Staff- Dr. Jocelyn San Pedro
Introduction to Business Intelligent Systems
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Week 1 Dr. Jocelyn San Pedro School of Information Management & Systems Monash University
IMS3001 – BUSINESS INTELLIGENCE SYSTEMS – SEM 1 , 2004
T1.28 Level 1, Building T, Caulfield Campus
[email protected] www.sims.monash.edu.au/staff/jsanpedro Email correspondence: ! Subject: IMS3001 ! Email enquiries anytime, but expect replies by Thursday PM ! Consultation Hours: 2-3 PM Tu,Th,Fri (by appointment) IMS3001 – BUSINESS INTELLIGENCE SYSTEMS – SEM 1 , 2004
The Unit
Synopsis
! 2-Hour lecture per week ! 2-Hour tutorial per week ! Tutorials begin in Week 2 (i.e. next week) ! Please make sure you are assigned to a tutorial in Allocate+ ! no student will be admitted to a tutorial unless they are on the class list.
! evolution and current state of the art of the theory and practice of business intelligence systems; ! role of these business intelligence systems in providing intelligence information to business decision makers ! development process and some key techniques that support it
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IMS3001 – BUSINESS INTELLIGENCE SYSTEMS – SEM 1 , 2004
Aim
Objectives
! provide students with introductory knowledge of concepts, development and use of business intelligence systems
At the completion of this unit the students will: ! have knowledge of:
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! the scope and application of business intelligence systems ! the role of business intelligence systems in supporting business decision making ! the major approaches to the development of business intelligent systems ! evolution of business intelligence systems
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Objectives
Objectives
! have an understanding of:
have developed attitudes which enable them to: ! identify and evaluate business intelligence opportunities ! plan for business intelligence solution and implementation ! work closely with business intelligence team
! the process of business intelligence systems development ! current state of the art of the theory and practice of business intelligence systems
! have the skills to: ! organise, analyse and interpret data for the purpose of supporting business decision making ! understand managerial problem solving activity as well as problem finding activity for supporting business decision making
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Assessment
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Lecture 1 - Outline ! What is Business Intelligence (BI)? ! What is Business Intelligence System (BIS)? ! What is the role of BIS in supporting business decision making? ! How did BIS evolve?
Class Participation Value 10% in tutorials ! Assignment Value 30% due Week 9, during tutorial ! Exam, Value 60% Overall Assessment 100%
IMS3001 – BUSINESS INTELLIGENCE SYSTEMS – SEM 1 , 2004
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Learning Objectives ! Define business intelligence (BI) and business intelligence systems (BIS) ! Explain the role of BIS in supporting business decision making; ! Identify the different BIS that were introduced in the past and explain how such systems supported business decision making IMS3001 – BUSINESS INTELLIGENCE SYSTEMS – SEM 1 , 2004
What is Business Intelligence?
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What is Business Intelligence?
What is Business Intelligence?
According to vendors: ! a segment of information technology that comprises software systems that enable finding, storing, organising and supplying data; when incorporated into an information system, it enables company to utilise real-time analysis of information
! software that enables business users to see and use large amounts of complex data (e.g. multidimensional analysis, query tools, data mining tools) SDG Computing www.sdgcomputing.com
Information Technology Toolbox www.ITToolbox.com
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What is Business Intelligence?
What is Business Intelligence?
! a category of applications and technologies for gathering, storing, analysing, reporting on and providing access to data to help enterprise users make better business decisions
! markets business performance software, comprised of three subcategories that includes ad hoc query and analysis, reporting/OLAP, executive information systems and analytical applications
Cognos (www.cognos.com)
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Brio (www.brio.com)
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What is Business Intelligence?
What is Business Intelligence?
! a set of concepts and methods to improve business decision making by using fact-based support systems (e.g. briefing books and executive information systems in the 1990s)
! BI lets organisations access, analyse, and share information internally with employees and externally with customers, suppliers, and partners Business Objects www.businessobjects.com
Gartner Group www.gartner.com
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What is Business Intelligence?
What is Business Intelligence?
! BI helps corporations transform their operational data into actionable information; helps meet query reporting and advanced analytical needs MicroStrategy www.microstrategy.com
! BI is a performance management framework, an ongoing cycle by which companies set their goals, analyze their progress, gain insight, take action, measure their success, and start all over again ! It helps decision makers make better decisions faster at both strategic and operating levels Vitt, Luckevich and Misner (2002) Microsoft Corporation
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What is Business Intelligence?
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What is Business Intelligence? ! Processed information vs. data
According to non-vendors:
! data - raw material that is composed of facts ! intelligence information - information digested, analysed, and interpreted for the purpose of decision making
! BI is processed information of interest to management about the present and future environment in which business is operating
! Management has crucial role in BI, determines ! what will be in the domain of BI ! what information if of interest or relevant to its decision
! Company’s environment ! Present environment (mostly for tactical intelligence) ! Future environment (mostly for strategic intelligence)
Greene (1966) IMS3001 – BUSINESS INTELLIGENCE SYSTEMS – SEM 1 , 2004
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Greene (1966) (cont) IMS3001 – BUSINESS INTELLIGENCE SYSTEMS – SEM 1 , 2004
What is Business Intelligence?
What is Business Intelligence?
! Operational Intelligence ! Affects operational levels of organisation on daily, weekly, monthly basis ! Tactical Intelligence ! Affects a part of organisation for a limited time (i.e., coming year) into the future ! Strategic Intelligence ! Affects the entire organisation, or a major part of it for a long period of time (i.e., 2 - 5 years and beyond) ! PURPOSE OF BI ! Shift from reliance on short-term tactical decisions to better use of strategic intelligence in the decision-making process Greene (1966) (cont)
! BI results from full appraisal of information, past actions, and options; once sown, it tends to propagate itself across an organisation
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Liautuad and Hammond (2000)
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What is Business Intelligence?
What is Business Intelligence?
! BI refers to the ability to understand the interrelationships of presented facts – whether they involve data, information and/or knowledge – in such a way to guide action toward one or more desired goals
! Relationship of intelligence to various levels of summarisation
Thierauf (2001)
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! Data – unstructured data ! Information – structured data useful for analysis ! Knowledge - obtained from experts based on actual experience ! Intelligence – keen insight into understanding important relationships Thierauf (2001)
IMS3001 – BUSINESS INTELLIGENCE SYSTEMS – SEM 1 , 2004
What is Business Intelligence?
For this UNIT – IMS3001
! BI centers on computerised methods and processes to improve strategic, tactical and operational decisions using data, information, and knowledge from multiple sources as well as applying experience and assumptions to develop an accurate understanding of the dynamic surrounding decision making
! We shall adopt the definition of BI by non-vendors – process, organisational function, product ! Processing of information – collecting, organising, analysing, gaining insight, interpreting, reporting data, taking action, measuring the benefits of such actions for the purpose of supporting decision making ! Generally in the context of decision support
Thierauf (2001) (cont)
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What is Business Intelligence System? ! BIS is an information system that provides BI to business decision makers at different levels of organisation (operational, tactical, strategic levels)
What is a Business Intelligence System?
IMS3001 – BUSINESS INTELLIGENCE SYSTEMS – SEM 1 , 2004
! BIS is an information system that turns selected data, information, and/or knowledge into desired intelligence for business gain (Thierauf, 2001)
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Role of BIS ! Provide decision makers with the ability to understand (i.e., the intelligence to gain insights into) the relationships of presented facts in the form of data, information, and knowledge in order to guide action toward a desired actionable goal (Thierauf, 2001)
What is the role of Business Intelligence System?
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Role of BIS ! Provide decision makers with timely data, information and knowledge for problem solving, and problem finding ! Past : Decision making as Problem Solving activity
How did Business Intelligence Systems evolve?
! Reactive approach –use of appropriate management technologies to resolve current problems as they arise
! Current: Business intelligence activity as problem solving, as well as problem finding ! Proactive, preventive approach – anticipating future company problems; looking for future opportunities
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(Turban and Aronson, 2001)
Computer-based Support Systems technologies !
1950s 1960s 1970s
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1980s
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1990s
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Attributes of ComputerComputer-based Support Systems
Evolution of BIS !
IMS3001 – BUSINESS INTELLIGENCE SYSTEMS – SEM 1 , 2004
Dimension Applications
Transaction Processing Systems (TPS) Management Information Systems (MIS) Office Automation Systems Decision Support Systems (DSS) DSS Expanded Commercial applications of Expert Systems Executive Information Systems (EIS) Group Support Systems Neural Computing Integrated, hybrid computer systems Turban and Aronson (2001)
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TPS
Payroll, inventory, record keeping, production and sales information
MIS
Production control, sales forecasting, monitoring
DSS
Long-range strategic planning, complex integrated problem areas
ES
Diagnosis, strategic planning, internal control planning, maintenance strategies, narrow domain
EIS
Support to top management, decision, environmental scanning
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Attributes of ComputerComputer-based Support Systems
Attributes of ComputerComputer-based Support Systems
(Turban and Aronson, 2001)
(Turban and Aronson, 2001)
Dimension Focus
Dimension Decision Capabilities
TPS
Data transactions
TPS
No decision, or simple decision models
MIS
Information
MIS
Structured routine problems using conventional operations research tools
DSS
Decisions, flexibility, user-friendliness
DSS
Semi-structured problems, integrated operations research models, bled of judgment and structured support capabilities
ES
Inferencing, transfer of expertise
EIS
Tracking, control “drill down”
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Attributes of ComputerComputer-based Support Systems (Turban and Aronson, 2001)
Sub-managerial, low management
MIS
Middle management
DSS
Top management
ES
Top management and specialists
EIS
Senior executives
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The system makes complex decisions, unstructured; use of rules (heuristics)
EIS
None
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More BIS technologies
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IMS3001 – BUSINESS INTELLIGENCE SYSTEMS – SEM 1 , 2004
Summary
Summary
! Vendors define BI according to what their products can do for the business enterprise ! Limited in scope; mostly refers to data analysis, querying and reporting ! Non-vendors refer to BI as a process, an organisational function, and a product ! Process – of converting data into actionable information – from unstructured data to keen insight and understanding of interrelationships of presented facts ! Organisational function – strategic management function that affects the entire or major part of organisation ! Product – processed information for the purpose of supporting business decision making
! BIS is an information system that provides BI to business decision makers ! BIS evolved from the concept of Computer-based Support Systems decision support technologies ! New BIS terminologies – data warehousing, OLAP, KMS
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! 1990s Data warehouses ! Enable decision makers to “pull” BI from a large centralised repository ! created to support the information requirements of an organisation’s decision makers. ! 1990s OLAP (On-Line Analytical Processing) systems ! Enable decision makers to build and work with analytical models easily and view the output in multiple dimensions ! 1990s Knowledge Management Systems (KMS) ! Go beyond relationships found in information allowing decision makers to extract patterns, trends, correlations that underlie the interworkings of a company currently and over time
Dimension Highest Organisation Level served TPS
ES
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References ! Vitt, E., Luckevich, M. and Misner, S. (2002) Business Intelligence, Microsoft Corporation. ! Greene, R. (1966) Business Intelligence and espionage. Dow-Jones Irwin, Homewood, Ill. ! Lintaud, B. (2000) e-Business Intelligence: Turning Information into Knowledge into Profit, McGraw Hill, New York. ! Thierauf, R. (2001) Effective business intelligence systems, Quorum Books. ! Turban, E. and Aronson, J. (2001) Decision Support and Intelligent Systems, 6th Ed, Prentice Hall.
IMS3001 – BUSINESS INTELLIGENCE SYSTEMS – SEM 1 , 2004
Questions?
[email protected] School of Information Management and Systems, Monash University T1.28, T Block, Caulfield Campus 9903 2735
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