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CHAPTER 10: Business Intelligence. 10.1 Managers and Decision Making 10.2 What Is Business Intelligence? 10.3 Business Intelligence Applications for Data.

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Presentation on theme: "CHAPTER 10: Business Intelligence. 10.1 Managers and Decision Making 10.2 What Is Business Intelligence? 10.3 Business Intelligence Applications for Data."— Presentation transcript:

1 CHAPTER 10: Business Intelligence

2 10.1 Managers and Decision Making 10.2 What Is Business Intelligence? 10.3 Business Intelligence Applications for Data Analysis 10.4 Business Intelligence Applications for Presenting Results 10.5 Business Intelligence in Action: Corporate Performance Management CHAPTER 10: BUSINESS INTELLIGENCE 2Copyright John Wiley & Sons Canada

3 LEARNING OBJECTIVES 1.Identify the phases in the decision-making process, and use a decision-support framework to demonstrate how technology supports managerial decision making. 2.Describe and provide examples of the three different ways in which organizations use business intelligence (BI). 3.Specify the BI applications available to users for data analysis, and provide examples of how each might be used to solve a business problem at your university. 3Copyright John Wiley & Sons Canada

4 LEARNING OBJECTIVES (CONTINUED) 4.Describe three BI applications that present the results of data analyses to users, and offer examples of how businesses and government agencies can use each of these technologies. 5.Describe corporate performance management, and provide an example of how your university could use CPM. 4Copyright John Wiley & Sons Canada

5 CASE 10.1 CHAPTER OPENING CASE QUALITY ASSURANCE AT DAIMLER AG The Problem –Dating back to the 1980s, German automaker Daimler AG housed warranty data on its Quality Information System (QUIS), a mainframe-based platform and the diagnostic and warranty data were located in different information silos. The organization was unable to take full advantage of the data and the diagnosis database had reached the limits of its capacity.Daimler AG Source: Alperium/Shutterstock 5Copyright John Wiley & Sons Canada

6 CASE 10.1 CHAPTER OPENING CASE QUALITY ASSURANCE AT DAIMLER AG The IT Solution –Over a three-year period, Daimler consolidated its data on a data warehouse, making these data available to users through a shared interface. The new system is called Advanced Quality Analysis (AQUA).The company intended AQUA to provide support for two strategic goals: (1) to increase customer satisfaction and (2) to reduce costs. 6Copyright John Wiley & Sons Canada

7 CASE 10.1 CHAPTER OPENING CASE QUALITY ASSURANCE AT DAIMLER AG The Results –AQUA has enabled Daimler to achieve deeper insights into how to optimize its production processes. Defects can be detected more quickly, resolved, and eliminated from future models. AQUA supports Daimler’s strategic goals of quality leadership, customer satisfaction, and profitability. 7Copyright John Wiley & Sons Canada

8 CASE 10.1 CHAPTER OPENING CASE QUALITY ASSURANCE AT DAIMLER AG What We Learned From This Case –BI enables decision makers to quickly ascertain the status of a business enterprise by examining key information –BI systems provide business intelligence that you can act on in a timely fashion. 8Copyright John Wiley & Sons Canada

9 10.1 Managers and Decision Making Management is a process by which an organization achieves its goals through the use of resources (people, money, materials, and information). 9Copyright John Wiley & Sons Canada

10 THE MANAGER’S JOB AND DECISION MAKING Managers have three basic roles (Mintzberg 1973) : –Interpersonal –Informational –Decisional 10Copyright John Wiley & Sons Canada

11 THE MANAGER’S JOB & DECISION MAKING (CONTINUED) Decisions and Decision making 11Copyright John Wiley & Sons Canada

12 FIGURE 10.1 DECISION MAKING PROCESS 12Copyright John Wiley & Sons Canada

13 WHY MANAGERS NEED IT SUPPORT The number of alternatives is constantly increasing. Most decisions must be made under time pressure. Decisions are becoming more complex. Decision makers, as well as the information, can be situated in different locations. 13Copyright John Wiley & Sons Canada

14 FIGURE 10.2 A FRAMEWORK FOR COMPUTERIZED DECISION ANALYSIS 14Copyright John Wiley & Sons Canada

15 PROBLEM STRUCTURE The first dimension deals with the problem structure, where the decision making processes fall along the continuum ranging from highly structured to highly unstructured decisions. Structured Semi-structured Unstructured Example: Inventory Control Example: Evaluating Employees Example: New Services 15Copyright John Wiley & Sons Canada

16 THE NATURE OF DECISIONS the second dimension of decision support deals with the nature of decisions. Three categories of managerial decision making: – Operational control – Management control – Strategic planning 16Copyright John Wiley & Sons Canada

17 10.2 WHAT IS BUSINESS INTELLIGENCE? Clicking on the links will take you to each company’s home page –SASSAS –IMBIMB –SAPSAP 17Copyright John Wiley & Sons Canada

18 THE SCOPE OF BUSINESS INTELLIGENCE Smaller Organizations –Excel spreadsheets Larger Organizations –Data mining, predictive analytics, dashboards and data visualization 18Copyright John Wiley & Sons Canada

19 THE SCOPE OF BI (CONTINUED) Three specific BI targets that represent different levels of change: –development of one or a few related BI applications (Example: campaign management in marketing) –development of infrastructure to support enterprise-wide BI (Example: enterprise data warehouse) –support for organizational transformation (Example: support for new business model) 19Copyright John Wiley & Sons Canada

20 10.3 BUSINESS INTELLIGENCE APPLICATIONS FOR DATA ANALYSIS Multidimensional Analysis or Online Analytical Processing (OLAP) Data Mining Decision Support Systems 20Copyright John Wiley & Sons Canada

21 MULTIDIMENSIONAL ANALYSIS OR ONLINE ANALYTICAL PROCESSING (OLAP) OLAP: – “slices & dices” data stored in a dimensional format, –drills down in the data to greater detail, and, –aggregates the data. 21Copyright John Wiley & Sons Canada

22 DATA MINING Data mining can perform two basic operations: –predicting trends and behaviours –identifying previously unknown patterns 22Copyright John Wiley & Sons Canada

23 10.1 IT’S ABOUT BUSINESS Data Analytics Helps Kelley Blue Book Remain Competitive –Since 1926, Kelley Blue Book has been a publishing company known for its guide to used and new car values. They needed to devise new strategies to generate revenue and compete with new on-line rivals. Kelley invested in a data warehouse and it purchased business intelligence and data analytics software from MicroStrategy and the SAS Institute in order to analyze its warehouse data more efficiently and effectively. The bottom line is that data analytics has enabled Kelley to provide more rapid and accurate quotes, develop new sources of revenue, and remain competitive with the on-line companies.Kelley Blue Book MicroStrategy SAS Institute 23Copyright John Wiley & Sons Canada

24 DECISION SUPPORT SYSTEMS (DSSS) DSS capabilities –Sensitivity analysis –What-if analysis –Goal-seeking analysis 24Copyright John Wiley & Sons Canada

25 10.4 BUSINESS INTELLIGENCE APPLICATIONS FOR PRESENTING RESULTS Capabilities of Dashboards:Dashboards –Drill-down –Critical success factors (CSFs) –Key performance indicators (KPIs) –Status access –Trend analysis –Exception reporting 25Copyright John Wiley & Sons Canada

26 FIGURE 10.3 SAMPLE PERFORMANCE DASHBOARD 26Copyright John Wiley & Sons Canada

27 FIGURE 10.4 BLOOMBERG TERMINAL Source: Carlos Osario/Zuma Press 27Copyright John Wiley & Sons Canada

28 FIGURE 10.5 HUMAN RESOURCES DASHBOARD/SCORECARD Source: MicroStrategy. 28Copyright John Wiley & Sons Canada

29 FIGURE 10.6 MANAGEMENT COCKPIT 29Copyright John Wiley & Sons Canada

30 DATA VISUALIZATION TECHNOLOGIES Geographic Information Systems is a computer-based system for capturing, integrating, manipulating, and displaying data using digitized mapsGeographic Information Systems Reality Mining allows analysts to extract information from the usage patterns of mobile phones and other wireless devices. –Example: integration of GIS and GPS 30Copyright John Wiley & Sons Canada

31 FIGURE 10.7 REAL TIME BI 31Copyright John Wiley & Sons Canada

32 10.5 BUSINESS INTELLIGENCE IN ACTION: CORPORATE PERFORMANCE MANAGEMENT Click below to review corporate management performance solutions at 32Copyright John Wiley & Sons Canada

33 CHAPTER CLOSING 1.The three-step decision-making process includes: intelligence, design, and choice. 2.There are three major ways that organizations use BI: –development of one or a few related BI applications –development of infrastructure to support enterprise-wide BI –support for organizational transformation 33Copyright John Wiley & Sons Canada

34 CHAPTER CLOSING (CONTINUED) 3.BI applications available to analyze data include multidimensional analysis, data mining, and decision support systems. 4.Three BI applications that present the results of data analyses to users include dashboards, geographic information systems and reality mining 5.Corporate performance management (CPM) is involved with monitoring and managing an organization’s performance according to key performance indicators (KPIs) and operational costs. 34Copyright John Wiley & Sons Canada

35 Copyright Copyright © 2014 John Wiley & Sons Canada, Ltd. All rights reserved. Reproduction or translation of this work beyond that permitted by Access Copyright (the Canadian copyright licensing agency) is unlawful. Requests for further information should be addressed to the Permissions Department, John Wiley & Sons Canada, Ltd. The purchaser may make back-up copies for his or her own use only and not for distribution or resale. The author and the publisher assume no responsibility for errors, omissions, or damages caused by the use of these files or programs or from the use of the information contained herein. Copyright John Wiley & Sons Canada


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