Decision Support and Business Intelligence Systems Chapter 1: Decision Support Systems and Business Intelligence 1 Learning Objectives !"#$"%&'(")*+,-."/&012345601-748"-/$9&/:$'7-;<"=6$91(7% "->?/.@*)5 0A**?BC552D 61E7>@B"4)F(&F:5$8"7-#G./*E74H8/79I9(748"-I/61E*E&*/@J&K@BLK)5 ;<"=6$91(7%'("-K(5I9(748"-I/ (."/6.(0AJF"61EN.N$4L7."; 23&.@9',D5) !"#$"%&'(")*+,-#$"%K(7-."/;5CB;5?5L94)P(#7%=@$&K7/G&'("P8$4 !"."/ KC9;@5)* "-9("5."/*C9."/ !"#$"%&'(")*./7B."/ !"-"5'7-."/KC9;@5)* "-9("5."/*C9."/ &/245/H(#$"%#@9=QD5R"5'7-/EBB;5CB;5?5."/KC9;@5)* (decision support systems (DSS)) 7>@B"4+,-.//%$@>261E65$#$"%#@9'7-#$"%N1"9 "->?/.@* (business intelligence (BI)) 61E#$"%&.234$'(7-.CB DSS 2 7>@B"4+,-65$#$"%#@9'7-/EBB-"561E#$"%;C%=C5>G.CB."/;5CB;5?5."/ KC9;@5)* 6;9-&#/Q37-%Q7 23;!"#CJ 23;5CB;5?5."/KC9;@5)*L94)P(#7%=@$&K7/G !"#$"%&'(")*&/Q37-;!"#CJ S 235!"%")P(T8"5 "-/EBB;5CB;5?5L947"UC4 #7%=@$&K7/G 3 1.1) Opening Vignette: XNorfolk Southern Uses BI for Decision Support to Reach Success^ Company background: Norfolk Southern &0_5B/@`C /CB;8-;@5#("L947"UC4/+Ia '5"9)FJ8 1 )5 4 '7-;F/CR7&%/@." 6K81E$C5K(7-'5;8-;@5#("0/E%"c 500 'B$5 #@9&0_5&;(5 "-1!"&124- 21,000 I%1G C3$ CD- 22 %1/CR "-9("5KE$C577. E1?I0+,-L#1C%&B2461E6#5"9" %/ /C=4G;@50/E%"c 26 =C51("5&F/24J %2 =5C.-"50/E%"c 30,000 #5 ."/9!"&5@5-"5)5;%C4.875 !"L94.!"F59&;(5 "."/&9@5/+Ia&7"I$(.87561($ !"."/*C9."/ "-9("5K(5 ?5T8"5 "-."/ optimize *!"5$5LB.2D 23)P(B// ?.;@5#(" 4 Problem: On-Time delivery *E&0_50AJF" 23;!"#CJ 9C-5CD5TH(B/@F"/*,-.!"F59&$1" /+Ia)F(65857561($7"UC4/+B// ?./CB;@5#("*"./+Ia;8-K87I0)F(1H.#(" K87%"&'" I9()P( S/W %" !"KC$6BB&P@-;+@K@F"F"&;(5 "- 2392 23;?961E."/&PQ37%K87&=Q37 .87)F(&.@9."/ optimize railroad performance /EBB52D&/24.$8" Thoroughbred Operation Plan F/Q7 TOP L945!"%")P(&%Q370p 2002 )5 23;?9&'"=B$8" TOP 4C-I%8%20/E;@ >@<"=&=24-=7)5."/&.:B'(7%H1K8"- S 23%274H8 748"-%".%"4 Data Warehouse .1"4&0_57-#G0/E.7B 23$@.qK@'7- TOP 5 Proposed solution: Norfolk Southern I9(KCD- enterprise data warehouse ',D5%" 9C-5CD5&%Q37'(7%H1;8-&'(" I0&.:B)5#1C-'(7%H161($ '(7%H152D*E+H.)P(-"5I9( C3$ CD-7-#G./61E ?. S Application 235!"%")P(-"5.:;"%"/+)P('(7%H152DI9(&P85.C5 &P85 accessNS t,3-&0_5 '7-6T5. Marketing !")F(TH()P(%"..$8" 14,500 #5 &'("%"9H'(7%H1K8"- S I9( (+(" I%8%2 S/W KC$52D*E&'(")P(-"5I9(&=24- 47 #5) ;"%"/+ !"/"4-"5I9( 4,500 /"4-"5 K87$C5 &0_5K(5 6 Results: 0A**?BC552D data warehouse '4"4&=@3%',D5&0_5 6 & /"IBKG Norfolk Southern )P( '(7%H1%" !"."/$@&#/"EFGF"65$L5(% =Cw5"."/=4"./cGF%"4.!"F59."/K8"- S &.:B'(7%H1*!"5$5%".%"4 61E)F(1H.#("&'("%")P(-"5)5&P@-)F(B/@."/K5&7- (Selfservice) &0_5K(5 7 Changing Business Environment 7-#G./K8"- S .!"1C-&#1Q375748"-/$9&/:$I0;H8."/5!"#7%=@$&K7/G&'("%";5CB;5?5 ."/9!"&5@5'7-=$.&'" &=Q37)F(&'(")*$8" !"I%7-#G./*,-K(7- !"748"-5CD5 '7)F( =@*"/c"KC$6BB (Model) K87I052D Business PressuresyResponsesySupport Model KC$6BB'("-K(5*E0/E.7BI09($4 6/-.99C5K8"- S "-9("5>?/.@* (Business pressures) 7C5&0_5T11C=>G'7;<"=."/6'8-'C5'7->?/.@*)50A**?BC5 ."/;57-K7B (Responses) K876/-.99C5'("-K(5 ."/;5CB;5?5 (Support) &=Q37 !")F(./EB$5."/K8"- S ;E9$.%".',D5 8 Business PressuresyResponsesySupport Model 9 The Business Environment ;<"=6$91(7% 237-#G./9!"&5@574H8)50A**?BC5%2#$"%tCBt(75%"',D5&/Q374 S t,3.87)F(&.@9: L7.";K8"- S 61E 0AJF"K8"- S &P85: #$"%&0_55"5"P"K@ (globalization) 0A**C4'7-;<"=6$91(7% "->?/.@* &P85: &/Q37- 23&.234$'(7-.CBK1"9, #$"%K(7-."/'7-1H.#(", & #L5L142 61E&/Q37-K8"- S 23&.234$'(7-.CB;C-#%z 10 Business Environment Factors FACTOR Markets Consumer demand Technology Societal DESCRIPTION Strong competition Expanding global markets Blooming electronic markets on the Internet Innovative marketing methods Opportunities for outsourcing with IT support Need for real-time, on-demand transactions Desire for customization Desire for quality, diversity of products, and speed of delivery Customers getting powerful and less loyal More innovations, new products, and new services Increasing obsolescence rate Increasing information overload Social networking, Web 2.0 and beyond Growing government regulations and deregulation Workforce more diversified, older, and composed of more women Prime concerns of homeland security and terrorist attacks Necessity of Sarbanes-Oxley Act and other reporting-related legislation Increasing social responsibility of companies Greater emphasis on sustainability 11 Organizational Responses 0/CB&012345KC$&7-*". 9!"&5@5."/&P@-/CB (Reactive), ."/#"9."/cG18$-F5(" (Anticipative), ."/0/CBKC$&7- (Adaptive) 61E 9!"&5@5."/&P@-/?. (Proactive) TH(*C9."/7"*9!"&5@5K87I052D &P85 *C9 !"6T5.1?4? >G )P(KC$6BB "->?/.@*)F%8 S 61E%25$CK.//% 0/CBL#/-;/("-'7-./EB$5."/ "->?/.@* (business processes) &'("I0%2;8$5/8$%)5.1?8%=C5>%@K/ "->?/.@* (business alliances) 0/CB0/?-/EBB;"/;5& U'7-7-#G./ 0/CB0/?-#$"%;C%=C5>G.CB#H#8 (" ./EK?(5)F(&.@95$CK.//%61E."/;/("-;//#G;@3-)F%8 S 12 0/CB0/?-."/)F(B/@."/61E#$"%;C%=C5>G.CB1H.#(" .("$I0;H8="c@P4G7@&1:# /75@#;G (e-commerce) .("$I0;H8."/T1@K6BB make-to-order production 61E on-demand manufacturing 61E ."/)F(B/@."/K8"- S )P( IT )F%8 S &=Q370/CB0/?-."/;Q37;"/ ."/&'("+,-'(7%H1 ()56-8'7-."/#(5=B ;"/;5& U) 61E ."//$B/$%'(7%H1 ;57-K7BK87."/9!"&5@5.@*.//%'7-#H86'8-)F(&/:$',D5 (&P85 )5&/Q37-'7-/"#" ."/;8-&;/@% ."/'"4 ."/77.T1@K<Cc|GF/Q7B/@."/)F%8 S) 0/CB&012345-"5'7-=5C.-"5)5;!"5C.-"5)F(&0_5/EBB7CKL5%CK@ !"./EB$5."/KC9;@5)* 23%2#$"%658575 PC9&*5 )F(&0_56BB7CKL5%CK@ 0/CB0/?-./EB$5."/KC9;@5)*T8"5."/$@&#/"EFG 23 !"',D5%"748"-+H.K(713 Closing the Strategy Gap &0~"0/E;-#GF1C.7C5F5,3-'7-."/)P(#7%=@$&K7/G&'("%"P8$4)5."/KC9;@5)*.:#Q7 7!"5$4#$"%;E9$.)5."/09P87-$8"- (closing the gap) /EF$8"-0/E;@ >@<"='7."/9!"&5@5>?/.@*'7-7-#G./)50A**?BC561E0/E;@ >@<"= 23=,-0/E;-#G K"% 23I9( 7>@B"4I9()5=C5>.@* (mission) &0~"0/E;-#G (objectives) &0~"F%"4 (goals) 61E.1 4? >G 23*EB//1?+,-;@3-K8"- S 23.18"$%"'("-K(5 14 1.3) Managerial Decision Making ."/*C9."/ (Management) #Q7 ./EB$5."/."/)P( /C=4"./K8"- S &=Q37)F(B//1? +,-&0~"F%"4'7-7-#G./ Inputs: resources Output: attainment of goals Measure of success: outputs / inputs 9C-5CD5*,-.18"$I9($8" Management ≅ Decision Making ."/KC9;@5)* (Decision making): ."/&1Q7.65$ "- 2392 23;?9 (the best solution) *".;7- "-&1Q7.F/Q7%"..$8" 15 • B B" 9("5."/*C9."/ 10 6BB'7-%@5KtG&B@/G. (Mintzberg’s 10 Managerial Roles) • 0@;C%=C5>G/EF$8"-B?##1 (Interpersonal) • 1) ."/&0_5FC$F5(" (figurehead) • 2) ."/&0_5TH(5!" (Leader) • 3) ."/&0_5TH(P8$4(Liaison) • ."/B7..18"$ (Informational) • 4) ."/&~"%7- (Monitor) • 5) ."/&T46=/8'8"$ (Disseminator) • 6) ./EB7.&;24- (Spokesperson) 16 • ."/KC9;@5)* (Decisional) • 7) ."/&0_5&*("'7- (Entrepreneur) • 8) &0_55C.*C9."/.CB&/Q37-4?8-4". (Disturbance handler) • 9) &0_5TH(*C9;// /C=4"./ (Resource allocator) • 10) &0_55C.&*/*"K87/7- (Negotiator) TH(B/@F"/ CD-F1"4 L94&N="E748"-4@3-TH(B/@F"//E9CB;H-5CD5 -"5F1C.'7-=$.&'"#Q7 ."/&0_5TH(KC9;@5)* 17 Decision Making Process TH(*C9."/%C.*E !"."/KC9;@5)*K"% 4 'CD5K75K87I052D (%C.&/24..C5$8" 65$ "-&P@$@ 4"U";K/G (scientific approach)) 1) 5@4"%0AJF" (F/Q7 L7.";) 2) ;/("-KC$6BB 23)P(7>@B"40AJF")5L1.6F8-#$"%&0_5*/@3) B8-P2D "-6.(0AJF" 23&0_5I0I9(T8"5 "-KC$6BB 23;/("-',D5%" 61E0/E&%@5 "-6.( &F18"5CD5 4) &0/24B& 24B #C9&1Q7. 61E&1Q7. "-6.(0AJF" 23&0_5I0I9(&=Q376.(0AJF"'("-K(5 18 (Decision support systems (DSS)) ./7B."/ "! -"5&P@-65$#@9 (conceptual framework) 7C5&0_5./EB$5."/&=Q37)P( ;5CB;5?5."/ !"."/KC9;@5)*9("5."/B/@F"/ L94 C3$I0*E !"0AJF")F(74H8)5/H0 '7-KC$6BB61E$@&#/"EFGF"#!"K7BT8"5 "-KC$6BB&P@-0/@%"c (quantitative model) 19 Decision making is difficult, because & #L5L142 /EBB;"/;5& UK8"- S &#/Q37-%Q7 23)P()5."/#(5F"'CD5;H- (advanced search engines) 61ET11C=>G 236T8.$("-77.I0 ;@3-&F18"52D%2 "-&1Q7.)F()P(%".',D5 S &/Q374 S *5I%8/H($8"*E&1Q7.)P(748"-I/92 '(7BC-#CB'7-/CRB"161E#$"%*!"&0_5)5."/ !"K"%'(7.!"F59K8"- S #$"%I%8%2 &;+24/<"= "-."/&%Q7- 1C >@."/.87."//("4 ."/6'8-'C5 61E."/&012345601"-9("5#$"%K(7-."/'7-1H.#("t,3-.87)F(&.@9#$"%I%8658575%".',D5 ;@3-&F18"52D .87)F(&.@9#$"%4?8-4".)5."/ !"5"4;@3- 23*E&.@9',D5K"%%"61E;@3- 23*E&.@9',D5)5 75"#K9($4 %20A**C4%".%"4 23K(7-."/."/KC9;@5)* 23&/:$',D5 ."/&012345601-&.@9B874',D561E !"5"4I9(4".;8-T1)F(."/&/245/H(6BB17-T@917-+H. !"I9(4". 61E."/K@9;@5)* T@9=1"9.87)F(&.@9#8")P(*8"4;H20 Why Use Computerized DSS Computerized DSS ;"%"/+P8$4)5&/Q37-."/KC9;@5)*T8"5 "-: #$"%&/:$)5."/#!"5$c 0/CB0/?-9("5."/;Q37;"/61E."//8$%%Q7.C5 !"-"5 &=@3%T1@KT1)F(.CB;%"P@.'7-.1?8% ."/*C9."/.CB'(7%H161E."/*C9&.:BI9(/CB."/0/CB0/? P9&P4)5&/Q37-'29*!".C9)59("5#$"%*!"61E."/0/E%$1'(7%H1 (cognitive limits) ;5CB;5?5&/Q37-#?c<"= 61E#$"%#187-KC$ %2."/)P( Web !")F(;5CB;5?5I9( ?. 23 ?.&$1" 21 A Decision Support Framework (by Gory and Scott-Morten, 1971) 22 A Decision Support Framework y cont. Degree of Structuredness (Simon, 1977) ."/KC9;@5)*6B8-I9(&0_5 Highly structured (a.k.a. programmed) Semi-structured Highly unstructured (i.e., non-programmed) 0/E&< '7-."/#$B#?% (Anthony, 1965) Strategic planning (top-level, long-range) Management control (tactical planning) Operational control 23 Simons Decision-Making Process 24 ./EB$5."/)5."/ !"."/KC9;@5)*%2 4 &a; (phase) #Q7 (be defined by Simon) • 1) ."/.!"F590AJF" (Intelligence) &0_5."/#(5F"'(7.!"F59 23)P()5."/KC9;@5)* • 2) ."/77.6BB (Design) &0_5."/;/("- ."/=Cw5" 61E."/$@&#/"EFG "-&1Q7..1?8% '7-."/./E !" 23&0_5I0I9( (solutions) • 3) ."/&1Q7. (Choice) &0_5."/&1Q7..1?8%'7-."/./E !"*".F1"4 S .1?8%'("-K(5 • 4) ."/5!"I0)P(-"5 (Implementation) 5!" "-&1Q7. 23&1Q7.I$(I0)P(.CB;+"5."/cG 23 K(7-KC9;@5)* (F%"4+,-."/6.(0AJF" F/Q7 !")F(L7.";&0_5*/@-',D5%") 25 Computer Support for Structured Decisions 0AJF" 23&0_5L#/-;/("- (Structured problems): =B$8"&.@9',D5tD!" 61E%2/E9CB'7#$"%&0_5L#/-;/("-;H- (high level of structure) *,-&0_5I0I9($8" 0AJF"&F18"52D5!"%";/?077.%"I9(PC9&*5 5!"I0$@&#/"EFG 61E*C9 F%$9F%H877.&0_5&/Q37- S 23&N="E&*"E* &P85 ."/KC9;@5)*)5&/Q37-*E !"',D5%"&7-F/Q7*EtQD7%")P( (make-or-buy decision), ."/*C9 !"-B0/E%"c/"4*8"4, ."/*C9;// /C=4"./, ."/./E*"4 ;@5#(", ."/*C9tQD7;@5#("61E."/#$B#?%;@5#("#-#1C ."/F"65$ "-."/6.(0AJF"'7-6K81EF%$9F%H8#$/7"UC4U";K/G "-9("5."/ *C9."/ (Management Science) &'("P8$4 26 Management Science Approach B"- 2/H(*C..C5)5PQ37 ."/$@*C4."/9!"&5@5-"5 (Operation Research) )5."/6.0AJF" TH(*C9."/#$/ !"K"% 5 'CD5K75'7- MS 9C-52D 1) 5@4"%0AJF" 2) 6B8-.1?8%0AJF"K"%F1C.&.c|G%"K/R"5 (standard category) (*) 3) ;/("-KC$6BB 23)P(7>@B"40AJF")5L1.6F8-#$"%&0_5*/@- (real-world problem) 4) B8-P2D65$ "-6.(0AJF" 23&0_5I0I9(7C5&.@9*".KC$6BB'7-0AJF" 23;/("-',D5 61E 0/E&%@565$ "-."/6.(0AJF"&F18"5CD5 5) &0/24B& 24B #C9&1Q7. 61E&1Q7. "-6.(0AJF" 23&0_5I0I9(&=Q376.(0AJF"'("-K(5 27 Automated Decision Making 65$ "-)F%8 23;C%=C5>G.C5 235!"%")P(;5CB;5?5."/ !"."/KC9;@5)* %C.5!"%")P(.CB."/ KC9;@5)*.CB0AJF" 23%2#$"%&0_5L#/-;/("-;H- I9(6.8 /EBBKC9;@5)*6BB7CKL5%CK@ F/Q7 Automated decision systems (ADS) (or decision automation systems) ADS #Q7 /EBB 23%2=QD5R"574H8B5.&.c|G (rule-based system) 23)F(#!"K7B6.80AJF" 9("5."/*C9."/ 23&.@9tD!" S )5=QD5 23)9=QD5 23F5,3- 23&N="E&*"E* &P85 /EBB75?%CK@."/)F(;@5&PQ37748"--8"4 (simple-loan approval system) ADS &/@3%)P(-"5)57?K;"F.//%."/B@5 &/24.$8" revenue (or yield) management (or revenue optimization) systems /"#"'7-KC$L94;"/*E74H8B5=QD5R"5'7-#$"%K(7-."/KC$*/@- S (actual demand) 28 Automated Decision Making 0A**?BC552D 7?K;"F.//%."/)F(B/@."/F1"4 S 0/E&< 4C-#-)P(KC$6BB."/KCD-/"#" #1("4 S 23.18"$%"'("-K(5 (F%"4+,- %2#$"%K(7-."/;@5#("%". .:;"%"/+KCD-/"#";HI9() ADS +H.'CB&#1Q375L94 business rules! Business rules: a strategy provides high-level direction about what an organization should do. Business rules provide detailed guidance about how a strategy can be translated to action 29 Computer Support for Unstructured Decisions 0AJF"6BBI%8&0_5L#/-;/("- (Unstructured problems) ;"%"/+)F(."/;5CB;5?5 &0_5;8$5 S (partially support) L947"UC4 computerized quantitative methods $@>2."/&F18"52DK(7-."/#!"K7B 23&N="E&*"E*-;79/CB.CB0AJF"&0_5&/Q37- S I0 $@>2."/&F18"52D7"UC40/EL4P5G*".'(7%H161E;"/;5& U ;"%CJ;!"5,.61E."/#"9#E&5*E%2;8$5;!"#CJ ."/;Q37;"/ 237"UC4#7%=@$&K7/G61E& #L5L1427C5.87)F(&.@9."/ !"-"5/8$%.C57C5 .87)F(&.@9."/*C9."/#$"%/H(%C.+H.5!"%")P(-"5 30 Computer Support for Semi-structured Problems ."/6.(0AJF"6BB.,3-L#/-;/("-7"*&.@9*".."/T;%.C5/EF$8"-/E&B24B0@BCK@ %"K/R"5 23)P(&0_565$ "-6.(0AJF".CB."/0/E&%@5(&=Q37KC9;@5)*)'7-%5?`4G )5./c2&P8552D &/"*E)P( MS &'("I0P8$4)5;8$5 23&0_5L#/-;/("-61E)P( DSS &'("I0 *C9."/.CB;8$5 23I%8&0_5L#/-;/(" L947"UC4'(7%H161E;"/;5& U '7B&'K'7- "-&1Q7.K8"- S 235!"%")P(6.(0AJF" *E !")F(%7-&F:5T1./E B 237"*&.@9',D5K"%%" 31 Automated Decision-Making Framework 32 Concept of Decision Support Systems Classical Definitions of DSS /EBB 23%2."/K7BLK( 237"UC4#7%=@$&K7/G&'("P8$4 (Interactive computer-based systems) 23P8$4)F(TH(KC9;@5)*)P(0/EL4P5G.CB'(7%H161EKC$6BB CD-F1"4I0 6.(0AJF"6BBI%8&0_5L#/-;/("-" - Gorry and Scott-Morton, 1971 /EBB;5CB."/KC9;@5)*t,3-&PQ37%K87 /C=4"./ 23%20AJF"6K81E#5&'(".CB #$"%;"%"/+'7-#7%=@$&K7/G&=Q370/CB0/?-#?c<"='7-."/KC9;@5)*)F(92',D5 %C5 &0_5/EBB;5CB;5?5 237"UC4#7%=@$&K7/G)P(;!"F/CBTH( !"."/KC9;@5)*9("5."/*C9."/ 23K(7-6.(I'0AJF"6BB.,3-L#/-;/("- - Keen and Scott-Morton, 1978 33 DSS as an Umbrella Term & 7% DSS ;"%"/++H.)P()5& 7%.$("- S &=Q377>@B"4/EBB)9 S 23)P(#7%=@$&K7/G &'("%";5CB;5?5."/KC9;@5)*)57-#G./ &P85 /EBB."/*C9."/#$"%/H( C3$ CD-7-#G./ /EBB;5CB;5?5."/KC9;@5)* 23)P( &N="EaA-.GPC5)57-#G./ (."/K1"9 ."/BCJP2 ."/&-@5 ."/T1@K ."/$"-6T5 ."/*C9."/Lt87?0 "5 7Q35 S) 34 DSS as a Specific Application )5#$"%F%"4 23B2B6#B1- DSS *EF%"4+,- ./EB$5."/;!"F/CB;/("- customized applications t,3-5!"%")P(.CB0AJF"6BB.,3-L#/-;/("-61EI%8%2L#/-;/(" 7-#G0/E.7B'7-;+"0AK4.//%'7- DSS (DSS Architecture) Data, Model, Knowledge/Intelligence, User, Interface (API and/or user interface) DSS %C.+H.;/("-L945!"7-#G0/E.7B'("-K(5%"/$%.C5748"-F1$% S 35 High-Level Architecture of a DSS 36 Types of DSS DSS %2 2 0/E&< F1C. S #Q7: DSS 23%?8-&5(5I0 23KC$6BB (Model-oriented DSS): KC$6BB 23&5(5I0&P@-0/@%"c&=Q37)P( ;/("-#!"K7B 23)P()5."/6.(0AJF" DSS 23%?8-&5(5I0 23'(7%H1 (Data-oriented DSS): ;5CB;5?5 ad-hoc reporting and queries $@$Cw5"."/*". DSS I0;H8 Business Intelligence ."/)P( DSS I9(&#1Q375*".TH(P!"5"J."/I0;H8TH(*C9."/ 61EI04C-)#/.:I9( *E)P( &%Q37)9.:I9( 23IF5.:I9( %2&#/Q37-%Q7K8"- S &'("%"&;/@% &P85 OLAP, data warehousing, data mining, intelligent systems, %2."/9!"&5@5."/T8"5 "-& #L5L142&$:B &%Q370/E.7B&'(" 9($4.C5*,-5!"I0;H8& 7% Xbusiness intelligence^ (BI) 61E Xbusiness analytics^ 37 Business Intelligence (BI) BI &%Q37%7-)5& 7%.$("- S %C5#Q7;+"0AK4.//%/8$%'7-&#/Q37-%Q7K8"- S R"5'(7%H1 &#/Q37-%Q7 23)P()5."/$@&#/"EFG ."/0/E4?.KG)P(-"5 61E.//%$@>2K8"- S (*E#1("4 S .CB DSS) BI *E74H8)5/H06BB content-free expression 9C-5CD5%C5*E)F( #$"%F%"4 236K.K8"-.C5K87B?##1 236K.K8"-.C5I0 &0~"0/E;-#GF1C.'7- BI .:#Q7 P8$4)F(&'("+,-'(7%H1 (61EKC$6BBK8"- S) I9(-8"4 &=Q37)F(TH(*C9."/ "->?/.@*%2#$"%;"%"/+)5."/ !"."/$@&#/"EFG;@3-K8"- S I9( BI P8$4&012345'(7%H1I0&0_5;"/;5& U (61E7-#G#$"%/H() &=Q37KC9;@5)* 61E5!"I0 9!"&5@5-"5)5 ("4 23;?9 38 A Brief History of BI & 7% BI +H.5!"%")P(#/CD-6/.L94 Gartner Group )5P8$-.1"-0p 1990 748"-I/.:K"% 65$#$"%#@9'7-%C5&.@9%".87561($ 1970s - MIS reporting - static/periodic reports 1980s - Executive Information Systems (EIS) 1990s - OLAP, dynamic, multidimensional, ad-hoc reporting -> coining of the term XBI^ 2005+ Inclusion of AI and Data/Text Mining capabilities; Web-based Portals/Dashboards 2010s - yet to be seen 39 The Evolution of BI Capabilities The Architecture of BI /EBB BI %27-#G0/E.7BF12. S 4 9("5 #Q7 #1C-'(7%H1 (data warehouse) t,3-)P(&0_56F18-&.:B'(7%H1 ."/$@&#/"EFG "->?/.@* (business analytics) 6F18-/$B/$%&#/Q37-%Q7&=Q37)P( ;!"F/CB *C9."/ (manipulating) ."/ !"&F%Q7- (mining) 61E."/$@&#/"EFG (analyzing) '(7%H1)5#1C-'(7%H1 ."/*C9."/0/E;@ >@<"= "->?/.@* (business performance management) (BPM) &=Q37&~"9H61E$@&#/"EFG0/E;@ >@<"= ;8$5&PQ37%K87.CBTH()P( (user interface) (&P85 dashboard) 41 A High-Level Architecture of BI 42 Components in a BI Architecture #1C-'(7%H1 (data warehouse) #Q7 6F18-&.:B'(7%H1'5"9)FJ8 23&7"I$(&.:B wellorganized historical data ."/$@&#/"EFG "->?/.@* (Business analytics) #Q7 &#/Q37-%Q7K8"- S 23P8$4&012345'(7%H1 I0&0_5;"/;5& U61E7-#G#$"%/H( ."/*C9."/0/E;@ >@<"= "->?/.@* (Business performance management (BPM)) P8$4)F( !"."/&~"9H !"."/$C9 !"."/&0/24B& 24BKC$P2D$C90/E;@ >@<"=F1C. (key performance indicators) ."/&PQ37%K87.CBTH()P( (User interface) (&P85 dashboards) P8$4)F(&'("+,-61E*C9."/.CB 7-#G0/E.7B'7- BI )5;8$57Q35 S I9(-8"4',D5 43 Styles of BI MicroStrategy, Corp. I9(64. BI 77.&0_5 5 ;IK1G #Q7 1) ."/ !"/"4-"561E."/6*(-&KQ75 (report delivery and alerting) 2) ."/ !"/"4-"5'7-$@;"F.@* (enterprise reporting) (."/)P( dashboards 61E scorecards) 3) ."/$@&#/"EFG6BB 3 %@K@ (cube analysis) (B"- 2/H(*C..C5)5PQ37'7- slice-and-dice analysis) 4) ."/;QB#(5'(7%H1&0_5#/CD-#/"$ (ad-hoc queries) 5) ;+@K@61E."/ !"&F%Q7-'(7%H1 (statistics and data mining) 44 The Benefits of BI #$"%;"%"/+)5F"/)F(;"/;5& U 236%854!"&%Q37K(7-."/ CD-52D/$%+,- ."/9H 0/E;@ >@<"='7-7-#G./ (F/Q7;8$5)9;8$5F5,3-)6BB&$1"*/@- (real-time view) *".."/;!"/$*'7- Thompson (2004) =B$8" Faster, more accurate reporting (81%) Improved decision making (78%) Improved customer service (56%) Increased revenue (49%) See Table 1.3 for a list of BI analytic applications, the business questions they answer and the business value they bring 45 The DSSyBI Connection 0/E."/6/. ;+"0AK4.//%'7- CD-;7-&/Q37-52D#1("4.C5%". &=/"E BI $@$Cw5"."/ %"*". DSS 0/E."/ 23;7- DSS ;5CB;5?5L94K/-I04C-."/ !"."/KC9;@5)* 23&N="E&*"E*)5'cE 23 BI *C9F";"/;5& U 23TC560/K"%&$1" 23%2#$"%6%854!" 61E;5CB;5?5 ."/ !"."/KC9;@5)* "-7(7% 0/E."/ 23;"% BI %2."/%?8-&5(5I0 23.14? >G61E&/Q37-&.234$.CB/E9CB;H- L94&N="E 748"-4@3-7-#G0/E.7B&.234$.CB BPM 61E dashboard )5'cE 23 DSS *E%?8-&5(5I0 23 ."/$@&#/"EFG 46 The DSSyBI Connection y cont. 0/E."/ 23;23 /EBB BI CD-F%9+H.;/("-',D5L94%2&#/Q37-%Q761E7-#G0/E.7BK8"- S 23 %2'"4)5K1"974H861($ )5'cE 23 DSS %C.;/("-L94&/@3%."/I%8%27EI/&14 0/E."/ 23F(" .//%$@>2'7- DSS 61E&#/Q37-%Q7 23)P( %C.=Cw5"%"*". ;+"BC5."/U,.`" )5'cE 23.//%$@>2'7- BI 61E&#/Q37-%Q7 23)P(%C.=Cw5"*".B/@`C "-9("5t7aKG6$/G 0/E."/ 23F. &#/Q37-%Q7F1"4 S KC$ 23 BI 5!"%")P(+H.=@*"/c"$8"&0_5&#/Q37-%Q7'7DSS (&P85 data mining 61E predictive analysis t,3-+Q7&0_5&#/Q37-%Q7F1C. 23)P()5 CDBI 61E DSS) 47 The DSSyBI Connection y cont. 6%($8"B"-#5*E%7-$8" DSS C9& 24%.CB BI 6K8/EBB'7-%C5I%8&F%Q75.C5 B"-#5&PQ37$8" DSS &0_5;8$5F5,3-'7- BI F5,3-)5;@3-&F1"52D.:#Q7 analytical tools B"-#5#@9$8" BI #Q7./c2=@&U`'7- DSS 235!"%")P(.CB ."/ !"/"4-"5 ."/ ;Q37;"/ 61E."//8$%%Q7.C5 !"-"5 ()5/H06BB'7- data-oriented DSS) BI #Q7T1'7-."/$@$Cw5"."/748"-K87&5Q37- 9C-5CD5 DSS *,-&0_57-#G0/E.7B =QD5R"5'7- BI )5F5C-;Q7&18%52D *E64. DSS 77.*". BI MSS = BI and/or DSS 48 • (Management support systems (MSS)) /EBBF5,3- S 235!"&7"&#/Q37-%Q7F/Q7& #5@#;5CB;5?5."/KC9;@5)*0/E&< )9 0/E&< F5,3-%")P( !"."/KC9;@5)* "-9("5."/*C9."/ 49 A Work System View of Decision Support (Alter, 2004) &%Q37KC9#!"$8" Xsystems^ 77.*". DSS 61($&5(5I0 23 Xdecision support^ %C5*E&F1Q7 &0_5 Xuse of any plausible computerized or noncomputerized means for improving decision making in a particular repetitive or nonrepetitive business situation in a particular organization^ /EBB-"5 (Work system) F%"4+,- /EBBF5,3- S t,3-%5?`4G61E/F/Q7&#/Q37-*C./&'(" I0%2;8$5/8$%)5."/9!"&5@5./EB$5."/ "->?/.@* (business process) ."/)P( ;"/;5& U & #L5L142 61E /C=4"./7Q35 S &=Q37;/("-T1@K<Cc|G61E/F/Q7B/@."/ )F(.CB1H.#(" CD-<"4)5F/Q7<"457.7-#G./ 50 Elements of a Work System 1) ./EB$5."/ "->?/.@* (Business process) %2#$"%F1"4)5./EB$5."/ 23;C%=C5>G.C5 %2F1"4'CD5K75 2375?./%.C5I0 F/Q7 .//%$@>2F1"F1"4+H.5!"%")P(-"5&=Q37 9!"&5@5."/)5F1"4 S 'CD5K75 2) TH(%2;8$5/8$% (Participants) %2."/.7B/% 2392',D5 %2 C.`E 2392',D5 ."/."/)F(#!"%C35 ;CJJ")5/E9CB;H-',D5 F/Q7 %2."/0~75'(7%H1.1CB 23&/:$',D5*5&0_56BB&$1"*/@3) ;"/;5& U (Information) %2#?c<"='7-;"/;5& U92',D5 %2;"/;5& U)F()P(&%Q37 K(7-."/)P( F/Q7%2."/5!"&;57;"/;5& U 23;!"#CJ)F( /"B 4) & #L5L142 (Technology) %2."/*C9&.:B'(7%H1 ."/5!".1CB%")P( %2KC$6BB %27C1.7/@>,% %2#$"%;"%"/+ "-9("5;+@K@F/Q7/H0./"a F/Q7 ."/;57-K7B.CB#7%=@$&K7/G 92 ',D5 51 Elements of a Work System y cont. 5) T1@K<Cc|GF/Q7B/@."/ (Product and services) %265$ "- 2392',D5)5."/0/E&%@5."/ KC9;@5)*+,-65$L5(%T1@K<Cc|GF/Q7B/@."/ 23&0_5I0I9( 6) 1H.#(" (Customers) %265$ "- 2392',D5)5."/)F(1H.#("&'("%"%2;8$5/8$%)5 ./EB$5."/KC9;@5)*61E%7-&F:5#$"%K(7-."/'7-1H.#("748"-PC9&*5 7) L#/-;/("-=QD5R"5 (Infrastructure) %2."/)P(L#/-;/("-=QD5R"5/8$%.C5748"-%2 0/E;@ >@T1 t,3-*E5!"I0;H8."/0/CB0/?-)F(92',D5&/Q374 S 8) ;<"=6$91(7% (Environment) %2.//%$@>2 2392',D5)5."//8$%%Q7.C5'7-TH( 23&.234$'(7*".;<"=6$91(7%/7B S 9) .14? >G (Strategy) %2.14? >G)5."/9!"&5@5-"5 23%2=QD5R"5K8"-.C5)5/EBB-"5 52 Major Tool Categories for MSS TOOL CATEGORY TOOLS AND THEIR ACRONYMS Data management Databases and database management system (DBMS) Extraction, transformation, and load (ETL) systems Data warehouses (DW), real-time DW, and data marts Online analytical processing (OLAP) Executive information systems (EIS) Geographical information systems (GIS) Dashboards, Information portals Multidimensional presentations Optimization, Web analytics Data mining, Web mining, and text mining Business performance management (BPM)/ Corporate performance management (CPM) Business activity management (BAM) Dashboards and Scorecards Group decision support systems (GDSS) Group support systems (GSS) Collaborative information portals and systems Web 2.0, Expert locating systems Knowledge management systems (KMS) Expert systems (ES) Artificial neural networks (ANN) Fuzzy logic, Genetic algorithms, Intelligent agents Enterprise resource planning (ERP), Customer Relationship Management (CRM), and Supply-Chain Management (SCM) Reporting status tracking Visualization Business analytics Strategy and performance management Communication and collaboration Social networking Knowledge management Intelligent systems Enterprise systems Source: Table 1.4 Hybrid (Integrated) Support Systems &0~"0/E;-#G'7- computerized decision support (L94I%8;5)*&PQ37F/Q7>//%P"K@ '7-%C5) .:#Q7 P8$4."/*C9."/)5."/6.(0AJF" "-9("5."/*C9."/F/Q70AJF" 23 &.234$.CB7-#G./ (61E0/E&%@5L7.";61E.14? >G)) I9(&/:$',D561E92',D5.$8"&9@% 23I%8 )P(#7%=@$&K7/G ?. S 0/E&< '7-&#/Q37-%Q7487%%2#$"%;"%"/+/E9CBF5,3-61E%2'29*!".C9)5KC$ %C5&7- L94."/T5$./$%&#/Q37-%Q7F1"4 S KC$&'("9($4.C5 &/";"%"/+ !"."/ 0/CB0/?-."/;5CB;5?5."/KC9;@5)*)F(92',D5I9( &=/"E&#/Q37-%Q7KC$F5,3-7"**EI0 P9&P4*?97875'7-&#/Q37-%Q772.KC$F5,3-I9( 9C-5CD565$L5(%)5."/=Cw5"*,-%?8-I0 )5 "-/EBB;5CB;5?56BBT;% (hybrid (integrated) support system) 54 Hybrid (Integrated) Support Systems 0/E&< '7-."/#$B/$% (Type of integration) )P(&#/Q37-%Q76K81EKC$7@;/E*"..C5&=Q376.(0AJF")5%?%%7- 23K8"-.C5 )P(F1"4 S &#/Q37-%Q7 23#$B/$%.C56BBF1$% S (loosely integrated tool) CD-52D .:&=Q37;8-T8"5'(7%H1*".&#/Q37-%Q7F5,3-I04C-72.KC$F5,3-&=Q37 !"."/0/E%$1T1 )P(F1"4 S &#/Q37-%Q7 23#$B/$%.C56BB%C35#- (tightly integrated tools) &%Q37 %7-*".TH()P(61($*E&F:5$8" %C5&0_5/EBB&924$.C5 )5./EB$5."/6.(I'0AJF"t,3-K(7-9!"&5@5-"5 236K.K8"-.C5 &#/Q37-%Q7*EK(7;5CB;5?5t,3-.C561E.C5 55 *BFC$'(7 %2#!"+"%%C4#/CBzz. 56