CHAPTER 12
Business Analytics
CHAPTER OUTLINE
12.1 Managers and Decision Making
12.2 What Is Business Intelligence?
12.3 Business Intelligence Applications for
Data Analysis
12.4 Business Intelligence Applications for
Presenting Results
12.5 Business Intelligence in Action: Corporate
Performance Management
LEARNING OBJECTIVES
1. Explain different ways in which IT supports
managerial decision making.
2. Provide examples of different ways that
organizations make use of business
intelligence.
LEARNING OBJECTIVES (continued)
3. Explain the value that different BI
applications provide to large and small
businesses.
4. Offer examples of how businesses and
government agencies can use different BI
applications to analyze data.
LEARNING OBJECTIVES (continued)
5. Explain how your university could use CPM
to effect solutions to two campus problems at
your university.
Chapter Opening Case
12.1 Managers and Decision Making
Management
The Manager’s Job and Decision Making
Managers have three basic roles
(Mintzberg 1973)
Interpersonal roles
Informational roles
Decisional roles
The Manager’s Job & Decision Making
(continued)
Decisions and Decision making
Decision Making Process
Why Managers Need IT Support
The number of alternatives to be considered
constantly increases.
Decisions must be made under time
pressure.
Decisions are more complex.
Decision makers can be in different
locations and so is the information.
A Framework for Computerized
Decision Analysis
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.
Highly
structured
Order entry
Semistructured
Higly
unstructured
Loan approval
Building new plant
The Nature of Decisions
The second dimension of decision support
deals with the nature of decisions
Operational control
Management control
Strategic planning
12.2 What Is Business Intelligence?
Can We Predict the Weather?
(IT’s About Business 12.2)
The Scope of Business Intelligence
Smaller organizations:
Excel spreadsheets
Larger organizations:
Data mining, predictive analytics,
dashboards
How Organizations Use BI
Develop few, related BI applications
Data mart
Develop infrastructure to support enterprisewide BI
Enterprise data warehouse
Support organizational transformation
Enterprise data warehouse
12.3 Business Intelligence Applications
for Data Analysis
Multidimensional Analysis or
Online Analytical Processing
(OLAP)
Data Mining
Decision Support Systems
Multidimensional Analysis or
Online Analytical Processing (OLAP)
Example of
Data Cube
Data Mining
Data
Trends, behaviors, unknown patterns
Data Mining (continued)
Data Mining
Used in Targeted
Marketing
How Business Intelligence Works
Decision Support Systems (DSS)
DSS capabilities
Sensitivity analysis
What-if analysis
Goal-seeking analysis
DSS Example
12.4 Business Intelligence Applications
for Presenting Results
Dashboards
Data Visualization Technologies
Geographic Information Systems
Real-Time BI
Digital Dashboard (example)
Digital Dashboard (example)
Digital Dashboard Demo
http://www.informationbuilders.com/rfr/qtdem
o/AdvVis_ExecDash/AdvVis_ExecDash.html
A Bloomberg Terminal
Management Cockpit
Data Visualization Systems
The Power of Visualization
Even though a picture is “worth a thousand
words,” we have to be very careful about just
what we are seeing.
Remember, on the Internet, it is
“user beware!”
New York City Police Department
Command Center
Data visualization in action
Example of data visualization
Hans Rosling at the TED Talks
Geographic Information System
GIS for
existing
land use
GISMO
GISMO is a geographic information system
developed for the city of Corvallis, Oregon.
Real-Time BI
(IT’s About Business 12.4)
Reality Mining
12.5 Business Intelligence in Action:
Corporate Performance Management
Chapter Closing Case