Introduction to Business
Intelligent Systems
Week 1
Dr. Jocelyn San Pedro
School of Information Management &
Systems
Monash University
IMS3001 – BUSINESS INTELLIGENCE SYSTEMS – SEM 1 , 2004
Staff- Dr. Jocelyn San Pedro
 T1.28 Level 1, Building T, Caulfield
Campus
 Jocelyn.sanpedro@sims.monash.edu.au
 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
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The Unit
 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.
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Synopsis
 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
IMS3001 – BUSINESS INTELLIGENCE SYSTEMS – SEM 1 , 2004
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Aim
 provide students with introductory
knowledge of concepts,
development and use of business
intelligence systems
IMS3001 – BUSINESS INTELLIGENCE SYSTEMS – SEM 1 , 2004
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Objectives
At the completion of this unit the students
will:
 have knowledge of:
 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
IMS3001 – BUSINESS INTELLIGENCE SYSTEMS – SEM 1 , 2004
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Objectives
 have an understanding of:
 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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Objectives
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
IMS3001 – BUSINESS INTELLIGENCE SYSTEMS – SEM 1 , 2004
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Assessment
Class Participation

in tutorials
Assignment

due Week 9, during tutorial
Exam,
Overall Assessment
Value 10%
Value 30%
Value 60%
100%
IMS3001 – BUSINESS INTELLIGENCE SYSTEMS – SEM 1 , 2004
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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?
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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
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What is
Business Intelligence?
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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
Information Technology Toolbox
www.ITToolbox.com
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What is Business Intelligence?
 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
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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
Cognos (www.cognos.com)
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What is Business Intelligence?
 markets business performance software,
comprised of three subcategories that includes
ad hoc query and analysis, reporting/OLAP,
executive information systems and
analytical applications
Brio (www.brio.com)
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What is Business Intelligence?
 a set of concepts and methods to improve
business decision making by using factbased support systems (e.g. briefing books
and executive information systems in the
1990s)
Gartner Group
www.gartner.com
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What is Business Intelligence?
 BI lets organisations access, analyse, and
share information internally with employees
and externally with customers, suppliers, and
partners
Business Objects
www.businessobjects.com
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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
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What is Business Intelligence?
 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?
According to non-vendors:
 BI is processed information of
interest to management about the
present and future environment in
which business is operating
Greene (1966)
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What is Business Intelligence?
 Processed information vs. data
 data - raw material that is composed of facts
 intelligence information - information digested,
analysed, and interpreted for the purpose of
decision making
 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)
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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 decisionmaking process
Greene (1966) (cont)
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What is Business Intelligence?
 BI results from full appraisal of
information, past actions, and options;
once sown, it tends to propagate itself
across an organisation
Liautuad and Hammond (2000)
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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
Thierauf (2001)
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What is Business Intelligence?
 Relationship of intelligence to various
levels of summarisation
 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)
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What is Business Intelligence?
 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
Thierauf (2001)
IMS3001 – BUSINESS INTELLIGENCE SYSTEMS – SEM 1 , 2004
(cont)
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For this UNIT – IMS3001
 We shall adopt the definition of BI by nonvendors – 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
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What is a
Business Intelligence
System?
IMS3001 – BUSINESS INTELLIGENCE SYSTEMS – SEM 1 , 2004
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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)
 BIS is an information system that turns
selected data, information, and/or knowledge
into desired intelligence for business gain
(Thierauf, 2001)
IMS3001 – BUSINESS INTELLIGENCE SYSTEMS – SEM 1 , 2004
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What is the role of
Business Intelligence
System?
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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)
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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
 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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How did Business
Intelligence Systems
evolve?
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Evolution of BIS
Computer-based Support Systems
technologies

1950s
1960s
1970s

1980s

1990s


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
35 )
IMS3001 – BUSINESS INTELLIGENCE SYSTEMS – SEM 1 , 2004
Attributes of Computer-based Support
Systems
(Turban and Aronson, 2001)
Dimensio Applications
TPS
Payroll, inventory, record keeping,
and sales information
MIS
Production control, sales forecasting,
monitoring
DSS
Long-range strategic planning, complex
integrated problem areas
ES
Diagnosis, strategic planning, internal
planning, maintenance strategies, narrow
domain
EIS
Support to top management, decision,
environmental scanning
IMS3001 – BUSINESS INTELLIGENCE SYSTEMS – SEM 1 , 2004
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Attributes of Computer-based Support
Systems
(Turban and Aronson, 2001)
Dimension Focus
TPS
Data transactions
MIS
Information
DSS
Decisions, flexibility, user-friendliness
ES
Inferencing, transfer of expertise
EIS
Tracking, control “drill down”
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Attributes of Computer-based Support
Systems
(Turban and Aronson, 2001)
Dimension Decision Capabilities
TPS
No decision, or simple decision models
MIS
Structured routine problems using
operations research tools
DSS
Semi-structured problems, integrated
research models, bled of judgment and
support capabilities
ES
The system makes complex decisions,
unstructured; use of rules (heuristics)
EIS
None
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Attributes of Computer-based Support
Systems
(Turban and Aronson, 2001)
Dimension Highest Organisation Level served
TPS
Sub-managerial, low management
MIS
Middle management
DSS
Top management
ES
Top management and specialists
EIS
Senior executives
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More BIS technologies
 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
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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
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Summary
 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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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.
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Questions?
Jocelyn.sanpedro@sims.monash.edu.au
School of Information Management and Systems,
Monash University
T1.28, T Block, Caulfield Campus
9903 2735
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