Information Technology for Managers

1. Information Technology for Managers Chapter 9 Business Intelligence

2. Objectives • What is business intelligence and how can it be used to improve the operations and results of an organization? • What are some of the basic business intelligence tools and how are they used? Information Technology for Managers

3. What is Business Intelligence? • Business intelligence (BI) • Range of applications, practices, and technologies for the extraction, translation, integration, analysis, and presentation of data to support improved decision making • Make and act on predictions about future conditions • Data comes from operational information captured by a company’s ERP systems Information Technology for Managers

4. What is Business Intelligence? (continued) • Organizations must be extremely careful to protect the data they use in their BI applications • Most widely used BI software • SAP, IBM, Oracle, and Microsoft Information Technology for Managers

5. Data Warehouse/Data Marts • Data warehouse • Database that stores large amounts of historical data in a form that readily supports analysis and management decision making • Holds a huge amount of data • Data typically comes from numerous operational systems and external data sources Information Technology for Managers

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7. Data Warehouse/Data Marts (continued) • Extract-transform-load (ETL) process • Used to pull data from disparate data sources to populate and maintain the data warehouse • Run as frequently as necessary • Data mart • Smaller version of a data warehouse • Sometimes designed from scratch as a complete, individual, miniature data warehouse Information Technology for Managers

8. Business Intelligence Tools • Spreadsheets • Perform operations on the data based on formulas created by the end user • Create useful reports and graphs based on that data • “What if” analysis • Reporting and Querying Tools • Present data in an easy to understand fashion • Enable end users to make their own data requests and format the results without the need for additional help from the IT organization Information Technology for Managers

9. Online Analytical Processing (OLAP) • Method to analyze multidimensional data from many different perspectives • Enables users to identify issues and opportunities as well as perform trend analysis • Data cubes • Contain numeric facts called measures • Categorized by dimensions such as time and geography Information Technology for Managers

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11. Online Analytical Processing (OLAP) (continued) • Pre-aggregation of detailed data into useful summaries • Key to the quick responsiveness of OLAP • If data within a data cube has been summarized at a given level: • Not possible to use that data cube to answer questions at a more detailed level • Not restricted to just three dimensions Information Technology for Managers

12. Drill-Down Analysis • Powerful tool • Gain insight into the details of business data to better understand why something happened • Interactive examination of high-level summary data in increasing detail • To gain insight into certain elements Information Technology for Managers

13. Data Mining • BI tool • Used to explore large amounts of data for hidden patterns • Predicts future trends and behaviors for use in decision making • Enables organizations to make predictions about what will happen • Techniques • Association analysis • Neural computing • Case-based reasoning Information Technology for Managers

14. Data Mining (continued) • Process • Data repository creation • Pattern recognition • Deployment Information Technology for Managers

15. Reality Mining • Study of human interaction • Based on data gathered from mobile phones and other portable communicating devices • Applications • Improve computational models of how communicable diseases spread • Changes in the user’s speech pattern that could be an early indicator of a health problem • Tell what roles people play in groups Information Technology for Managers

16. Business Performance Management • Business performance management (BPM) • Application of BI • Enables the continuous and real-time analysis of operational data to measure actual performance and forecast future performance • Creates improved feedback loops for the critical processes of the organization • Can be used to model work processes and predict future performance under various what-if scenarios Information Technology for Managers

17. Balanced Scorecard • Performance management tool • Used to: • Track performance over time • Communicate and drive organizational strategy • Identify strategic initiatives • Conduct periodic performance reviews to assess if goals are being met • Translate an organization’s vision and strategy into implementation activities working from: • Financial, customer, business process, and learning and growth perspectives Information Technology for Managers

18. Balanced Scorecard (continued) • Define and monitor • Objectives, measures, targets, and initiatives • Key performance indicators (KPIs) • Direction, measure, target, and time frame • Benefits of effective use of a Balanced Scorecard • Greater customer satisfaction • Improved financial results • More effective information systems and business processes • Motivated and better educated employees Information Technology for Managers

19. Balanced Scorecard (continued) • Financial measures tend to be lag measures • Difficult to influence directly without addressing issues in the other three perspectives • Customer, business, and learning and growth measures • Considered leading indicators of future financial results Information Technology for Managers

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21. Dashboards • Digital dashboards • Present a set of key performance indicators about the state of a process at a specific point in time • Options for displaying results in a dashboard • Maps • Gauges • Bar charts • Trend lines • Scatter diagrams Guide to Microsoft Virtual PC 2005 and Virtual Server 2007

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24. BPM Software • Process efficiency monitoring BPM software • Provide built-in application programming interfaces • Connect with each of the systems that a company uses to support a particular process • Monitor the process to identify bottlenecks and inefficiencies • Workflow designer BPM software • Design a business process complete with all of the associated forms, business rules, role definitions, and integration to other systems involved in the process Information Technology for Managers

25. BPM Software (continued) • Reporting and insight BPM software • Gather data from a business process • Provide reports and dashboards to create actionable information Information Technology for Managers

26. Employing the BPM Process • Plan-Do-Check-Act problem solving process • Plan • Do • Check • Act Information Technology for Managers

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28. A Manager Takes Charge: Qwest Uses BPM Software to Improve Operations • Qwest Communications International, Inc. (Qwest) • Provider of voice, data, Internet, and video services • Qwest established a centralized BPM team • Evaluated several BPM software packages • Identified and evaluated possible changes in the processes • After implementation • Qwest quickly experienced measurable improvements Information Technology for Managers

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30. Summary • Business intelligence • Extraction, translation, integration, analysis, and presentation of data • Supports improved decision making • Extract-transform-load (ETL) process • Business performance management • Measures the actual performance or forecasts the future performance of critical operations • Balanced scorecard • Dashboard Information Technology for Managers