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Chapter 1-445

The document provides an overview of Business Intelligence (BI), analytics, and decision support systems, highlighting the complexities of today's business environment and the need for computerized decision support. It discusses the Business Pressures–Responses–Support Model, managerial decision-making processes, and the evolution of BI from earlier systems to modern applications. Additionally, it outlines the architecture of BI systems and the role of analytics in transforming data into actionable insights.

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Truong Sakurako
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9 views7 pages

Chapter 1-445

The document provides an overview of Business Intelligence (BI), analytics, and decision support systems, highlighting the complexities of today's business environment and the need for computerized decision support. It discusses the Business Pressures–Responses–Support Model, managerial decision-making processes, and the evolution of BI from earlier systems to modern applications. Additionally, it outlines the architecture of BI systems and the role of analytics in transforming data into actionable insights.

Uploaded by

Truong Sakurako
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Fatimah AL-Shaikh

Chapter 1:

An Overview of Business Intelligence, Analytics, and Decision Support


Changing Business Environment & Computerized Decision Support

 Companies are moving aggressively to computerized support of their operations 


Business Intelligence
 Business Pressures–Responses–Support Model
 Business pressures result of today's competitive business climate
 Responses to counter the pressures
 Support to better facilitate the process
Business Pressures–Responses–Support Model

The Business Environment

 The environment in which organizations operate today is becoming more and more
complex, creating
 opportunities, and
 problems.
 Example: globalization.
 Business environment factors:
 markets, consumer demands, technology, and societal…
Fatimah AL-Shaikh

Business Environment Factors

Organizational Responses

 Be Reactive, Anticipative, Adaptive, and Proactive


 Managers may take actions, such as
 Employ strategic planning.
 Use new and innovative business models.
 Restructure business processes.
 Participate in business alliances.
 Improve corporate information systems.
 … more [in your book]
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.
Managerial Decision Making

 Management is a process by which organizational goals are achieved by using resources.


 Inputs: resources
 Output: attainment of goals
 Measure of success: outputs / inputs
 Management  Decision Making
 Decision making: selecting the best solution from two or more alternatives
Fatimah AL-Shaikh

The Nature of Managers’ Work


Mintzberg's 10 Managerial Roles

Interpersonal
1. Figurehead
2. Leader
3. Liaison
Informational
4. Monitor
5. Disseminator
6. Spokesperson

Decisional
7. Entrepreneur
8. Disturbance handler
9. Resource allocator
10. Negotiator

Decision-Making Process

 Managers usually make decisions by following a four-step process (a.k.a. the scientific
approach)
1. Define the problem (or opportunity)
2. Construct a model that describes the real-world problem.
3. Identify possible solutions to the modeled problem and evaluate the solutions.
4. Compare, choose, and recommend a potential solution to the problem.
Information Systems Support for Decision Making

 Group communication and collaboration


 Improved data management
 Managing data warehouses and Big Data
 Analytical support
 Overcoming cognitive limits in processing and storing information
 Knowledge management
 Anywhere, anytime support
Fatimah AL-Shaikh

An Early Decision Support Framework (by Gory and Scott-Morten, 1971)

An Early Decision Support Framework

 Degree of Structuredness (Simon, 1977)


 Decisions are classified as
 Highly structured (a.k.a. programmed)
 Semi-structured
 Highly unstructured (i.e., nonprogrammed)
 Types of Control (Anthony, 1965)
 Strategic planning (top-level, long-range)
 Management control (tactical planning)
 Operational control
The Concept of DSS

 DSS - interactive computer-based systems, which help decision makers utilize data and
models to solve unstructured problems
(Gorry and Scott-Morton, 1971)
 Decision support systems couple the intellectual resources of individuals with the
capabilities of the computer to improve the quality of decisions.
 DS as an Umbrella Term
 Evolution of DS into Business Intelligence
Fatimah AL-Shaikh

A Framework for Business Intelligence (BI)

 BI is an evolution of decision support concepts over time


 Then: Executive Information System
 Now: Everybody’s Information System (BI)
 BI systems are enhanced with additional visualizations, alerts, and performance
measurement capabilities
 The term BI emerged from industry
Definition of BI

 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

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 - Inclusion of AI and Data/Text Mining capabilities; Web-based Portals/Dashboards, Big
Data, Social Media, Analytics
 2020s - yet to be seen
The Evolution of BI Capabilities
Fatimah AL-Shaikh

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

Business Value of BI Analytical Applications

 Customer segmentation
 Propensity to buy
 Customer profitability
 Fraud detection
 Customer attrition
 Channel optimization
DSS-BI Connections

 Similarities and differences?


 Similar architectures, data focus, …
 Direct vs. indirect support
 Different target audiences
 Commercially available systems versus in-house development of solutions
 Origination – Industry vs. Academia
 So, is DSS = BI ?
Fatimah AL-Shaikh

Analytics Overview

 Analytics?
 Something new or just a new name for …
 A Simple Taxonomy of Analytics (proposed by INFORMS)
 Descriptive Analytics
 Predictive Analytics
 Prescriptive Analytics
Analytics or Data Science?

Analytics Overview

Introduction to Big Data Analytics

 Big Data?
 Not just big!
 Volume
 Variety
 Velocity
 More of Big Data and related analytics tools and techniques are covered in Chapter 13.

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