UNIT-5

Role of Business Intelligence &

analytics in Business
• Business Analytics is the process by which businesses use
statistical methods and technologies for analyzing historical
data in order to gain new insight and improve strategic
decision-making.
• Business analytics intents to
– Boost profitability
– Get new customers
– Maintains customers
– Decreases the response time to customer
complaints.
Types of Business Analytics :
Based on the phase of workflow and the kind of analysis required, there are 4 major
types of Business analytics. These include the following:

1. Descriptive analytics
2. Diagnostic analytics
3. Predictive analytics
4. Prescriptive analytics

Different Types Of Business Analytics

Let me take you through the main types of analytics and the scenarios under which
they are normally employed.
1. Descriptive Analytics
As the name implies, descriptive analysis or statistics can summarize raw data and
convert it into a form that can be easily understood by humans. They can describe in
detail about an event that has occurred in the past. This type of analytics is helpful in
deriving any pattern if any from past events or drawing interpretations from them
so that better strategies for the future can be framed
This is the most frequently used type of analytics across organizations. It’s crucial in
revealing the key metrics and measures within any business.
2 . Diagnostic Analytics
The obvious successor to descriptive analytics is diagnostic analytics.
Diagnostic analytical tools aid an analyst to dig deeper into an issue at hand so
that they can arrive at the source of a problem.
In a structured business environment, tools for both descriptive and diagnostic
analytics go hand-in-hand!

3. Predictive Analytics
Any business that is pursuing success should have foresight. Predictive analytics
helps businesses to forecast trends based on the current events. Whether it’s
predicting the probability of an event happening in future or estimating the
accurate time it will happen can all be determined with the help of predictive
analytical models.
Usually, many different but co-dependent variables are analyzed to predict a
trend in this type of analysis. For example, in the healthcare domain, prospective
health risks can be predicted based on an individual’s habits/diet/genetic
composition. Therefore, these models are most important across various fields.
4. Prescriptive Analytics
This type of analytics explains the step-by-step process in a situation. For
instance, a prescriptive analysis is what comes into play when your Uber
driver gets the easier route from Gmaps. The best route was chosen by
considering the distance of every available route from your pick-up route to
the destination and the traffic constraints on each road.
ess Intelligence vs Business Analytics Comparision Table
BI SOLUTION MAJOR COMPONENT

1. Reporting tool
2. ETL tool
BI SOLUTION MAJOR COMPONENT
1. Online Analytical Processing (OLAP)
This technology stands behind the majority of business intelligence applications.
It deals with data discovery as well as capabilities for report viewing, complex
calculations for analytics, and assistance with “what if” scenario planning.
OLAP analyzes business information in a multi-dimensional manner to assist
with complex calculations, trend analysis, and data modeling. With OLAP, the
end-user gets an opportunity to analyze specific data in multiple
dimensions to obtain the necessary insight for making a decision.
Businesses are constantly bringing information together to perform different
analysis. They have a sharp need to get all the data in one place to achieve an
accurate and reliable understanding of different aspects of the data. OLAP can
help them achieve just that: get quick access to multi-dimensional analysis
results.
What makes OLAP software different from other analytics tools is the ability to
store information in a multidimensional database structure. Dimensions to use
are locations, periods, employees, products, accounts, etc.
2. Corporate Performance Management
Corporate Performance Management (CPM) encompasses methods,
metrics, activities, and systems, which are used to monitor and manage the
business performance of a company. CPM software processes the focused
information to turn it into operational plans.
This process and methodology offer business owners an integrated approach to
planning, forecasting for finance, sales, marketing, HR, and operations. When this
methodology is implemented, it joins company strategies with plans and
executions, thus helping a business succeed and improve.
CPM is an important component of business intelligence for companies that are
looking for such changes as budget remodeling, cost-cutting, upgrading
organization strategy, better KPIs alignment, and improving the process of
financial planning.
According to software experts at Tricension, cloud-based CPM software makes it
easier to deploy the process, reduce costs, and up the information speed and
flexibility. It allows the company to automate numerous manual tasks, and
improve the alignment between finance and operations.
3. Real-Time Business Intelligence
Real-time business intelligence (RTBI) is used when sorting, and analyzing
business data and operations have to be done at the collection stage. Real-
time BI allows the company to get insights into the business process as
quickly as possible to take strategic action.
This BI component is demanded when live business insight is required, which is
not a rarity in the fast-paced environment of some industries.
RTBI is becoming especially popular in fast-paced modern society. Using
software designed for RTBI, a company can create quick responses to real-time
trends over email, apps, messengers, etc.
For example, RTBI can help create special offers at the most suitable time
possible to get the highest conversion rate. Another example is limited-time
specials for restaurants or supermarkets that have to do with perishable products
and high demands at certain times of the day.
All of the above can be done while the client is on the website and near one of the
company’s physical locations.
4. Data Warehousing
Data warehousing allows the business owner to go through different
data subsets and examine components that could help make the right
business decisions. For example, warehousing gives a user an opportunity
to monitor certain sales information collected on Mondays for the past 50
weeks.
It helps create important statistics about the business and the industry.
Warehousing implies storing formidable amounts of data in numerous
special ways, which could be useful for analysis.
Different technologies exist to help the user take advantage of data
warehousing quickly and effectively.
Technically, the data warehouse regularly receives data from apps and
systems used by the company. The data is formatted and imported to match
the data already stored in the warehouse. The processed data becomes
readily available to the end-users to help them make business decisions.
The organization chooses how often the data should be obtained from apps
and systems depending on its particular needs and requirements.
It’s worth noting that a data warehouse is different from a simple database.
Data warehouses are created to help perform an analysis of a large volume
of data. Their goal is to receive and process information in the shortest
period of time possible.
5. Data Sources
For the business intelligence process and methodology to be
integrated, it is important to have the right understanding of the data
sources. Pulling raw data from different sources, internal and external
is vital to the diverse analysis options.
Companies tend to store huge amounts of operational data. BI needs
to navigate between the data sources. In most companies, mainframe
legacy systems create a foundation for the data centers because they
can deal with large volumes of data. However, such data is usually
difficult to procure since many legacy apps are often obsolete or
proprietary. Operational data sources to take advantage of are:
› Enterprise Resource Planning – stores a large amount of
transaction data, which can be used in BI environments.
› CRM (Customer Relationship Management) – an excellent source of
data for BI since these systems store and analyze customer behavior
and important data, such as purchase activity.
› E-Commerce Apps – these apps can be a great source of data for
BI since they offer real-time sales activity.
1. Turn Data into Actionable Information
According to BI-Survey.com, over 50 percent  of businesses using BI tools said
they achieved their goal of making better decisions and were able to predict
trends and patterns.  Data captured from portals, CRM’s, ERP’s, websites and
much more allow BI solutions to analyze comprehensive data to identify
significant trends that can be used to modify or implement strategic plans.  As
such, BI system can help you understand and improve various organizational
processes and enhance your ability to identify key opportunities and/or threats
thus enabling you to plan for a successful future.
2. To Boost Productivity
An increasing number of organizations have found business intelligence as a
critical tool to ensure competitiveness and productivity.  Management teams are
aware of the daily challenges trying to assess raw data manually. With BI
solutions, managers can retrieve, analyze and share information across various
departments. This allows the executive team to respond more intelligently to
trends in production, material usage, labor, supplier information and more.
 Ultimately, BI makes the process of analyzing and interpreting data faster and
more efficient, ultimately improving your productivity.
3. Insights into Consumer Behavior
Meeting customer’s needs is what drives a business forward. One of the main
advantages of investing in BI is the fact that it will boost your ability to discover and
analyze the current consumer buying patterns and trends. Once you understand what
your consumers are buying, you can use this information to develop products and
services that match the current consumption trends resulting in an increase in ROI
through improved customer satisfaction and brand reputation. In fact, companies
using BI consider that customer behavior analysis is giving them a real competitive
advantage.
4. To Gain Sales & Market Intelligence
BI improves your marketing and sales intelligence by keeping track of data about your
customers. It also allows you to understand how they interact with your organization at
a deeper level, so you can identify solutions to your customer issues and better reach
your customers with targeted messages to increase sales. Also, it helps with sales
planning and forecasts, to manage productivity. For one example, many organization
has a Customer Relationship Management (CRM) system, which collects the data
about your customer and presents it to you in various tables and charts. You can
analyze an entire sales cycle, track existing customers, and provide post-sales
services. CRM systems are now more involved in decision-support processes than
ever before.
5. To Improve Visibility
The only constant is change and your company’s ability to understand,
accept and apply strategies to manage this change will determine your
success. Business Intelligence will provide organizations with the necessary
data visibility through dashboards and reports that help you see the
connections and correlations between different data sets. If you want to
improve control over various essential processes in your organization, BI will
enhance the visibility of these processes and make it possible to any pinpoint
any areas that need improvement. Whether it is errors in your
invoicing/billing, supply chain and/ or identifying your best performers –
visibility is essential.
Business intelligence will continue to change from reactionary to proactive
decision making.  BI Modern BI will create even more interest with cloud
deployments, data visualization, and algorithms.  Business intelligence
ultimately delivers a better experience for your customers and employees as
well as increased brand recognition – providing a real competitive edge.  Let
us consult with your organization to turn your data into real insights.
Reasons of important role of Business Intelligence in ERP
 Importance of BI in ERP Systems:

BI plays an extremely critical role in ERP systems by providing a bird’s eye view
of the entire business in an easy-to-understand format along with predictions,
analysis, trends and extrapolations. Some of the key elements of BI are:
Data Analysis: This is the core element of BI where the large store of data
collated from all functions in an organization is used for analysis and to guide
management decisions.
Data Legacy: With an effective BI Tool, the correct analysis of data can be
made of the legacy data collected from previous processes or software as well.
This analysis of legacy data without an effective BI Tool becomes extremely
difficult otherwise.
Faster and Informed Decision Making: If the right Business Intelligence tool is
in place the organizations need not rely on assumptions for taking important
decisions. BI helps organizations to interpret relevant trends and patterns from
the collected data and enable the management to take quick & well-informed
decisions.
Advantage of a BI solution in ERP
A.Organisation specific Analytics
BI solution offers analytics that are personalised to the
organisations explicit business rule.

B.Drill-through- potential.
Drill down and drill through are two extremely powerful
features in business intelligence. They both give the user the ability to
see data and information in more detail–although they do so in
different fashions.

C.Customised Reports
Offers drag drop facility to analyze data and produce
quality results using model templets.

D.Comprehensive analytics
BI solution combine ERP data with other transaction oriented
data external to the ERP solution.,providing business executives to analyze
data from various sources.
Impact of BI applications on aspect of CRM
1. Maximize the return on marketing campaigns.
2.Improve customer retention.
3.Maximize customer Value
4.Identify and delight highly value customer
5.Manage brand image.
Objectives for BI and CRM Integration Project

1 collection and consolidation of Data-

For keeping focus on task and reduce the data collection overload
on CRM system.

2.Missing Data

3.Duplicate Data- by using BI tools Data duplication can be reduced

to greater extent.
BI Applications in marketing

1. Categorize and focus on customers with high profitability.

2. Increase the accuracy of sales forecasts.
3. Measure the effect of your marketing programs
 BI Software for User Activity Analysis

There is a wealth of valuable business intelligence available in the user activity

data generated by Internet businesses such as these:

Online gaming
Online auctions
Online Website creation
Online dating
Online financial services
Online colleges
Social networking sites
Photo sharing sites
File sharing networks
Online surveys
Video on demand
Voice over IP
User Activity Analytics Yields Significant Business
Benefits
Accurate insight into how people are using your online service yields many
compelling business benefits.
Examples include:
Improve conversion rates of trial users to paying users Example: Identify
the activities in which trial users are most interested (or where they are getting
stuck) and send them emails which help them in those particular areas.
Identify hot leads Example: Target prospects who have used the trial version
on multiple days, or when multiple users from the same company are using the
trial version.
Improve marketing campaign effectiveness Example: Identify the most-used
features and then highlight those features in advertising campaigns.
Determine which marketing campaigns lead to the most profitable
customers Example: Cross-reference customers’ activity and accumulated
spend with the marketing campaigns which brought them to the site.
Discover which features are getting the most/least use Example: On a
VOD site, analyze Start/Stop/Pause/FF/Rew activity. On an auction site,
analyze item views/bids/competition.
Reveal technical problems which are hindering your service Example: In
the hours following a new software version, notice the dramatic drop in the
usage of a particular module.
BI Application in logistics and Production

A. Service Improvement
B. B. Improve Organizational Support Functions
C. Provide IT based Services.
 Role of BI in Finance

1.Predict changes in bond and stock prices

2.Assess the effect of events on market movements
3.prevent fraudulent activities
4.Bankruptcy prediction

Role of BI in Banking

1. Automate the loan application process

2. Detect fraudulent transaction
3. Maximize customer value
4. Optimize cash reserves with forecasting
 Role of BI in Finance and Banking
Risk management
 
In a promptly changing and uncertain financial world, banking institutions
need to rely more on fact-based actionable information, gleaned from ever-
increasing data assets, to reduce risk wherever possible. The actionable
information generated by a BI solution can mitigate risk in the banking sector
by:
Quickly and efficiently detecting and reducing incidents of fraudulent activity
(eg: cases of credit card fraud) by tracking customer transaction history
Calculating the probability that a customer will default on a loan and
estimating the cost of recovery
Accurately estimating the risk of customer loans based on:
The financial assets and earning capacity of the borrower
The prevailing economic climate
Analyzing credit portfolios, enabling banks to quickly identify potential
delinquency cases, and act early as a preventative measure. Data
analysis can also analyze trends in customer delinquency, from which new
policies can be developed, to reduce the rates of delinquency cases in the
future.
Ensuring compliance with statutory and regulatory requirements
 
Improve operational efficiencies and boost profits
 
Banks can reduce ongoing costs, and maximize existing resources and expertise, by
analyzing operational processes and activities to:
Generate massive internal efficiencies (eg: analyzing the performance of sales
personnel, tellers and account managers)
Understand growth patterns to maximize the chance of repeatability
Track individual revenue streams to determine profitable and non-profitable services
and products
Set key benchmarks for crucial metrics such as the number of net new customers and
their profitability, compare them against industry standards, and track them towards
defined goals
Develop more effective marketing and sales campaigns through detailed and accurate
customer segmentation
Analyze and serve customer segments according to costs, profits and services used
Identify and actively retain and pursue profitable customers
Customer segmentation
 
A world-class BI solution allows banking institutions to accurately and efficiently
segment their customer-based to:
Effectively tailor products and services: Better understand customer needs
and sentiments regarding banking, and as a consequence, develop, implement
and offer new market-leading financial products and services to gain and
maintain competitive advantage
Effective customer profiling: Analyze the data stored in the core banking
CRM based on a range of customer segmentations and geographies to
uncover the ideal / most profitable customer profile. The customer base can be
analyzed to determine profitability across branches and products, and identify
and develop new cross-sell and up-sell opportunities and marketing campaigns
accordingly. This is crucial, as research indicates that the cost of selling new
banking products and services to an existing customer is five times lower than
to a new customer. In addition, cross-selling strengthens customer relationships
and loyalty.
Improve customer satisfaction through understanding and transparency
 
Banks can further increase customer satisfaction ratings by proactively
harnessing data to give clients superior insight into their individual transitional
operations, allowing them to more effectively manage their finances by having:
Real-time understanding of payments
Real-time understating of spending
 
This will enable customers to more easily manage finances by being able to track
and analyze their spending and earning patterns.
In addition, analysis of customer point-of-contact data can help institutions
understand customer sentiment and behaviours in order to:
Effectively and efficiently satisfy customer needs and demands
Win-over competitors customers
 
Securing existing customers and reducing churn rate
 
Data mining and analysis techniques can be used to effectively maintain
customers by:
Uncovering the reasons behind customers switching to a competing institution.
New processes can then be implemented to reduce churn rates.
Tracking changes in customer behaviour so products of services can be tailored
accordingly
Thank You!!!!