Business Intelligence Literature Review 3u223p
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Running head: BUSINESS INTELLIGENCE Business Intelligence Liberty University Audrey Dodson May 10, 2013
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BUSINESS INTELLIGENCE
2 Abstract
The business environment is constantly changing and organizations need reliable, accurate, and effective business information to meet consumer’s needs for growth and sustainability. Business intelligence is a method employed by companies to assist in analyzing and presenting data for more informed decision making. The term business intelligence is relatively new, but the system evolves from decision systems (DSS), executive information systems (EIS), and management information systems (MIS) over a period of forty years. Business intelligence refers to applications and technologies for consolidating, analyzing, and providing access to vast amounts of data to help s make better operational and strategic decisions. A business intelligence system will help facilitate better business decisions and improve business performance optimizing value for the organization.
BUSINESS INTELLIGENCE
3 Business Intelligence
With the advancement of technology, consumers have become more sophisticated. The expectations of consumers’ needs for service and products are creating new challenges and growth opportunities for companies. The business environment is constantly changing and organizations need reliable, accurate, and effective business information to meet consumer’s needs for growth and sustainability. Business intelligence is one method employed by companies to assist in analyzing and presenting data for more informed decision making. What is Business Intelligence? The term business intelligence is relatively new, but the system evolves from decision systems (DSS), executive information systems (EIS), and management information systems (MIS) over a period of forty years (Negash, 2004). Business intelligence refers to applications and technologies for consolidating, analyzing, and providing access to vast amounts of data to help s make better operational and strategic decisions. Business intelligence is a computer-based system that combines data gathering, data storage, and knowledge management with analytical tools to make complex internal information and competitive information readily available to planners and decision makers. A business intelligence system will help facilitate better business decisions and improve business performance optimizing value for the organization (Paladino & Williams, 2008). Being data driven, the technology combines data gathering, data storing, with analysis to provide input in the form of reports. The reports are used for decision making, identification of new opportunities, estimating and predicting, and operational inefficiencies. Typical uses for business intelligence are financial budgeting, planning and forecasting, sales and marketing, performance management, service and , risk analysis, E-Commerce, predictive monitoring, cost reduction. The essential components of
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business intelligence are real-time data warehousing, business analytics, and interface (Negash, 2004). Data Warehousing Data warehousing is the heart of the business intelligence system. The data warehouse holds data that has been extracted from operational systems and made available as historical information for ad-hoc queries and reports. Within the data warehouse relevant information (data) is clustered together for easier access, and grouped according to time periods. Once the data is placed in the data warehouse, it is not updated; the data remains as historical records. Included in the data warehouse are organized and summarized historical data and current data. Combined, this information provides real-time decision . The data warehouse handles the integration of data from all data sources. The following diagram illustrates the process of extracting, transforming, and loading data from other data sources to the data warehouse for reporting and analysis (Sastry, 2013).
(Diagram1: Data Warehouse Overview, 2013)
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End s generate reports and create queries to retrieve information from the data warehouse. (Zangaglia, 2006). The benefits of the data warehouse are:
Improved end- access to relevant data
Increased data consistency
Lower computing costs/increased productivity
Single source combining data from separate sources
Infrastructure s changes in computer systems and business structures
End-s can perform ah-hoc queries and reports without impacting the performance of operational systems
Business Analytics Technological advances have impacted the world at large, particularly the business world. Massive amounts of data are being gathered and stored, and technology has been developed to transform data into useable information for better decision making. It is now possible to apply advanced analytical methods to business matters that were not possible two decades ago. Business analytics refers to skills and technologies that enable end-s to explore current and past business performance to make better decisions. Business analytics allows business-end s-to work with the data and information in a data warehouse by using various tools and techniques. The tools and techniques that are available to end s are reports and queries, advanced analytics, and data mining. With reports and queries end s are able to generate various adhoc reports, and build queries that allow them to drill down to details. Advanced analytics includes financial, statistical, and mathematical tools used to analyze information and data. With data mining end s are able to search for information in the data warehouse using predictive analytics or statistics (Lim, Chen, & Chen, 2013).
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Interface interface refers to parts of a computer that the end- see, hear, touch, or talk to. Overall, the interface allows communication between the computer and the end-. With the business intelligence system, end s are able to utilize dashboards to view performance indicators, trends, and exceptions. They are able to integrate information from business units in different areas or locations. With the dashboard, end s are able view graphs of actual performance compared to metrics to see the health of the company (Isik, Jones, & Sidorova, 2011). Rationale for Business Intelligence There are numerous reasons why businesses employ business intelligence. Four of the most common reasons why businesses implement business intelligence are to inform, engage, align, and optimize value. Businesses need information that is readily available for decision making, growing revenue, predicting outcomes, and remaining competitive (Ranjan, 2008). Inform Information is one of the most important assets of a business. With advanced technology, access to information is crucial due to the growth of the internet, consumer sophistication and needs, and competition. Reliable and accurate information is also needed for understanding, operating, and increasing business performance. Business intelligence delivers the much needed information through reports that can be customized, dashboards, maps, charts, and graphics. Thus reliable and accurate information is delivered to the right person at the time it is needed (Jones, Ramakrishnan, & Sidorova, 2012).
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Engage Delivering relevant information timely is important, but the key to receiving relevant information promptly are the s of the information. End-s must be engaged in exploring, analyzing and using the information; they must know what to look for, where to obtain the information, and understand the strategic implications of the information. Business intelligence gives s the ability to analyze situations immediately and consider possible outcomes (Isik, Jones, & Sidorova, 2011). Align The overall goal of business intelligence is to help organizations implement a better decision system. The decision system should align tactical and strategic goals, and combine business processes across organizational boundaries. This requires alignment of executive management with functional departments (Isik, Jones, & Sidorova, 2011). Optimize A business intelligence system should be constructed to address both current and future requirements of the organization. With the right architecture, the solution can evolve with the needs of the organization, without placing extra burden on IT departments and additional costs (Herring, 1988). Business Intelligence Implementation Before business intelligence can be implemented five important areas-solution requirements, organizational structure and executive sponsorship, project scope and risk tolerance, information technology capability, and source system-must be addressed. These issues must be addressed in the planning process of project. Once all areas have been addressed,
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the best way to implement the project is explored. Finally, the areas are consolidated to align with the strategy of the organization and implementation (Zangaglia, 2006). Solution Requirements Information gathering is based on business objectives and measures important to the entire organization; this includes the company, business units, departments, and functional areas. These measures are taken to ensure that the technology is in line with the requirements of the project and risks are mitigated (Jones, Ramakrishnan, & Sidorova, 2012). Sponsorship and Organizational Structure Addressing this requirement is very important because of the overall impact to the organization. Executive sponsorship is important due to cash flow and budgets; and of the project from the top down. Other levels of management and employees are apt to the project also. The IT function is also important to the success of the project due to IT capabilities and decision making-centralized or decentralized (Jones, Ramakrishnan, & Sidorova, 2012). Project Scope and Risk The scope of the business intelligence project can be limited due to budget restraints. And as shown in the “solutions requirements” section, it is important and necessary to plan for success. Planning concerns the scope of the project-duration, budget, risk, and organizational participation. If the solution requirements are not adequate, there is the risk of not meeting the needs of the business and the scope of the project; and risks in deg, implementing, and maintaining the business intelligence system (Zangaglia, 2006). Information Technology Capability The staffing requirements for building and maintaining a BI system must be considered by the organization. Because the IT staff will handle many of the roles in implementing the BI
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system, it is necessary for the organization to ensure that their IT staff is equipped to handle the job; and that training is available if necessary. Consistent and accurate information from the BI system will be used to make critical decisions; therefore, the BI system must be reliable and dependable (Negash, 2004). Source System Implementation of the BI system is impacted by the number, size, and types of source systems that will be integrated. The more data sources to be integrated the more complex data standardization, extraction, conformance, and transformation. Consideration is also given to the various file formats of the source systems. It is detrimental for source systems to be addressed in the “solution requirements” section and planned for accordingly (Negash, 2004). Business Intelligence Objectives The objectives in implementing BI are to provide a new approach to data management, presentation, and analytics. Business intelligence will enable AT&T to:
Access and retrieve financial, sales, customer, employee, vendor, distributor, marketing, and functional data from a single source.
Give secure access of relevant data to all levels of management and business units.
Dedicate time to data analysis and decision making to increase revenue growth and retain customers, and employees.
Make pertinent data, reports, and analysis available to end s.
Have access to external factors-tracking customer satisfaction and buying patterns.
Improve internal processes.
Have the tools and information pertinent to job performance.
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Research and explore the relationships among data to extract data and new insights in operating the company.
A business intelligence team will implement and roll out the new system. The team will ensure that data conversion and data warehousing are consistent with the needs of current and future goals of the company. Clean current data and historical data will be stored in data warehousing. For reporting, end s will have access to dashboards, adhoc reports, and queries. End s will have access to data analysis tools. Extensive training will be provided for all end s. Each of these enhancements to data management will increase reporting accuracy and timeliness, allow and enable predictive analysis and data modeling. Decision makers will have readily available information that is accurate and integrated-a single source (Zangaglia, 2006). Implementing business intelligence will enable an organization to collect and effectively use information to improve the value of the company. The new system will give the end s easy access to the information they need and the ability to analyze and share this information with others. BI will provide insights that will help the company make better decisions. It allows scrutiny of business operations to find new opportunities enhancing the company’s competitive advantage; and for eliminating or amending expenses (Ranjan, 2008). There are not many organizations that have embraced the potential that business intelligence offers. When aligned with the strategic goals of the organization, the data retrieved from the business intelligence system optimizes the value of the company and creates an advantage (Paladino & Williams, 2008). Implementing business intelligence will enable an organization to become proactive and enhance the company’s ability to change with the business as external factors-society, economy, environment, and market-change (Ranjan, 2008). Overall, business intelligence will help companies understand their internal capabilities, trends, future
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directions in the markets, technologies, regulatory environment, actions of its competitors and what the actions imply. The business intelligence system allows management to see detailed and current data on all aspects of the business. This information helps them to make decisions based on fact. The system provides real-time reports that identify sales trends, product improvements, customer preferences, and opportunities; and is a valuable asset for negotiations with vendors, suppliers, and distributors. Business intelligence converts data into useful information, and through human analysis, into knowledge. The following tasks are performed by a business intelligence system (Isik, Jones, & Sidorova, 2011)
Creating forecasts based on historical data, current and past performance, and predictions about the future.
Analytics “what if” of the impacts of changes and alternatives.
Queries and adhoc reporting to answer non-routine questions.
Implementing the new business intelligence system will help organizations create better knowledge environments for assessing revenue growth, eliminating and amending expenses to reduce costs, identifying opportunities for innovation, training to increase employee retention, and market share. Business intelligence offers easy creation and consumption of reports, reliable, accurate, and secure delivery of information, and a friendly interface. By using this management technique, an organization will have a single source for information for international and domestic business units. The collaborated information helps organizations understand the company capabilities, performance and position in the market, and customers, and competitors creating a competitive advantage, revenue growth, and sustainability (Negash, 2004).
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Application of Business Intelligence Business intelligence provides useful insight, s decision-making, and drives performance of the organization. Some industries that currently use business intelligence are retail, insurance, banking, finance, telecommunications, manufacturing, restaurants, and healthcare. Hardee’s, Wendy’s, and T.G.I. Friday’s use business intelligence in making decisions of what new products to add to their menus, which products to remove, and which stores to close. Continental Airlines and First American Corporation implemented business intelligence to increase the return on their investments and to improve customer loyalty (Jones, Ramakrishnan, & Sidorova, 2012). Another company, Hess, an oil and gas company uses business intelligence to facilitate collaboration among its global employees. The company uses a tool that integrates digital elevation models, digital satellite imagery, and GPS data of different geographic locations. The tool takes the data and shows end s the areas where the company is considering construction, processing, and oil and export facilities. This technology saves the development department time and money because it eliminates the need for site visits (Nash, 2008). Revenue Growth With the advancement of globalization, organizations have domestic and international business units; utilizing business intelligence provides and improves the timeliness and quality of information for decision making and operations. Business intelligence provides solutions to gather the data necessary for optimal performance. Instead of being dependent on the IT department to run special reports on a monthly basis, end s will be able to run reports whenever the reports are needed with real-time data (Paladino & Williams, 2008).
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Costs Reduction Conducting business internationally is different than conducting business domestically. Each country has its own business and country culture. It is important for companies to understand the norms and culture of the country it does business in and make readily available real time information that will assist with day to day operations, and decision making. With business intelligence, companies will be able to extract data from all data sources. End s at each business unit will have access to the same data to run reports and queries as needed. Cash deficits can be identified early on and can be adjusted to lessen the impact on cash flow. Analysis of inflows and outflows of cash can be readily viewed to see how the company utilizes it resources; and to assess expenses that can be amended or eliminated (Paladino & Williams, 2008). Market Share Consumers have become more sophisticated and their immediate need for services and products are creating new challenges and opportunities for growth. An understanding of consumer or customer preferences is critical to revenue growth and customer satisfaction and retention. With business intelligence, dashboards can be created and used to collect information from other applications or data sources giving a more in depth view of financial, marketing, sales, billing, s receivable, s payable, and other functions within the company. Changes in performance can be identified and rectified (Paladino & Williams, 2008). Innovation Revenue growth is dependent on sales; therefore companies must create value for customers by creating new products and increasing or amending product lines and services. Business intelligence imports internal and external data. Companies will be able to generate
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reports on the usage patterns of customers that can be used to enhance current strategies, and to track consumer buying behavior and trends. The analysis will help the company create new products to meet consumer demands (Zangaglia, 2006). Employee Retention Employee retention is vital to companies because it lowers expenses, helps attract quality new hires, and it enhances productivity and employee morale. High employee turnover increases recruitment and training expenses of the company. Employee retention also boosts the image and brand of the company. Business intelligence will enable employees to share information across departments, and to have information needed to perform jobs and increase productivity (Harison, 2012). Source Selection The sources for the literature review of Business Intelligence were selected based on the following questions: 1. What is business intelligence? 2. Why do organizations implement business intelligence systems? 3. What are the business justifications for business intelligence? 4. What barriers are attributable to organizations’ reluctance to implement business intelligence? 5. What are the requirements for implementation and deployment of business intelligence systems? 6. What are the core components of business intelligence? 7. What are the benefits of business intelligence?
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8. What risks are involved in developing, implementing, and deploying business intelligence? 9. How does business intelligence help with the decision making process? 10. Is globalization ed by business intelligence? These questions, when answered, should allow a deeper understanding of the subject; how it evolved, who uses it, why it is used, and how it is used by organizations. All of these factors will justify why companies implement business intelligence to enhance decision making. Questions for Further Research Several questions of interest sparked by the literature review of business intelligence are: 1. One of the contemporary business management techniques is business intelligence. What is the difference in the business intelligence management technique and the business intelligence system? 2. Will the advent of business intelligence systems, require employees to be have more technical and analytical skills? 3. Because business intelligence systems release employees from dependency on the IT department, will IT jobs be lost or outsourced? 4. How are global organizations affected by real-time information with the difference in time zones? Will what is real-time information for a domestic company today be realtime information for the global business unit today (their today is our tomorrow or vice versus)? 5. Can business intelligence be used with other business management techniques to optimize company value?
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6. What is the relationship of business intelligence, cloud computing, and mobile computing? 7. What is the future outlook for business intelligence? As a result of the review, the above questions will be researched in hopes of finding answers, measured against findings in the literature review information to better understand how business intelligence is used and its future. The literature review on business intelligence was informative and interesting. Conclusion Faster decision cycles, competitive pressures to capture new opportunities, customer sophistication, the continuing need to adjust to an ever changing business environment, and globalization are driving demand for business intelligence and analytics that better decision making. BI systems deliver vital data and provide the raw material for standard and adhoc reporting and analytics (Harison, 2012). Professionals responsible for deg, developing, and deploying business intelligence systems, must make sure that BI, analytics, and data warehousing (DW) systems are aligned with the organization strategy, and are responsive to business needs. The business intelligence systems should also release end-s from being dependent on the IT department. Business intelligence should address and enable effective decision making at operational, tactical, and strategic levels (Isik, Jones, & Sidorova, 2011). Data is an integral element of business intelligence of which business decisions are based. The best decision cannot be made if organizations do not know the history of the business, where the business currently stands, and where the business is going. Business intelligence can be used to eliminate guesswork. Accurate and reliable information and analysis of data eliminates the
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need to guess, providing companies real time trends or updates which are necessary for predictive analysis (Nandi, 2012). Business intelligence helps business leaders stay informed of the progress toward organizational goals through metrics to measure or benchmark the performance of the business and of employees. With business intelligence (tools), companies are able to see customer buying behavior. This information can be leveraged for innovation; offering products and services that customers need. The information can also be used to eliminate or change products or services that can no longer be sold (Jones, Ramakrishnan, & Sidorova, 2012). By integrating data from all data sources into a single source, relevant data is accessible to all business units, departments, or functional areas. Communications are smoother; processes are simplified, and operational efficiency is improved. Successful implementation and deployment of business intelligence systems are dependent on leadership and managerial , organizational culture or structure, preparation and planning, and IT capabilities. The major value from the use of business intelligence is the ability of end-s to process and analyze existing data in new ways, and gain insight about the current conditions and activities of the company. The system directly s decision making within the organization, and helps to evaluate operations effectiveness (Harison, 2012). Utilization of a Business Intelligence system has helped companies improve their return on investments. Business intelligence has been used to identify cost cutting measures, discover new business opportunities, create a single data source for reporting and predictive analysis, and enabled companies become more innovative by quickly reacting to consumer demands and optimizing pricing. Besides having readily available data, business intelligence helps leverage company negotiations by making it easier to quantify the value of supplier and customer
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relationships. Business intelligence also aids companies in focusing on decisions by optimizing business processes-discovering inefficiencies and making adjustments for improvement. Organizations that identify and make adjustments to inefficient processes are in a much better position to remain competitive (Harison, 2012). The keys to having a successful business intelligence system are preparing and planning for the new system by gathering all relevant information. Relevant information should be based on business objectives or critical success factors of the organization. Executive is necessary so that other management levels and functional departments will also the project. Consideration should be given to the IT department’s staffing capabilities. If staffing is not adequate, training and development of the team should take place, or hiring consultants who are qualified to work in conjunction with the team will be necessary. These measures will help to make sure that the business intelligence system is reliable and dependable. The data retrieved by end-s must be accurate for better decision making. Because of the enormous volume of data from various sources, consideration should be given to the number of sources, size, and type. All of the data has to be standardized, extracted, conformed, and transformed before it can be used by end-s. Other measures that should be considered prior to developing a business intelligence system are to analyze how management executives make decisions; to assess what information is needed by management to make better decisions; the quality of the data, and to assess performance metrics relevant to the business. The successful use of business intelligence has the potential to transform businesses by improving decision making, providing a single data source for reporting, identifying inefficient business processes, cost savings, and new business opportunities (Sastry, 2013).
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19 References
Diagram1: Data Warehouse Overview. (2013). Retrieved from http://www.opensourcebc.com/enterprise-data-management/data-warehouse The diagram of a data warehouse is beneficial in giving the reader a visual to go with the written business intelligence review literature. Harison, E. (2012). Critical success factors of business intelligence system implementations: evidence from the energy sector. International Journal of Enterprise Information Systems, 8(2), 1. doi:http://dx.doi.org.ezproxy.liberty.edu/10.4018/jeis.2012040101 This source is useful in identifying the pros and cons of implementing a business intelligence system. Possible technical, personal, and organizational factors can inhibit the successful development, implementation, and use of the business intelligence system. Herring, J. P. (1988). Building a business intelligence system. Journal of Business Strategy, 9(3), 4-9. Retrieved from http://www.emeraldinsight.com.ezproxy.liberty.edu:2048 This article shades light on the requirements and considerations of constructing a business intelligence system. It also addresses the risks of building an inadequate infrastructure. Isik, O., Jones, M., & Sidorova, A. (2011). Business intelligence (BI) success and the role of BI capabilities. Intelligent Systems in ing, Finance & Management, 18(4), 161-176. doi:10.1002/isaf.329 This resource focuses on one of the main reasons for failure of the business intelligence system. It addresses the critical success factors that define the success of the project and offers findings of successful applications of business intelligence.
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Jones, M., Ramakrishnan, T., & Sidorova, A. (2012). Factors influencing business intelligence (BI) data collection strategies: An empirical investigation. Decision Systems, 52(2), 486-496. Retrieved from http://sciencedirect.com/science/article/pii/S0167923611001722 There are many internal and external factors that influence the purpose of an organization’s selection of business intelligence and how it is developed to fit the strategic goals of the company. This resource will help in understanding business intelligence selection, and how data is collected, retrieved, and used in decision making, reporting, and communication. Lim, E., Chen, G., & Chen, H. (2013). Business intelligence and analytics: Research directions. ACM Transactions on Management Information Systems (TMIS), 3(4). doi:10.1145/2407740.2407741 The majority of the literature for business intelligence states the current status of business intelligence. This resource looks to the future to show how business intelligence will answer the needs of enterprises, computing industry, and the research community. Nandi, V. T. (2012). Maintaining database: Business intelligence tool for competitive advantage. Business Intelligence Journal, 5(2), 352-357. This resource is helpful in giving information to maintain the business intelligence system after implementation. The business intelligence system must be accurate, reliable, and flexible. It should be constructed so that the costs of updates and new construction of components are minimized. Nash, K. (2008). Gas prices: How oil companies use business intelligence to maximize profits. CIO. Retrieved from
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http://www.cio.com/article/375365/Gas_Prices_How_Oil_Companies_Use_Business_Int elligence_to_Maximize_Profits The literature from this resource profiles how oil companies use business intelligence, how long the oil companies have been using business intelligence, and the success of business intelligence for oil companies. This resource helps to confirm the preparations and considerations that must be addressed in order for a company to successfully deploy and use business intelligence. Negash, S. (2004). Business intelligence. Communications of the Association for Information Systems, 13(1), 177-195. Retrieved from http://aisel.aisnet.org/cais/col13/iss1/15 This resource is helpful in understanding the objective-to improve the timeliness and quality of inputs for decision making-of business intelligence. Data is the key ingredient for decision making and must be accurate and reliable for ability. Paladino, B., & Williams, N. (2008). Moving strategy forward: Merging the balanced scorecard and business intelligence. Business Performance Management Magazine, 6(2), 12-17. Retrieved from http://search.proquest.com/docview/218349922?id=12085 This resource shows how business intelligence can be used in conjunction with the balanced scorecard management technique for trend analysis, predictive analytics, customr data integration, scorecards, and data mining for better performance optimization. Ranjan, J. (2008). Business justification with business intelligence. Vine, 38(4), 461-475. doi:10.1108/03055720810917714 This resource is important in understanding the various business environment changes which impacts justification of businesses turning to business intelligence.
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Utilizing it as a means for improved decisions making, predictive analytics, and reporting for continuous growth, sustainability, and competitive advantage. Sastry, H. (2013). Implementing a successful business intelligence framework for enterprises. Journal of Global Research in Computer Science, 4(3), 55-59. Retrieved from http://www/jgrcs.info/index.php/jgrcs/article/view/619 This resource is useful in assessing the various tasks that are necessary in deg and deploying business intelligence, requirements and risks. Zangaglia, P. (2006). Business intelligence deployment strategies: A pragmatic pattern-based appoach. Business Intelligence Journal, 11(3), 52-63. Retrieved from http://search.proquest.com/docview/222624782?id=12085 This resource is helpful in understanding that business intelligence is not a one size fit all application. Guidelines for developing and deploying the business intelligence system are based on specific organizational constraints. Evaluating issues and constraints are important for the planning process of the project.
1
BUSINESS INTELLIGENCE
2 Abstract
The business environment is constantly changing and organizations need reliable, accurate, and effective business information to meet consumer’s needs for growth and sustainability. Business intelligence is a method employed by companies to assist in analyzing and presenting data for more informed decision making. The term business intelligence is relatively new, but the system evolves from decision systems (DSS), executive information systems (EIS), and management information systems (MIS) over a period of forty years. Business intelligence refers to applications and technologies for consolidating, analyzing, and providing access to vast amounts of data to help s make better operational and strategic decisions. A business intelligence system will help facilitate better business decisions and improve business performance optimizing value for the organization.
BUSINESS INTELLIGENCE
3 Business Intelligence
With the advancement of technology, consumers have become more sophisticated. The expectations of consumers’ needs for service and products are creating new challenges and growth opportunities for companies. The business environment is constantly changing and organizations need reliable, accurate, and effective business information to meet consumer’s needs for growth and sustainability. Business intelligence is one method employed by companies to assist in analyzing and presenting data for more informed decision making. What is Business Intelligence? The term business intelligence is relatively new, but the system evolves from decision systems (DSS), executive information systems (EIS), and management information systems (MIS) over a period of forty years (Negash, 2004). Business intelligence refers to applications and technologies for consolidating, analyzing, and providing access to vast amounts of data to help s make better operational and strategic decisions. Business intelligence is a computer-based system that combines data gathering, data storage, and knowledge management with analytical tools to make complex internal information and competitive information readily available to planners and decision makers. A business intelligence system will help facilitate better business decisions and improve business performance optimizing value for the organization (Paladino & Williams, 2008). Being data driven, the technology combines data gathering, data storing, with analysis to provide input in the form of reports. The reports are used for decision making, identification of new opportunities, estimating and predicting, and operational inefficiencies. Typical uses for business intelligence are financial budgeting, planning and forecasting, sales and marketing, performance management, service and , risk analysis, E-Commerce, predictive monitoring, cost reduction. The essential components of
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business intelligence are real-time data warehousing, business analytics, and interface (Negash, 2004). Data Warehousing Data warehousing is the heart of the business intelligence system. The data warehouse holds data that has been extracted from operational systems and made available as historical information for ad-hoc queries and reports. Within the data warehouse relevant information (data) is clustered together for easier access, and grouped according to time periods. Once the data is placed in the data warehouse, it is not updated; the data remains as historical records. Included in the data warehouse are organized and summarized historical data and current data. Combined, this information provides real-time decision . The data warehouse handles the integration of data from all data sources. The following diagram illustrates the process of extracting, transforming, and loading data from other data sources to the data warehouse for reporting and analysis (Sastry, 2013).
(Diagram1: Data Warehouse Overview, 2013)
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End s generate reports and create queries to retrieve information from the data warehouse. (Zangaglia, 2006). The benefits of the data warehouse are:
Improved end- access to relevant data
Increased data consistency
Lower computing costs/increased productivity
Single source combining data from separate sources
Infrastructure s changes in computer systems and business structures
End-s can perform ah-hoc queries and reports without impacting the performance of operational systems
Business Analytics Technological advances have impacted the world at large, particularly the business world. Massive amounts of data are being gathered and stored, and technology has been developed to transform data into useable information for better decision making. It is now possible to apply advanced analytical methods to business matters that were not possible two decades ago. Business analytics refers to skills and technologies that enable end-s to explore current and past business performance to make better decisions. Business analytics allows business-end s-to work with the data and information in a data warehouse by using various tools and techniques. The tools and techniques that are available to end s are reports and queries, advanced analytics, and data mining. With reports and queries end s are able to generate various adhoc reports, and build queries that allow them to drill down to details. Advanced analytics includes financial, statistical, and mathematical tools used to analyze information and data. With data mining end s are able to search for information in the data warehouse using predictive analytics or statistics (Lim, Chen, & Chen, 2013).
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Interface interface refers to parts of a computer that the end- see, hear, touch, or talk to. Overall, the interface allows communication between the computer and the end-. With the business intelligence system, end s are able to utilize dashboards to view performance indicators, trends, and exceptions. They are able to integrate information from business units in different areas or locations. With the dashboard, end s are able view graphs of actual performance compared to metrics to see the health of the company (Isik, Jones, & Sidorova, 2011). Rationale for Business Intelligence There are numerous reasons why businesses employ business intelligence. Four of the most common reasons why businesses implement business intelligence are to inform, engage, align, and optimize value. Businesses need information that is readily available for decision making, growing revenue, predicting outcomes, and remaining competitive (Ranjan, 2008). Inform Information is one of the most important assets of a business. With advanced technology, access to information is crucial due to the growth of the internet, consumer sophistication and needs, and competition. Reliable and accurate information is also needed for understanding, operating, and increasing business performance. Business intelligence delivers the much needed information through reports that can be customized, dashboards, maps, charts, and graphics. Thus reliable and accurate information is delivered to the right person at the time it is needed (Jones, Ramakrishnan, & Sidorova, 2012).
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Engage Delivering relevant information timely is important, but the key to receiving relevant information promptly are the s of the information. End-s must be engaged in exploring, analyzing and using the information; they must know what to look for, where to obtain the information, and understand the strategic implications of the information. Business intelligence gives s the ability to analyze situations immediately and consider possible outcomes (Isik, Jones, & Sidorova, 2011). Align The overall goal of business intelligence is to help organizations implement a better decision system. The decision system should align tactical and strategic goals, and combine business processes across organizational boundaries. This requires alignment of executive management with functional departments (Isik, Jones, & Sidorova, 2011). Optimize A business intelligence system should be constructed to address both current and future requirements of the organization. With the right architecture, the solution can evolve with the needs of the organization, without placing extra burden on IT departments and additional costs (Herring, 1988). Business Intelligence Implementation Before business intelligence can be implemented five important areas-solution requirements, organizational structure and executive sponsorship, project scope and risk tolerance, information technology capability, and source system-must be addressed. These issues must be addressed in the planning process of project. Once all areas have been addressed,
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the best way to implement the project is explored. Finally, the areas are consolidated to align with the strategy of the organization and implementation (Zangaglia, 2006). Solution Requirements Information gathering is based on business objectives and measures important to the entire organization; this includes the company, business units, departments, and functional areas. These measures are taken to ensure that the technology is in line with the requirements of the project and risks are mitigated (Jones, Ramakrishnan, & Sidorova, 2012). Sponsorship and Organizational Structure Addressing this requirement is very important because of the overall impact to the organization. Executive sponsorship is important due to cash flow and budgets; and of the project from the top down. Other levels of management and employees are apt to the project also. The IT function is also important to the success of the project due to IT capabilities and decision making-centralized or decentralized (Jones, Ramakrishnan, & Sidorova, 2012). Project Scope and Risk The scope of the business intelligence project can be limited due to budget restraints. And as shown in the “solutions requirements” section, it is important and necessary to plan for success. Planning concerns the scope of the project-duration, budget, risk, and organizational participation. If the solution requirements are not adequate, there is the risk of not meeting the needs of the business and the scope of the project; and risks in deg, implementing, and maintaining the business intelligence system (Zangaglia, 2006). Information Technology Capability The staffing requirements for building and maintaining a BI system must be considered by the organization. Because the IT staff will handle many of the roles in implementing the BI
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system, it is necessary for the organization to ensure that their IT staff is equipped to handle the job; and that training is available if necessary. Consistent and accurate information from the BI system will be used to make critical decisions; therefore, the BI system must be reliable and dependable (Negash, 2004). Source System Implementation of the BI system is impacted by the number, size, and types of source systems that will be integrated. The more data sources to be integrated the more complex data standardization, extraction, conformance, and transformation. Consideration is also given to the various file formats of the source systems. It is detrimental for source systems to be addressed in the “solution requirements” section and planned for accordingly (Negash, 2004). Business Intelligence Objectives The objectives in implementing BI are to provide a new approach to data management, presentation, and analytics. Business intelligence will enable AT&T to:
Access and retrieve financial, sales, customer, employee, vendor, distributor, marketing, and functional data from a single source.
Give secure access of relevant data to all levels of management and business units.
Dedicate time to data analysis and decision making to increase revenue growth and retain customers, and employees.
Make pertinent data, reports, and analysis available to end s.
Have access to external factors-tracking customer satisfaction and buying patterns.
Improve internal processes.
Have the tools and information pertinent to job performance.
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Research and explore the relationships among data to extract data and new insights in operating the company.
A business intelligence team will implement and roll out the new system. The team will ensure that data conversion and data warehousing are consistent with the needs of current and future goals of the company. Clean current data and historical data will be stored in data warehousing. For reporting, end s will have access to dashboards, adhoc reports, and queries. End s will have access to data analysis tools. Extensive training will be provided for all end s. Each of these enhancements to data management will increase reporting accuracy and timeliness, allow and enable predictive analysis and data modeling. Decision makers will have readily available information that is accurate and integrated-a single source (Zangaglia, 2006). Implementing business intelligence will enable an organization to collect and effectively use information to improve the value of the company. The new system will give the end s easy access to the information they need and the ability to analyze and share this information with others. BI will provide insights that will help the company make better decisions. It allows scrutiny of business operations to find new opportunities enhancing the company’s competitive advantage; and for eliminating or amending expenses (Ranjan, 2008). There are not many organizations that have embraced the potential that business intelligence offers. When aligned with the strategic goals of the organization, the data retrieved from the business intelligence system optimizes the value of the company and creates an advantage (Paladino & Williams, 2008). Implementing business intelligence will enable an organization to become proactive and enhance the company’s ability to change with the business as external factors-society, economy, environment, and market-change (Ranjan, 2008). Overall, business intelligence will help companies understand their internal capabilities, trends, future
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directions in the markets, technologies, regulatory environment, actions of its competitors and what the actions imply. The business intelligence system allows management to see detailed and current data on all aspects of the business. This information helps them to make decisions based on fact. The system provides real-time reports that identify sales trends, product improvements, customer preferences, and opportunities; and is a valuable asset for negotiations with vendors, suppliers, and distributors. Business intelligence converts data into useful information, and through human analysis, into knowledge. The following tasks are performed by a business intelligence system (Isik, Jones, & Sidorova, 2011)
Creating forecasts based on historical data, current and past performance, and predictions about the future.
Analytics “what if” of the impacts of changes and alternatives.
Queries and adhoc reporting to answer non-routine questions.
Implementing the new business intelligence system will help organizations create better knowledge environments for assessing revenue growth, eliminating and amending expenses to reduce costs, identifying opportunities for innovation, training to increase employee retention, and market share. Business intelligence offers easy creation and consumption of reports, reliable, accurate, and secure delivery of information, and a friendly interface. By using this management technique, an organization will have a single source for information for international and domestic business units. The collaborated information helps organizations understand the company capabilities, performance and position in the market, and customers, and competitors creating a competitive advantage, revenue growth, and sustainability (Negash, 2004).
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Application of Business Intelligence Business intelligence provides useful insight, s decision-making, and drives performance of the organization. Some industries that currently use business intelligence are retail, insurance, banking, finance, telecommunications, manufacturing, restaurants, and healthcare. Hardee’s, Wendy’s, and T.G.I. Friday’s use business intelligence in making decisions of what new products to add to their menus, which products to remove, and which stores to close. Continental Airlines and First American Corporation implemented business intelligence to increase the return on their investments and to improve customer loyalty (Jones, Ramakrishnan, & Sidorova, 2012). Another company, Hess, an oil and gas company uses business intelligence to facilitate collaboration among its global employees. The company uses a tool that integrates digital elevation models, digital satellite imagery, and GPS data of different geographic locations. The tool takes the data and shows end s the areas where the company is considering construction, processing, and oil and export facilities. This technology saves the development department time and money because it eliminates the need for site visits (Nash, 2008). Revenue Growth With the advancement of globalization, organizations have domestic and international business units; utilizing business intelligence provides and improves the timeliness and quality of information for decision making and operations. Business intelligence provides solutions to gather the data necessary for optimal performance. Instead of being dependent on the IT department to run special reports on a monthly basis, end s will be able to run reports whenever the reports are needed with real-time data (Paladino & Williams, 2008).
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Costs Reduction Conducting business internationally is different than conducting business domestically. Each country has its own business and country culture. It is important for companies to understand the norms and culture of the country it does business in and make readily available real time information that will assist with day to day operations, and decision making. With business intelligence, companies will be able to extract data from all data sources. End s at each business unit will have access to the same data to run reports and queries as needed. Cash deficits can be identified early on and can be adjusted to lessen the impact on cash flow. Analysis of inflows and outflows of cash can be readily viewed to see how the company utilizes it resources; and to assess expenses that can be amended or eliminated (Paladino & Williams, 2008). Market Share Consumers have become more sophisticated and their immediate need for services and products are creating new challenges and opportunities for growth. An understanding of consumer or customer preferences is critical to revenue growth and customer satisfaction and retention. With business intelligence, dashboards can be created and used to collect information from other applications or data sources giving a more in depth view of financial, marketing, sales, billing, s receivable, s payable, and other functions within the company. Changes in performance can be identified and rectified (Paladino & Williams, 2008). Innovation Revenue growth is dependent on sales; therefore companies must create value for customers by creating new products and increasing or amending product lines and services. Business intelligence imports internal and external data. Companies will be able to generate
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reports on the usage patterns of customers that can be used to enhance current strategies, and to track consumer buying behavior and trends. The analysis will help the company create new products to meet consumer demands (Zangaglia, 2006). Employee Retention Employee retention is vital to companies because it lowers expenses, helps attract quality new hires, and it enhances productivity and employee morale. High employee turnover increases recruitment and training expenses of the company. Employee retention also boosts the image and brand of the company. Business intelligence will enable employees to share information across departments, and to have information needed to perform jobs and increase productivity (Harison, 2012). Source Selection The sources for the literature review of Business Intelligence were selected based on the following questions: 1. What is business intelligence? 2. Why do organizations implement business intelligence systems? 3. What are the business justifications for business intelligence? 4. What barriers are attributable to organizations’ reluctance to implement business intelligence? 5. What are the requirements for implementation and deployment of business intelligence systems? 6. What are the core components of business intelligence? 7. What are the benefits of business intelligence?
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8. What risks are involved in developing, implementing, and deploying business intelligence? 9. How does business intelligence help with the decision making process? 10. Is globalization ed by business intelligence? These questions, when answered, should allow a deeper understanding of the subject; how it evolved, who uses it, why it is used, and how it is used by organizations. All of these factors will justify why companies implement business intelligence to enhance decision making. Questions for Further Research Several questions of interest sparked by the literature review of business intelligence are: 1. One of the contemporary business management techniques is business intelligence. What is the difference in the business intelligence management technique and the business intelligence system? 2. Will the advent of business intelligence systems, require employees to be have more technical and analytical skills? 3. Because business intelligence systems release employees from dependency on the IT department, will IT jobs be lost or outsourced? 4. How are global organizations affected by real-time information with the difference in time zones? Will what is real-time information for a domestic company today be realtime information for the global business unit today (their today is our tomorrow or vice versus)? 5. Can business intelligence be used with other business management techniques to optimize company value?
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6. What is the relationship of business intelligence, cloud computing, and mobile computing? 7. What is the future outlook for business intelligence? As a result of the review, the above questions will be researched in hopes of finding answers, measured against findings in the literature review information to better understand how business intelligence is used and its future. The literature review on business intelligence was informative and interesting. Conclusion Faster decision cycles, competitive pressures to capture new opportunities, customer sophistication, the continuing need to adjust to an ever changing business environment, and globalization are driving demand for business intelligence and analytics that better decision making. BI systems deliver vital data and provide the raw material for standard and adhoc reporting and analytics (Harison, 2012). Professionals responsible for deg, developing, and deploying business intelligence systems, must make sure that BI, analytics, and data warehousing (DW) systems are aligned with the organization strategy, and are responsive to business needs. The business intelligence systems should also release end-s from being dependent on the IT department. Business intelligence should address and enable effective decision making at operational, tactical, and strategic levels (Isik, Jones, & Sidorova, 2011). Data is an integral element of business intelligence of which business decisions are based. The best decision cannot be made if organizations do not know the history of the business, where the business currently stands, and where the business is going. Business intelligence can be used to eliminate guesswork. Accurate and reliable information and analysis of data eliminates the
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need to guess, providing companies real time trends or updates which are necessary for predictive analysis (Nandi, 2012). Business intelligence helps business leaders stay informed of the progress toward organizational goals through metrics to measure or benchmark the performance of the business and of employees. With business intelligence (tools), companies are able to see customer buying behavior. This information can be leveraged for innovation; offering products and services that customers need. The information can also be used to eliminate or change products or services that can no longer be sold (Jones, Ramakrishnan, & Sidorova, 2012). By integrating data from all data sources into a single source, relevant data is accessible to all business units, departments, or functional areas. Communications are smoother; processes are simplified, and operational efficiency is improved. Successful implementation and deployment of business intelligence systems are dependent on leadership and managerial , organizational culture or structure, preparation and planning, and IT capabilities. The major value from the use of business intelligence is the ability of end-s to process and analyze existing data in new ways, and gain insight about the current conditions and activities of the company. The system directly s decision making within the organization, and helps to evaluate operations effectiveness (Harison, 2012). Utilization of a Business Intelligence system has helped companies improve their return on investments. Business intelligence has been used to identify cost cutting measures, discover new business opportunities, create a single data source for reporting and predictive analysis, and enabled companies become more innovative by quickly reacting to consumer demands and optimizing pricing. Besides having readily available data, business intelligence helps leverage company negotiations by making it easier to quantify the value of supplier and customer
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relationships. Business intelligence also aids companies in focusing on decisions by optimizing business processes-discovering inefficiencies and making adjustments for improvement. Organizations that identify and make adjustments to inefficient processes are in a much better position to remain competitive (Harison, 2012). The keys to having a successful business intelligence system are preparing and planning for the new system by gathering all relevant information. Relevant information should be based on business objectives or critical success factors of the organization. Executive is necessary so that other management levels and functional departments will also the project. Consideration should be given to the IT department’s staffing capabilities. If staffing is not adequate, training and development of the team should take place, or hiring consultants who are qualified to work in conjunction with the team will be necessary. These measures will help to make sure that the business intelligence system is reliable and dependable. The data retrieved by end-s must be accurate for better decision making. Because of the enormous volume of data from various sources, consideration should be given to the number of sources, size, and type. All of the data has to be standardized, extracted, conformed, and transformed before it can be used by end-s. Other measures that should be considered prior to developing a business intelligence system are to analyze how management executives make decisions; to assess what information is needed by management to make better decisions; the quality of the data, and to assess performance metrics relevant to the business. The successful use of business intelligence has the potential to transform businesses by improving decision making, providing a single data source for reporting, identifying inefficient business processes, cost savings, and new business opportunities (Sastry, 2013).
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Diagram1: Data Warehouse Overview. (2013). Retrieved from http://www.opensourcebc.com/enterprise-data-management/data-warehouse The diagram of a data warehouse is beneficial in giving the reader a visual to go with the written business intelligence review literature. Harison, E. (2012). Critical success factors of business intelligence system implementations: evidence from the energy sector. International Journal of Enterprise Information Systems, 8(2), 1. doi:http://dx.doi.org.ezproxy.liberty.edu/10.4018/jeis.2012040101 This source is useful in identifying the pros and cons of implementing a business intelligence system. Possible technical, personal, and organizational factors can inhibit the successful development, implementation, and use of the business intelligence system. Herring, J. P. (1988). Building a business intelligence system. Journal of Business Strategy, 9(3), 4-9. Retrieved from http://www.emeraldinsight.com.ezproxy.liberty.edu:2048 This article shades light on the requirements and considerations of constructing a business intelligence system. It also addresses the risks of building an inadequate infrastructure. Isik, O., Jones, M., & Sidorova, A. (2011). Business intelligence (BI) success and the role of BI capabilities. Intelligent Systems in ing, Finance & Management, 18(4), 161-176. doi:10.1002/isaf.329 This resource focuses on one of the main reasons for failure of the business intelligence system. It addresses the critical success factors that define the success of the project and offers findings of successful applications of business intelligence.
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Jones, M., Ramakrishnan, T., & Sidorova, A. (2012). Factors influencing business intelligence (BI) data collection strategies: An empirical investigation. Decision Systems, 52(2), 486-496. Retrieved from http://sciencedirect.com/science/article/pii/S0167923611001722 There are many internal and external factors that influence the purpose of an organization’s selection of business intelligence and how it is developed to fit the strategic goals of the company. This resource will help in understanding business intelligence selection, and how data is collected, retrieved, and used in decision making, reporting, and communication. Lim, E., Chen, G., & Chen, H. (2013). Business intelligence and analytics: Research directions. ACM Transactions on Management Information Systems (TMIS), 3(4). doi:10.1145/2407740.2407741 The majority of the literature for business intelligence states the current status of business intelligence. This resource looks to the future to show how business intelligence will answer the needs of enterprises, computing industry, and the research community. Nandi, V. T. (2012). Maintaining database: Business intelligence tool for competitive advantage. Business Intelligence Journal, 5(2), 352-357. This resource is helpful in giving information to maintain the business intelligence system after implementation. The business intelligence system must be accurate, reliable, and flexible. It should be constructed so that the costs of updates and new construction of components are minimized. Nash, K. (2008). Gas prices: How oil companies use business intelligence to maximize profits. CIO. Retrieved from
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http://www.cio.com/article/375365/Gas_Prices_How_Oil_Companies_Use_Business_Int elligence_to_Maximize_Profits The literature from this resource profiles how oil companies use business intelligence, how long the oil companies have been using business intelligence, and the success of business intelligence for oil companies. This resource helps to confirm the preparations and considerations that must be addressed in order for a company to successfully deploy and use business intelligence. Negash, S. (2004). Business intelligence. Communications of the Association for Information Systems, 13(1), 177-195. Retrieved from http://aisel.aisnet.org/cais/col13/iss1/15 This resource is helpful in understanding the objective-to improve the timeliness and quality of inputs for decision making-of business intelligence. Data is the key ingredient for decision making and must be accurate and reliable for ability. Paladino, B., & Williams, N. (2008). Moving strategy forward: Merging the balanced scorecard and business intelligence. Business Performance Management Magazine, 6(2), 12-17. Retrieved from http://search.proquest.com/docview/218349922?id=12085 This resource shows how business intelligence can be used in conjunction with the balanced scorecard management technique for trend analysis, predictive analytics, customr data integration, scorecards, and data mining for better performance optimization. Ranjan, J. (2008). Business justification with business intelligence. Vine, 38(4), 461-475. doi:10.1108/03055720810917714 This resource is important in understanding the various business environment changes which impacts justification of businesses turning to business intelligence.
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Utilizing it as a means for improved decisions making, predictive analytics, and reporting for continuous growth, sustainability, and competitive advantage. Sastry, H. (2013). Implementing a successful business intelligence framework for enterprises. Journal of Global Research in Computer Science, 4(3), 55-59. Retrieved from http://www/jgrcs.info/index.php/jgrcs/article/view/619 This resource is useful in assessing the various tasks that are necessary in deg and deploying business intelligence, requirements and risks. Zangaglia, P. (2006). Business intelligence deployment strategies: A pragmatic pattern-based appoach. Business Intelligence Journal, 11(3), 52-63. Retrieved from http://search.proquest.com/docview/222624782?id=12085 This resource is helpful in understanding that business intelligence is not a one size fit all application. Guidelines for developing and deploying the business intelligence system are based on specific organizational constraints. Evaluating issues and constraints are important for the planning process of the project.
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