus: Predictive and prescriptive.
• Goals: Predict what will happen and recommend what to do.
• Data: May include both historical and real-time data, structured and
unstructured data.
• Analysis: Primarily predictive and prescriptive analytics, using
machine learning and statistical models to forecast future trends and
identify optimal courses of action.
• Tools: Machine learning algorithms, statistical modelling tools, data
mining tools.
• Users: Data analysts, scientists, business stakeholders.
• Outcomes: Increased revenue, reduced costs, improved customer
experience, competitive advantage.
Here's a simple analogy:
• Think of BI as a rear view mirror. It helps you see where you've
been and understand what happened.
• Think of BA as a GPS. It helps you predict where you're going and
suggests the best route to take.

Relationship between BI and BA:

BI and BA are complementary disciplines. BI provides the
foundation for BA by collecting and organizing data. BA then uses
this data to generate insights and predictions that can inform business
decisions.
Many organizations are now embracing a combined approach,
leveraging both BI and BA to gain a comprehensive understanding of
their business and make data-driven decisions.

Additional points:
• BI is often considered a subset of BA.
• BA requires more advanced skills and tools than BI.
• The line between BI and BA can be blurry, and the terms are
sometimes used interchangeably.
• The specific focus of BI and BA can vary depending on the
organization and its needs. Ultimately, both BI and BA are valuable
tools for businesses of all sizes to gain insights from their data and
make better decisions.

Business Intelligence Life Cycle

The Business Intelligence (BI) life cycle is a continuous process of
collecting, storing, analyzing, and presenting data to gain insights that
drive better business decisions. It's an iterative cycle that evolves over
time as organizations adapt to new challenges and opportunities.
Here's a breakdown of the key stages in the BI life cycle:
1. Define Business Requirements:
• Identify business goals and objectives.
• Understand what data is needed to achieve those goals.
• Define key performance indicators (KPIs) to measure success.
2. Design and Build the BI Infrastructure:
• Select the right BI tools and technologies based on business
needs.
• Design the data warehouse or data lake.
• Develop ETL/ELT processes to integrate data from various
sources.

3. Data Acquisition and Integration:

• Extract data from various sources.
• Transform data into a format suitable for analysis.
• Load data into the data warehouse or data lake.

4. Data Analysis and Modelling:

• Clean and prepare the data for analysis.
• Perform data analysis using various techniques, such as OLAP
and data mining.
• Develop predictive models to forecast future trends and events.

5. Data Visualization and Reporting:

• Create dashboards and reports to communicate insights to
stakeholders.
• Use data visualization tools to present complex data in a clear
and concise way.
 • Develop data-driven narratives to explain insights and
recommendations.

6. Deploy and Monitor:

• Deploy the BI solution to users.
• Monitor the performance of the BI platform.
• Provide on going support and training to users.
7. Feedback and Iteration:
• Gather feedback from users on the effectiveness of the BI
solution.
• Use feedback to iterate and improve the BI platform.
• Adapt to changing business needs and requirements.
The BI life cycle is not a linear process. Organizations may need to
revisit earlier stages as their needs and understanding of data evolve.
The key is to create a flexible and iterative process that can adapt to
change.
Benefits of the Business Intelligence Life Cycle:
• Improved decision-making: By providing data-driven insights, BI
can help organizations make better decisions that are more likely to
lead to success.
• Increased efficiency and productivity: BI can help organizations
identify areas for improvement and automate manual processes,
leading to increased efficiency and productivity.
• Reduced costs: BI can help organizations identify and reduce costs,
such as waste and fraud.
• Improved customer satisfaction: BI can help organizations better
understand their customers and their needs, leading to improved
customer satisfaction.
• Enhanced competitive advantage: By using BI to gain insights into
their markets and competitors, organizations can gain a competitive
advantage.
Challenges of the Business Intelligence Life Cycle:
• Data quality: Data quality is essential for obtaining accurate and
reliable insights. Organizations need to implement data governance
and quality control procedures.
• Data integration: Integrating data from various sources can be
complex and challenging. Organizations need to have the right tools
and expertise in place.
• User adoption: Getting users to adopt and use BI tools effectively
can be difficult. Organizations need to provide training and support to
users.
• Cost: Implementing and maintaining a BI solution can be expensive.
Organizations need to carefully consider the costs and benefits
involved. By understanding the business intelligence life cycle and its
key stages, organizations can develop a successful BI strategy that
helps them achieve their business goals.
Business Intelligence Life Cycle

Phase 1: Analyze Business Requirements

The first step in the Business Intelligence life cycle is to analyze the
business requirements
The user identifies the business requirements in order to determine
the type of analysis that the user then needs to perform.
Phase 2: Design Data Model
Once the requirements are identified the user needs to design the
logical model according to the requirements.
Phase 3: Design the Physical
Once the logical model is prepared the next step is to design the
physical schema using the data model. The physical schema
describes the structure and the content of the data
warehouse.
Phase 4: Build the Data Warehouse
Once the logical and physical schema is designed, the next
step is to build the data warehouse. After the design of the
data warehouse, the data and the content from the source system
are loaded into the data warehouse for further steps.

Phase 5: Create the Project Structure

The next step after designing the data warehouse is to create a project
structure. Creating the project structure describes the further steps
and types that need to be implemented.

Phase 6: Develop The BI Objects

The next step is to develop the BI objects such as metrics, attributes,
dashboards, reports, and facts. This step consists of developing the
reports and dashboards that can be used to analyze the data in the
data warehouse.

Phase 7: Administer and Maintain the Project

The last step is to administer and maintain the project continuously as
it goes to changes. The project needs to be monitored to maintain the
changes, security, and performance of the system.
Business intelligence architectures:

Fig. Business intelligence architectures:

Operational systems:
Operational systems, also known as operational support systems
(OSS) are the backbone of an organization's day-to-day operations.
These systems are designed to manage the core business functions
and processes.
External data:
External data refers to information sourced from outside an
organization or system. It's data obtained from sources that are not
directly controlled or generated internally. This data plays a
significant role in internal datasets.
ETL- ETL performs three main functions Extraction Transformation
and Loading of data into the data warehouse.
Extraction-Data are extracted from the available internal and external
sources.
Transformation-The goal of the transformation phase is to
improve the quality of data extracted from the different sources.
Loading- After extraction and transformation, data are loaded
into the tables of the data warehouse

Data warehouse:
A data warehouse is a centralized warehouse that stores
structured, organized, and historical data from various sources within
an organization. It's designed to support business analysis, reporting,
and decision-making processes
Logistics:
Logistics is the process of planning, implementing, and
controlling the efficient flow and storage of services, and information
from the point of origin to the point of consumption.
Marketing:
Involves understanding customer needs, creating offerings
that satisfy those needs, and communicating the value of those
offerings to target audiences.
Performance evaluation
Performance evaluation is the process of assessing an
individual's, team's, or organization's performance against predefined
goals, objectives.
Difference between Business Intelligence and Business
Analytics:

Aspect Business Intelligence Business Analytics

Data Focus Structured historical data Structured and
unstructured data for
analysis
Scope Monitoring and reporting Explores trends patterns
and future possibilities
Skill required Generally user friendly Requires specialized skill
Use of data Past and current dataset Past current and future
dataset
BI for current operation BA for future commerce
operation
BI is data driven BA is process driven
Goal Understand what Predict what will happen
happened and why. and recommend what to
do

Extra info BI architecture

Business intelligence architecture
A business intelligence (BI) architecture serves as the underlying
framework for implementing and leveraging.
BI tools and technologies within an organization. It defines the
standards, principles, and guidelines for data management, analytics,
and technology, ultimately supporting effective decision-making.
Here are three main types of BI architectures:
1. Traditional Architecture:

2. Data Lake Architecture:

3. Cloud-based Architecture
1. Traditional Architecture:
• Centralized: Data is stored in a central data warehouse, often a
relational database.
• ETL-based: Data is extracted, transformed, and loaded into the data
warehouse before being analyzed.
• Batch processing: Data is analyzed and reports are generated at
regular intervals.
• Suitable for: Organizations with relatively static data and well-
defined reporting needs.
2. Data Lake Architecture:
• Decentralized: Data is stored in its raw format in a data lake, often a
scalable storage system like Hadoop.
• ELT-based: Data is loaded into the data lake first and then
transformed as needed for analysis.
• Real-time processing: Data can be analyzed in real-time or near real-
time.
• Suitable for: Organizations with large volumes of diverse data and
evolving analytics needs.
3. Cloud-based Architecture:
• Hosted in the cloud: BI platforms and data are hosted in a cloud
environment, such as AWS, Azure, or Google Cloud Platform.
• Scalable and flexible: Resources can be easily scaled up or down to
meet changing needs.
• Cost-effective: Eliminates the need for significant upfront
investment in hardware and software.
• Suitable for: Organizations of all sizes that want a flexible and cost-
effective BI solution.
Choosing the Right BI Architecture: The best BI architecture for your
organization depends on several factors, including:
• Data size and complexity: The volume, variety, and velocity of your
data will influence the type of architecture needed.
• Analytics needs: The type of analysis you need to perform (e.g., ad-
hoc analysis, complex modeling) will determine the required
processing capabilities.
• Budget and resources: The cost of hardware, software, and
personnel will need to be considered.
• IT infrastructure and expertise: Your existing IT infrastructure and
team's expertise will influence the ease of implementing and
maintaining a particular architecture.
By carefully considering your specific needs and challenges, you can
choose the BI architecture that best supports your organization's data-
driven decision-making journey.
Beyond these three main types, here are some additional architectural
considerations:
• Hybrid architectures: Combining elements of different architectures
can be beneficial for organizations with diverse needs.
• Self-service BI: Empowering users to access and analyze data
without relying on IT can improve agility and responsiveness.
• Data governance and security: Implementing robust data governance
and security measures is essential to ensure data accuracy, privacy,
and compliance.
• Integration with other systems: BI systems need to be integrated
with other enterprise systems to provide a holistic view of business
performance. Remember, a successful BI architecture is not static.
It needs to evolve and adapt to changing business priorities and
technological advancements. By continuously reviewing and
optimizing your architecture, you can ensure that you are maximizing
the value of your BI investment.

Business intelligence Effective and timely decisions.

Business Intelligence: Effective and Timely Decisions Business
intelligence (BI) empowers organizations to make more effective and
timely decisions. By transforming raw data into actionable insights,
BI provides a clear view of past performance, current trends,and
future possibilities.
Here's how BI facilitates effective and timely decision-making:
1. Improved Data Visibility and Accessibility:
• BI tools and platforms gather data from various sources, including
internal systems, external sources, and big data repositories.
• This consolidated data makes it readily available and easily
accessible to authorized users across the organization.
• Increased data visibility removes information silos and fosters
collaboration, enabling faster and more informed decisions.
2. Enhanced Data Analysis and Interpretation:
• BI tools provide sophisticated analytics capabilities, including
OLAP, data mining, and predictive analytics.
• These tools help users analyze data from different perspectives,
identify hidden patterns and trends, and make sense of complex
information.
• By uncovering deeper insights, BI enables proactive decision-
making based on data-driven evidence rather than intuition or
guesswork.
3. Real-time Insights and Monitoring:
• Modern BI platforms offer real-time data dashboards that provide
constantly updated insights into key performance indicators (KPIs).
• This enables proactive monitoring of critical business metrics and
allows timely interventions to address potential issues or capitalize on
emerging opportunities.
• With real-time insights, organizations can react quickly to market
changes, customer behavior, and competitor actions, ensuring agility
and responsiveness.
4. Data-driven Decision Support and Recommendations:
• BI tools can be configured to provide automated recommendations
and alerts based on predefined criteria.
• This helps decision-makers identify potential risks, opportunities,
and areas for improvement.
• By leveraging data-driven recommendations, organizations can
make more informed and objective decisions, minimizing the risk of
bias and human error.
5. Improved Communication and Collaboration:
• BI tools facilitate data storytelling through interactive dashboards
and reports, simplifying complex data and making it easier to
communicate insights to stakeholders.
• This fosters collaboration across departments and teams, enabling
everyone to work towards shared goals and objectives.
• By breaking down information silos and promoting transparency, BI
strengthens organizational alignment and decision-making.
**Overall, BI empowers organizations to make: **
• More effective decisions: By providing data-driven insights, BI
removes guesswork and leads to better-informed choices.
• More timely decisions: Real-time data and alerts enable
organizations to react quickly to changes and capitalize on
opportunities.
• More confident decisions: Data-driven evidence reduces risk and
uncertainty, leading to increased confidence in decision-making.
Examples of Effective and Timely Decisions with BI:
• Retailers: Analyze sales data to identify trends and adjust inventory
levels in real-time, preventing stockouts and overstocking.
• Financial institutions: Analyze customer data to identify potential
fraud risks and take immediate action to protect customers and assets.
• Healthcare providers: Analyze patient data to identify outbreaks of
diseases and implement targeted interventions to improve public
health outcomes.
• Marketing teams: Analyze campaign performance data to optimize
campaigns and maximize marketing ROI.
• Manufacturing companies: Analyze production data to identify
bottlenecks and optimize production processes for increased
efficiency and cost savings.
In conclusion, BI plays a critical role in driving organizational success
by enabling effective and timely decision-making. By unlocking the
power of data, organizations can gain a competitive edge and achieve
their strategic objectives