Uploaded by Jyoti Das

New normal in BI-v1

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The New Normal
in Business Intelligence
The new normal in business intelligence
• The new normal in business intelligence is about
the transformational changes that is taking place in
the digital world and definitely change in the
nature of business intelligence.
The
New Normal
in BI
• The Internet is the societal operating
system of the 21st century and its underlying
infrastructure – the cloud computing model –
represents a disruptive change.
• A networked infrastructure, big data from
disparate sources and social media, the selfservice model, and collaboration are changing the
way BI systems are deployed and used.
2
In today’s market place change is constant
•
Products are increasingly commoditised,
development cycles have shortened and
expectations of consumers are rising. To
achieve a sustainable competitive position,
companies must react in an agile way to
changing market conditions.
•
The current business environment evolves
around a transition towards globalization
and a restructuration of the economic
order. The pace of technological changes
that allow instant connectivity and the
current era of ubiquitous computing that
resulted from it, represent the new
normal in business intelligence.
3
As an industry business intelligence has to adapt to
environmental changes
•
The evolution of the Internet as a new societal
operating system, reshapes the future of
business intelligence.
•
The Internet evolves as a platform for the use of
interoperable resources (storage, computing,
applications and services) and drives the
development of information intensive services in
the 21st century. Increasingly, the cloud becomes
the vehicle for the Internet of Services.
•
The business ecosystem generates a huge amount of
data in terms of volume, variety and velocity, and
requires businesses to take on a data-driven
approach to differentiate. It’s about gaining
actionable insights faster than the competition by
reducing the data-to-decision gap.
•
This highlights the integration of structured and
unstructured data especially, social media content
to derive actionable insights from big data and the
leverage of predictive analytics for agile decisionmaking.
4
Gradually BI will be more than an IT function, it will be
about people and their business decisions
•
The exponential growth of data and the increased
reliance on insights derived from data for decisionmaking, causes a shift in the focus of business
intelligence.
•
Therefore, the emphasis of next-generation BI will be
on designing solutions that focus on answering
business questions of the end user. In the field of BI
the finished product is not a dashboard displaying
metrics but actionable intelligence answering the
business question at hand. Users will want seamless
access to information to support decision-making in
their day-to- day activities.
•
The future direction of BI will thereby be shaped by
the new age of computing. In both their personal and
professional lives, Web-savvy users have adopted the
principles of interactive computing and have come to
demand customizable BI-tools with high
responsiveness. .
5
Gradually BI will be more than an IT function, it will be
about people and their business decisions
•
Business intelligence, and the insights it delivers,
evolves towards an enterprise service that
follows the lines of a self-service model with
business users producing their own reports in an
interactive way and performing analytics on
demand.
•
Furthermore, Web 2.0 and social networks
function as catalysts for highly intuitive user
interfaces and the collaborative features of
computing allow users to share insights, which
transforms BI from a solitary to a collaborative
activity.
•
Companies are exploring the connection
between analytical activity and knowledge
sharing. Combined with collaborative
technologies that crowdsource intelligence from
various partners of the extended enterprise,
this approach provides the context for better and
faster decision-making.
6
The factors that constitute the new normal in BI can be
summarised as follows :
The Future Internet
Prescriptive Analytics
Social Media Analytics
Big Data
The
New Normal
in BI
Collaborative BI
Cloud Computing
Embedded BI
User Empowerment / Self-Service BI
7
1
The Future Internet
•
The main objective of enterprise computing is to be adaptive to change.
•
The new generation of enterprise computing must enable pervasive BI
deployments :
–
W eb-based
technologies
enable
the implementation
of userconfigurable BI
applications
connecting to a
wide arrangement
of data
BI-applications
are delivered as a
service on the
W eb or hosted in
the cloud
–
INTERNETENABLED ITINFRASTRUCTURE
•
spreading BI to more users and more devices :
•
consumerization of IT : enterprise computing aligns with consumer-class
technologies ;
•
BI-tools are more and more organized around the user’s experience to
interactively discover hidden relationships, trends and patterns and to create
new information and relate it with external data sources ;
using multiple data sources : the use of structured as well as semi- and
unstructured data sources (e.g. social media content) extends the playing
field of BI.
The new generation of enterprise computing needs to be developed
within the perspective of the future Internet :
–
the Internet as data source :
•
–
BI applications no longer limit their analysis to data inside the company and
increasingly source their data from the Internet to provide richer insights into
the dynamics of today’sbusiness ;
the Internet as software platform :
• BI applications are moving from company-internal systems to
service-based platforms on the Internet.
8
Drivers of networked infrastructure
Workforce
Demographic Shifts
Globalization
Cloud Computing
Bandwidth
& Connectivity
9
The Future Internet
•
Business
Networks
The
Future
Internet
•
Business
Networks
The
Future
Internet
The Internet of the future gives rise to a new business model that
allows enterprises to form business networks :
–
in the knowledge economy economic activity is based on highly
networked interactions ;
–
the amount of digital collaboration is increasing among people, things
and their interactions (through the Internet of People and theInternet
of Things, networking is expanding not only in person-to-person
interactions, but also in person-to-machine and machine-to-machine
interactions).
Business networks take on a data-driven approach to differentiate
and apply fact- based decision-making enabled by advanced
analytics:
–
economic interactions are based on the principle of scarcity and in the
knowledge economy the concept of scarcity applies to information ;
–
information in itself does not createcompetitive advantage (access to
lots of information has already become ubiquitous) ; competitive
advantage is defined as access to information, the decisions based on
that information and the actions taken on these decisions ;
–
business networks manage data in real-time, support anywhere, anytime
and any device connectivity and provide the appropriate information to
users across and beyond the enterprise (business users, partners,
suppliers, customers).
10
The Future Internet
Business
Networks
The
Future
Internet
•
The Internet serves as a platform for a service-oriented approach
that changes the way of enterprise computing. With BIapplications moving to the web, the Internet emerges as a global
SOA that is referred to as an Internet of Services. The IoS serves as
the basis for business networks.
•
The new BI requires technologies that integrate multiple data
sources, address business needs in a dynamic way and have a short
time to deployment.
•
Contrary to large scale application development of traditional BI, the
new BI moves towards smaller and flexible applications that can
adopt quickly and are supported by a service-oriented architecture.
•
Internet of Services and BI
•
•
•
People – User empowerment / Self-service
Users expect to have access to business information in the same way as
they use the Internet and search the Web. Self-service BI is the
implementation of this service- orientation at the end-user level.
Process – Embedded BI
BI moves into the context of business processes and transforms from a
reactive to a proactive decision- making tool by monitoring performance
and the prediction of future events. This change in the use and delivery
of software is guided by the adoption of a service-oriented approach.
Technology – Cloud Computing
Cloud computing emerges as a new deployment model of BI by the
adoption of a service-oriented architecture and drives a transformation
in application architectures through using “the Web as a platform” for
interoperable applications and services.
11
2
Big Data
BIG
DATA
Data that is TOO LARGE & TOO
COMPLEX for conventional data tools
The 4V’s of Big Data
VARIETY
VERACITY
VELOCITY
Data generated in
one flight from NY
to London:
7 Billion
10 Terabytes
Number of tweets
per day on Twitter:
Number of ‘Likes’
each minute on
Facebook:
500 Million
to capture, store and analyze.
VOLUME
Shares traded on US
Stock Markets each
day:
VALUE
90
%
4 Million
OF THE WORLD’S
DATA WAS
GENERATED IN THE
LAST TWO YEARS
12
The evolution of internet and the proliferation of data
Data 3V
Major source of big data
The
Internet
The
Web
The
Cloud
Semantic Web
Social Web
Static Web
Desktop/PC era
Internet of
People
producer
generated content
user generated
content.
Internet of People
and Things
system
generated
content
13
time
Heterogenous datasets are no longer manageable by a
traditional relational database approach
•
As connectivity reaches more and more devices, the volume, variety and velocity of data from clickstreams,
social networks and the Internet of Things (through which the physical world itself becomes an information
system) creates a new economy of data.
•
Velocity
Variety
Analytics
Volume
•
Database Technology
Services
Traditionally, BI applications allow users
to acquire knowledge from companyinternal data through various
technologies (data warehousing, OLAP,
data mining). However, the typical
pattern of cleaning and normalizing
proprietary information through an ETL
process into a data warehouse is
challenged by the transition to big data
that is marked by greater accessibility,
interoperability and 3rd party leverage of
online data.
For businesses to become responsive to market conditions, it is necessary to look at the whole ecosystem by
connecting internal business data with external information systems. BI- applications must access data from
disparate sources inside and outside the firewall, consider qualitative and quantitative data and include
structured as well as semi-structured and unstructured data.
14
Traditional RDBMS and SQL-based access languages are unfit
to the new world of unstructured information types
•
Data from the Web is feeding BI applications :
–
–
•
BI applications move to the Web :
–
–
•
BI applications no longer limit their analysis to data
inside the company, but also source data from the
outside, especially data from the Web. The Web is a
data repository.
An important challenge is the extraction, integration
and analysis from hererogeneous data sources.
BI applications are increasingly accessible over the Web
: BI is consumed as a service from thecloud.
The challenge here is the development of Web-based
applications that access and analyze bothhistorical
enterprise data and real-time data, especially from the
world wide market and making the information
available on a variety of devices.
Requirements for next-generation BI-tools include:
–
–
–
–
connect directly to the underlying data sources to
capture distributed data ;
schema-free : relationships between data are
discovered dynamically;
anytime, anywhere access with multiple devices ;
real-time visibility of what is happening now is
needed and analytics must be used in the
stream of business operations.
15
BI has evolved from historical reporting to the pervasive
analysis of real-time data from multiple data sources
•
Transactional data is analyzed in combination with new
data types from social, machine to machine and mobile
sources e.g. sentiment, RFID, geolocation data.
•
Organizations that embrace a « socialization of data »approach by incorporating and converging disparate data
sources into their BI-platforms, acquire a holistic view that
provides them with the opportunity to derive actionable
insights, e.g.
–
–
–
•
analytics of real-time customer sentiment and behaviour yield
indicators of product or service issues;
geospacial information of customers can be combined with
transactional data to make targeted product or service
offerings ;
combining internally generated data with publicly available
information can reveal previously unknown correlations.
In its focus on the user experience, BI embraces Web 2.0technology that focusses on intuitive user interfaces.
Organizations must master visualization tools that let
business users interactively manipulate data to find
tailored insights that can be shared with other
stakeholders (customers, partners, suppliers).
16
Mashups, that is, combining data from different sources into
an integrated application will be the order of the day
Web services are an important tool for
data integration from multiple sources
and provide access to real-time
information that can be fed into
operational applications.
Open access makes BI-functionality
accessible across and beyond the
enterprise.
Web services are user-centric because
information is provided in the context
of day-to-day activities.
17
Cloud computing
# apps / # users
3



networking

office automation

data warehousing

eCommerce

service-oriented
architecture

Web 2

virtualized connected
environment

Internet-based data
access & exchange

« as a service »paradigm
desktop computing
centralized
automation
1970s
1980s
1990s
2000s
2010 & beyond
“Cloud computing is enabling the consumption of IT as a service. Couple this
with the “big data” phenomenon, and organizations increasingly will be
motivated to consume IT as an external service versus internal infrastructure
investments”.
The Digital Universe Study : Extracting Value from Chaos, IDC,
18
Cloud computing is the backbone for the Internet of Services and
provides resources for on demand, networked access to services
ER
P
Infrastructure as a service
Platform as a service
Software as a service
Data as a service
Analytics as a service
•
Cloud computing alters the way computing,
storage and networking resources are allocated.
Through virtualization, the traditional servercentric architecture model in which applications
are tied to the underlying hardware is altered to a
service-centered cloud architecture.
•
Applications are decoupled from the physical
resource which implies that services -computing
resources, e.g. processing power, memory,
storage, network bandwidth in a cloud computing
environment are dynamically allocated to on
demand requests.
•
In addition to a better utlization of IT resources,
hardware cost reduction and greener computing,
cloud computing provides an agile infrastructure
to respond to business needs in a flexible way.
19
Cloud computing leading to commoditization of analytics
The trend towards the hosting of services, leads to the commoditization of analytics.
As a result, the creation of a competitive advantage depends on 2 factors.
The management of large
data volumes (data integration,
data quality). As data fuels
analytic processes, big data
becomes increasingly important.
Analytics in itself don’t
guarantee a competitive
advantage. The insights,
communications and decisions
that follow analysis become
more important. This stresses the
role of self-service and
collaboration.
20
Cloud computing provides an agile infrastructure to respond
to business needs in a flexible way
Cloud
computing
and big
data
In the pre-cloud world, the
implementation of data
warehouses needed serious
upfront costs and designing
database schemas was time
consuming. Moreover, database
schemas have their limitations
because some data types (e.g.
unstructured) don’t fit the
schema. Combined with the need
to manage big data volumes new
database technologies (e.g.
NoSQL) are used. For example, in
the case of a Hadoop cluster that
runs in parallel on smaller data
sets, multiple servers are needed.
Making use of cloud computing
services in a pay-for-use formula
is appealing. Furthermore, a
service-oriented cloud
architecture is ideally suited to
integrate data from various
sources (e.g. « mash up »
enterprise data with public
data).
Cloud
computing
and selfservice BI
Cloud computing gives a new
meaning to the consumerization of
IT. The convergence of cloud
computing and connectivity is
changing the way technology is
delivered and information is
consumed. Cloud applications are
available on demand and
developed to meet the immediate
needs of users. Cloud computing is
an important catalyst for selfservice BI. Users do not need to be
concerned with the technical
details of software and hardware
when using services. User-friendly
interfaces and visualization
capabilities make the generation,
sharing and acting on information
in real-time easier. This permits
faster and better decision-making
as well as greater collaboration
internally and outside the firewall.
21
4
Embedded BI
The Need for Agile BI
As the market changes faster and faster, BI has to adopt to support decisions inday-to-day
operations. The role of BI has changed beyond its original purpose of supporting ad hoc
queries and analysis of historical information. With changing market dynamics there is a
growing need to monitor performance using the latest data available and topredict
future events.
Process Orientation
The new BI delivers information to users within the context of operational activities.
Rather than reporting on the business, BI moves into the context of business processes.
Data is analyzed in the flow of transactions to produce real-time metrics, alerts,
recommendations and predictions for action. BI transforms from a reactive to a
proactive decision-making tool.
EMBEDDED BI
Operational BI is related to the subject of real-time processing. Through the Internet
of people (e.g. social media) and the Internet of Things (e.g. RFID and other sensored
data), information becomes available that helps enterprises to improve business
processes.
22
BI will take the new direction of adding features normally
associated with BI software to existing applications
from
monolithic applications
to
service-oriented architecture
23
Next-generation business applications will have the computing power to
proactively generate information that supports operational decisions
PROCESS
PEOPLE
Next-generation applications are
not static but interactive,
allowing users to couple the right
actions based on the insights that
are delivered.
Self-directed analytics give users the
ability to navigate through and
visualize business data, allowing
them to generate views and reports
relevant to their job function.
Business
Analytics
For example :
- analytics on browser-based BI
applications allow the mobile
workforce to take actions ;
- in an inventory application, proactive
decision-making is supported through
real-time information about which
items are running low in inventory.
TECHNOLOGY
New approaches such as in-memory processing, in-database analytics, CEP,
etc. contribute to the broader adoption of BI.
24
The consumerization of IT and the need of business decisions to be made on relevant
information are drivers for placing reporting and analytics in the hands of more decisionmakers and to apply analytics in real-time to production data.
1
3
2
1
2
3
•
changes in the function of
applications : from dedicated
applications to composite
applications
changes in the way data is
accessed : from data as an isolated
resource to data as a service
A broader user adoption of BI results from :
–
–
–
–
•
changes in the nature of BI : from
stand-alone applications to
embedded applications
faster and easier executive access to information ;
self-service access to data sources ;
right-time data for users’ roles in operations ;
more frequently updated information for all users.
The business benefits are :
–
–
–
–
improved customer sales, service and support ;
more efficiency and coordination in operations and business
processes ;
faster deployment of analytical applications and services ;
customer self-service benefits.
25
5
User-empowerment / Self-service
The New BI
Traditional BI
client server, closed,
proprietary
architecture
structured data (data gathering
depends on data warehousing
methodology)
data
analytics and presentation
are separated ; data-centric
analytics
create data models, control
of data and applications
focused on standard reports ;
predefinied reports to answer
predefined questions
on premise, desktop and
server
IT role
BI-delivery
deployment type
deliver relevant data, ensure
security and scalability, enable
self-service
focused on interactive analysis
by end-users ; used to derive new
insights (“business discovery”)
on premise and on demand
(cloud, SaaS)
26
A confluence of factors* is driving a trend called the
consumerization of IT
technological innovations are userdriven and increasingly
outside central IT-control
•
Enterprise application development is driven
by the need for interactive access to disparate
data, self-service capabilities that offer a
flexibility for personalization and end-user
customization. BI shifts towards the selfservice delivery model that accomodates
knowledge workers to search, access and
analyze data from a variety of sources and
available on a range of devices.
•
Empowerment of users is an important
trend in BI. Business users generate their
own reports and analysis and are no
longer dependent on IT to deliver them.
The ownership of BI shifts from IT to the
business.
•
By incorporating collaborative features, BI
environments are getting social. These
enhancements facilitate the creation of
user-generated content that can be shared
with stakeholders across and beyond
corporate boundaries, enabling the
networked enterprise and optimized
decision-making.
self-directed analytics
business discovery
long tail solutions
reusability
Consumerization of IT
Traditional IT
Infrastructure
data governance
security
* including ubiquitous broadband, a growing technology-native workforce, the
adoption of social networking tools, mobile apps, etc.
27
Drivers of the consumerization of IT
User-generated content
BI as a service
The cloud as a delivery
mechanism for self-service BI.
CoIT
Crowdsourcing.
Architecture of participation.
UBIQUITOUS CONNECTIVITY
Power shift from expert-generated to
user-generated content. Because
markets are more volatile, businesses
seek greater agility to respond faster
to market requirements. The
democratizaton of BI is driven bottomup and top-down. Users want
customized tools, while the ability to
mine data is critical for business
competitiveness, which causes
informed decision-making to be
extended across more roles.
Big data.
The googlization of BI.
Data and desktop
virtualization
Accessing data and applications
from any location, on any
device, at any time.
61
The BI-landscape will be reshaped by the model of the
consumer web
intuitive user
interfaces, easy to use,
work from browser,
real-time,
zero wait,
app-driven,
multiple devices
user-driven analysis,
open standards,
loosely coupled services
culture of sharing
and collaboration
29
The road forward …. self-service, fact-based decisions, agile BI
Business users are empowered to
gain insights into data (through
exploration, visualization)
Collaboration is more than
distributing and sharing of
documents ; it implies bringing
context to analytics : different
people track the relevancy of
analytics and the decisions that
will be based on it
The result is faster
and better decision-making
Value created from data can be
shared internally within the
company and externally with
customers and partners
in memory data
management
interactive data
visualization
Web-based
delivery
30
6
Collaborative BI
Collaborative is the merging of
business intelligence software
with collaboration tools,
including social and Web 2.0
technologies, to support
improved data-driven decision
making.
•
The idea of collaborative BI is to extend the processes of
data organization, analysis and decision-making beyond
company borders.
•
While Web 2.0-technologies are migrating into the
enterprise, consumer-oriented social media tools do not
provide the necessary components for collaborative BI.
Collaborative BI requires the principle of information
sharing to be incorporated into day-to-day workflows.
•
A difference also exists between analyzing social media
on the one hand and collaborative BI on the other hand.
Social media provide a new source of data that
complements traditional data analysis to help
organizations capture market trends, better understand
customer attitudes and behaviour and uncover product
sentiments.
•
Collaborative BI uses web-based standards to connect
people (enterprise users, partners, suppliers,
customers) to build dynamic networks that share
information and analysis results to enable timely 31
decisions that drive actions.
Why organizations adopt collaborative BI
•
Big data involves the analysis of ever-increasing
volumes of structured and semi- or unstructured
data. In the context of always changing business
requirements, organizations need to act quickly
and decisively on business and consumer trends
derived from petabytes of data.
•
Closely related to the expectations of users to
access applications anaywhere, at any time on any
device are self- service features that allow them to
interact with data in a flexible way. Accordingly,
technologies as advanced data visualization,
embedded BI and in-memory analysis rank high in
preference lists.
Collaborative BI correlates with the analysis of big data and self-service BI
32
The business value for collaborative BI can be situated
from the eight core patterns of Web 2.0.
33
The pervasive use of BI simulated through these
technologies is a necessity to enable analytic agility
Web 2.0-features focus on the user experience. The customer-centric focus of
Web 2.0 has created a demand for applications that move from the traditional
transaction platform to a model that is more accessible and personal for the
user.
Web 2.0-applications represent an opportunity for BI to build Web-based
collaboration. Reports can be published in blogs and wikis, which help construct a
knowledge base to share interpretations. Users will learn to use information
more dynamically which allows the generation of « crowd-sourced wisdom ».
Besides reporting and analysis, decisions are part of the BI delivery mechanism.
Gaining insights from data to drive better decisions is no longer constrained by the
limits of internal data. The open access to information in the Web 2.0-space allows
users to combine existing information with consumer- generated content from the
social networking spectrum like blogs and wikis.
Social media analytics presents a unique opportunity to threat the market as a «
conversation » between consumers and businesses. Companies that harness the
knowledge of social networks compile enterprise data with streams of real-time data
from Web 2.0-sources to better access marketplace trends and customer needs. The
adoption of Web 2.0-technologies and applications can help businesses to expand the
reach of BI and improve its effectiveness.
« The world is rapidly turning into a network society. … The need to quickly adapt to this changing environment is
evident. The new paradigm in innovation is joining forces in an online environment and activily working together.
If we collaborate, we can co-create and grow our ideas together, which ultimately leads to better, faster and
higher value Innovation ».
34
7
Social media analytics
Social media analytics is the practice of
gathering data from social media
websites and analyzing that data using
social media analytics tools to make
business decisions. The most common
use of social media analytics is to mine
customer sentiments to support
marketing and customer service
activities.
•
An important BI trend is the incorporation of
the growing streams of data generated by
social media networks in BI applications.
•
Social BI is a type of intelligence that focuses on
data that is generated in real-time through
Internet-powered connections between
businesses and the public.
•
Social media analytics give companies insights
into the mindset of their (prospective)
customers, help them improve media campaigns
and offerings and accelerate responses to shifts
in the marketplace.
35
Drivers for social media analytics
The objective of social media analytics is to analyze social media data
in context and generate unique customer experiences across channels.
36
The spectrum of available data has been enlarged with
new soures, esp. social media data streams.
37
The explosion of social media drives the need to analyze
and get insights from customer conversations.
38
The mobile and social media explosion empowers customers
and the customer experience takes on a new meaning
interaction
data
descriptive
data
attitudinal
data
behavioral
data
39
Examples of the use of social media analytics in day-to-day
operations
•
Baynote (www.baynote.com) provides
recommendation services for websites.
Websites using Baynote recommendations
deliver relevant products and personalized
content that create an intuitive user
experience.
•
Baynote applies « interest mining ». It
attempts to cluster consumers to provide
product or content recommendations that
are based on a broader understanding of
consumer behaviour. Baynote goes beyond
the clickstream by examining the words
associated with the clicks the user makes.
Combining the clickstream and the semantic
stream reveals the communality of cluster
members above a pure statistical or
demographic cluster approach. The resulting
« integrest graph » is used to personalize
product and content recommendations that
lead to maximum engagement, conversion
and lifetime value.
•
Wise Window (www.wisewindow.com) distills
social media content automatically and in realtime into industry-specific taxonomies. The
approach that Wise Window calls « Mass
Opinion Business Intelligence » (MOBI) does not
focus on individual behavior but the type of
syndicated research that Wise Window
performs is aimed at giving a broader
understanding of consumer sentiments and
behavior in the market at large.
•
MOBI discovers leading indicators with data
derived from social media to make
organizations more agile and responsive.
Application fields include simple mindshare
analysis, discovering new products and niches,
spotting fast movers, performing constituent
analysis and predicting demand.
78
The
New Normal
in BI
8. Predictive Analytics
41
7
Advanced Analytics
Analysis
(Why did it happen ?)
Traditionally, BI systems provided a retrospective view of the
business by querying data warehouses containing historical data.
Contrary to this, contemporary BI-systems analyze real-time event
streams in memory.
Reporting
(What happened ?)
In today’s rapidly changing business environment, organizational
agility not only depends on operational monitoring of how the
business is performing but also on the prediction of future
outcomes which is critical for a sustainable competitive position.
HISTORY
Predictive analytics leverages actionable intelligence that can be
integrated in operational processes.
PRESENT
FUTURE
Prescriptive
Analytics
(How can we make it
happen!)
Monitoring
Predictive Analytics
(What is happening now ?)
(What might happen ?)
42
The goal of all organizations with access to large data collection will be
to harness the most relevant data and use it for better decision making
Prescriptive analytics
Advanced
analytics
To determine which decision and/or action will produce the most
effective result against a specific set of objectives and constraints
Predictive analytics
Leverage past data to understand why something happened or to predict what will
happen in the future across various scenarios
Business
intelligence
Descriptive analytics
Mine past data to report, visualize and understand what has already
happened – after the fact or in real time
Computational complexity
How Analytics Builds on Business Intelligence
“Analytics are a subset of … business intelligence: a set of technologies and processes that use data to
understand business performance … The questions that analytics can answer represent the higher-value
and more proactive end of this spectrum”
Analytics: The three levels
 Descriptive Analytics:
Classic BI
• Quantitative Assessment of
Past Business Results
• Statistics, Exploratory Data
Analysis, Visualization
• Key task: Data access /
shaping – Power Query does
this
• Excel + Power Pivot data
model holds Past Business
Results
• Pivot charts, Power View,
Power BI for data visualization
• Formulas: Sum, Count,
Average, Min, Max, Var,
StdDev
 Predictive Analytics
• Quantitative Methods to
Predict New Outcomes
• Forecasting, Prediction,
Classification, Association
• Key tasks: Data shaping,
applying predictive models
• Data mining algorithms “fit”
analytic model to past data
• Trained/fitted models are
applied to newly arriving data
Classify: ex. Good/Poor credit
risk, Likely/Unlikely to churn
Predict: ex. stock price,
Forecast a time series: ex. next
sales from past sales history
Associate: ex. People who
bought this item also bought...
• Tools: Azure ML, XLMiner,
Predixion, SAS, SPSS, R, others
 Prescriptive Analytics
• Quantitative Methods to
Make Better Decisions
• Decision Trees, Monte Carlo
Simulation, Optimization
Key task: Create a model – A person
must do this
• Model must capture essential
features of the business situation
• Larger models often get their
data from BI / Descriptive
Analytics
•A “What If” model is the starting
point – Excel is a natural tool!
Given an appropriate model,
•Ask “What are all the possible
outcomes?” – simulation/risk
analysis
•Ask “What’s the best outcome
we can achieve?” – optimization
•Tools: Solver, Risk Solver, @RISK,
Crystal Ball, IBM, SAS, others
Potential growth vs. commitment for analytics options
advanc ed analytics (e.g. mining, predictive)
data marts for analytics
advanc ed data visualization
commitment
predictive analytic s
analytic s processed
within EDW
enterprise data warehouse (EDW)
statistical analysis
OLAP tools
analytic database
outside the EDW
hand- coded SQL
data mining
sc oring
real- time reports or dashboards
accelerator (hardware or software based)
in- database analytic s
data warehouse appliance
text mining
in- memory database
DBMS for data warehousing
sandboxes for analytics
column oriented storage engine
visual disc overy
private cloud
closed- loop processing
MapReduce, Hadoop, Complex Event Processing
DBMS for transac tion processing
mixed workloads in a DW
extreme SQL
in- line analytics
public cloud
Software as a Servic e
-30
-15
0
15
30
45
potential growth
Graphic based on survey results reported in Big Data Analytics, Potential growth is an indicator for
the growth or decline of usage for big data analytics over the next three years. Commitment is a
cumulative measure representing the percentage of respondens (N= 325) who selected using
today and/or using in three years.
46
Current trends affecting predictive analytics :
47
Standards for data mining and model deployment : CRISP-DM
•
A systematic approach to guide the data mining process
has been developed by a consortium of vendor and users
of data mining, known as Cross Industry Standard for Data
Mining (CRISP-DM).
•
In the CRISP-DM model, data mining is described as an
interative process that is depicted in several phases
(business and data understanding, data preparation,
modeling, evaluation and deployment) and their
respective tasks. Leading vendors of analytical software
offer workbenches that make the CRISP-DM process
explicit.
48
Standards for data mining and model deployment : PMML
•
To deliver a measurable ROI, predictive analytics requires a focus on
decision optimization to achieve business objectives. A key element to
make predictive analytics pervasive is the integration with commercial lines
operations. Without disrupting these operations, business users should be
able to take advantage of the guidance of predictive models.
•
For example, in operational environments with frequent customer
interactions, high-speed scoring of real-time data is needed to refine
recommendations in agent-customer interactions that address specific goals,
e.g. improve retention offers. A model deployed for these goals acts as a
decision engine by routing the results of predictive analytics to users inthe
form of recommendations or action messages.
•
A major development for the integration of predictive models in business
applications is the PMML-standard (Predictive Model Markup Language) that
separates the results of data mining from the tools that are used for
knowledge discovery.
49
50
PMML represents an open standard for interoperabilityof
predictive models. Most development environments can
export models in PMML. As analytics increasingly drive
business decisions, open standards like PMML facilitate
the integration of predictive models into operational
systems. The deployment of predictive models in an
existing IT-infrastructure no longer depends on custom
code or the processing of a proprietary language.
Besides the flexible integration of predictive models into business
applications, continuous analysis is key to enable business process
optimization. The broad acceptance of the PMML-standard further
stimulates the exchange of predictive models. Open standards like
PMML contribute to the wider adoption of predictive analytics and
stimulate collaboration between stakeholders of a business
process. In a similar vein, the increased use of open-source
software can profit from PMML. Open-source environments can
visualize and further refine predictive models that were produced
in a different environment.
51
Structured and unstructured data types
•
The field of advanced analytics is moving towards providing a number of solutions for the
handling of big data. Characteristic for the new marketing data is its text-formatted
content in unstructured data sources which covers « the consumer’s sphere of influence » :
analytics must be able to capture and analyze consumer-initiated communication.
•
By analyzing growing streams of social media content and sifting through sentiment and
behavioral data that emanates from online communities, it is possible to acquire powerful
insights into consumer attitudes and behaviour. Social media content gives an instant view
of what is taking place in the ecosystem of the organization. Enterprises can leverage
insights from social media content to adapt marketing, sales and product strategies in an
agile way.
•
The convergence between social media feeds and analytics also goes beyond the aggregate
level. Social network analytics enhance the value of predictive modeling tools and
business processes will benefit from new inputs that are deployed. For example, the
accuracy and effectiveness of predictive churn analytics can be increased by adding social
network information that identifies influential users and the effects of their actions on
other group members.
52
Predictive
modeling
Advanced
visualization
multidimensional
view of data
Self-service
business discovery in
an interactive way
Data-as-a-service
making multiple
data sources
available for analysis
Social media
analytics
Text mining
Collaboration
analyze customer
sentiment
pattern detection in
unstructured data
adding context
to decision
making
Real-time
dashboards
monitor KPI’s
88
Advances in database technology : big data and predictive analytics
•
As companies gather larger volumes of data, the need for the execution of predictive models becomes more
prevalent.
•
A known practice is to build and test predictive models in a development environment that consists of
operational data and warehousing data. In many cases analysts work with a subset of data through sampling.
Once developed, a model is copied to a runtime environment where it can be deployed with PMML. A user of an
operational application can invoke a stored predictive model by including user defined functions in SQLstatements. This causes the RDBMS to mine the data iself without transferring the data into a separate file. The
criteria expressed in a predictive model can be used to score, segment, rank or classifyrecords.
•
An emerging practice to work with all data and directly deploy predictive models is in-database analytics. For
example, Zementis (www.zementis.com) and Greenplum (www.greenplum.com) have joined forces to score
huge amounts of data in-parallel. The Universal PMLL Plug-in developed by Zementis is an in-database scoring
engine that fully supports the PMML-standard to execute predictive models from commerial and open source
data mining tools within the database.
54
Data is partitioned across multiple
segment servers and each segment
manages a distinct portion of the
overall data.
The Universal PMML Plug-inenables
predictive analytics directly within
the Greenplum Database for highperformance scoring in a massively
parallel environment.
55
Predictive analytics in the cloud
•
While vendors implement predictive analytics capabilities into their databases, a similar development is taking
place in the cloud. This has an impact on how the cloud can assist businesses to manage business processes
more efficiently and effectively. Of particular importance is how cloud computing and SaaS provide an
infrastructure for the rapid development of predictive models in combination with open standards. The PMML
standard has yet received considerable adoption and combined with a service-oriented archirtecture for the
design of loosely coupled systems, the cloud computing/SaaS model offers a cost-effective way to implement
predictive models.
•
As an illustration of how predictive models can be hosted in the cloud, we refer to the ADAPA scoring engine
(Adaptive Decision and Predictive Analytics, www.zementis.com). ADAPA is an on demand predictive analytics
solution that combines open standarfds and deployment capabilities. The data infrastructure to launch ADAPA
in the cloud is provided by Amazon Web Services (www.amazonwebservices.com). Models developed with
PMML-compliant software tools (e.g. SAS, Knime, R, ..) can be easily uploaded in theADAPA environment.
56
Since models are developed outside the ADAPA environment, a first
step of model deployment consists of a verification step to ensure
that both the scoring engine and the model development environment
produce the same results. Once verified, models are executed either
in batch or in real-tile. Batch processing implies that records are run
against a loaded model. After processing, a file with the input and
predicted values is available for download. Real-time execution of
models in enterprise systems is performed throughWeb services
that are the base for interoperability. As new events occur, a request
is submitted to the ADAPA engine for processing and the results of
predictive modeling are available almost simultaneously.
57
•
The on-demand paradigm allows businesses to use sophisticated software applications over the Internet,
resulting in a faster time to production with a reduction of total cost of ownership.
•
Moving predictive analytics into the cloud also accelerates the trend towards self-service BI. The so-called
democratization of data implies that data access and analytics should be available across the enterprise. The
fact that data volumes are increasing as well as the need for insights from data, reinforce the trend for selfguided analysis. The focus on the latter also stems from the often long development backlogs that users
experience in the enterprise context. Contrary to this, cloud computing and Saas enable organizations to make
use of solutions that are tailored to specific business problems and complement existingsystems.
58
•
•
•
•
PMML represents a common standard for the representation of predictivemodels.
PMML eliminates the barriers between model development and modeldeployment.
Through PMML predictive models can be embedded directly in adatabase.
PMML-models can score data on a massive scale through parallel processing or in the cloud.
59
BI has evolved from performance reporting on historical data to the
pervasive use of real-time data from disparate sources.
To respond faster to market conditions, a much broader user base
needs data access to interactively explore and visualize information
sources and share insights to make faster and better
informed decisions.
In the era of big data, a Web-based platform enables business
discovery and data as well as analytics are consumed as services
in the cloud.
60
References
BOHRINGER, M., GLUCHOWSKI, P., KURZE, Chr. & SCHIEDER, Cgr., A business intelligence perspective on the future Internet,
AMCIS 2010 Proceedings, Paper 267.
COUTURIER, H., NEIDECKER-LUTZ, B., SCHMIDT, V.A. & WOODS, D., Understanding the future Internet, Evolved Technologist
Press, New York, 2011.
ECKERSON, W., BI delivery framework 2020, Beye NETWORK, march 2011.
GUAZZELLI, A., STATHATOS, K., ZELLER, M., Efficient deployment of predictive analytics through open standards and
Cloud computing, SIGKDD Explorations, 11, issue 1, pp. 32-38.
HINCHCLIFFE, D., Next-generation ecosystems and its key success factors, Dachis Group, 2011.
MICU, A.C., DEDEKER, K., LEWIS, I., MORAN, R., NETZER, O., PLUMMER, J. & RUBINSON, J., The shape of marketing research in
2021, Journal of Advertising Research, 51, march 2011, pp. 213-221.
RUSSOM, Ph., Big data analytics, TDWI Best Practices Report, Q4 2011.
SINGH KHALSA, R.H., REASON, A., BIERE, M., MEYERS, C., GREGGO, A & DEVINE, M., A convergence in application architectures
and new paradigms in computing. SOA, composite applications and cloud computing, IBM, january 2009.
SINGH KHALSA, R.H., REASON, A. & BIERE, M., The new era of collaborative business intelligence, IBM, march 2010.
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