BUSINESS INTELLIGENCE

Any information that pertains to the history, current status or future projections of a business
organization (Wiktionary).
Any information that can be of strategic use to an organization.
Constituents of BI
Business intelligence (BI) uses knowledge management, data warehouse, data mining and
business analysis to identify, track and improve key processes and data, as well as identify and
monitor trends in corporate, competitor and market performance.(
http://www.bettermanagement.com/topic/default.aspx?f=10)
Following the above, we can define business intelligence as information about an organization’s
past performance that is used to help predict the company's future performance. It can reveal
emerging trends from which the company might profit.
We are going to be creating a framework based on the above using knowledge management,
datawarehouse, data mining and business analysis as our inputs and map it to processes and data
as the intermediate.

Literature Review

Opportunity analysis
Intelligence for its own sake is of little business value unless it can provide actionable value. By
this it is meant that opportunity analysis should be the objective we strive for within Business
Intelligence. Opportunity analysis is an intelligence assessment relating directly to the
vulnerabilities and
opportunities of the organisation as they arise from circumstances within the operating
environment. The key element of opportunity analysis is the intelligence production unit's
understanding of the organisation's objectives. Being able to relate to the knowledge on hand and
to interpret that within the context of the organisation's strategic objectives - in effect by pointing
out the opportunities and vulnerabilities that decision-makers and marketing personnel can
exploit to advance the organisation and to improve customer relationships is crucial. The
standard is to provide actionable analysis without prescribing general guidelines. Opportunity
analysis depends upon two fundamental principles.2The first holds that opportunity analysis
starts with the effective tasking by intelligence consumers - in most organisations the consumers
are the users of intelligence. The consumers are responsible for identifying the relevant
intelligence priorities. The second principle postulates that in order to satisfy the needs
of the consumers, the intelligence producers must provide analytical assessments that deliver a
high order of understanding and insight that can support sound decision-making, customer
relationship building and strategy planning. This implies that intelligence adheres to a distinct
process.( )

The Intelligence Process

For analysis to be effective in business it needs to add tangible value to the organisation. This is
usually difficult to measure in any currency and therefore analysis is best measured in some
other form of value in relation to the organisation's persistence and prosperity. This value is
created in the form of Opportunity Analysis. In consulting companies however, business
intelligence must be combined with expertise and knowledge from within the organisation's
centres of excellence to create solutions-based consulting products. One of the most difficult
stages in the intelligence cycle is the analysis process. The challenge lies in the intelligence
producers' ability to weigh information about the external operating
environment and to integrate that information with the internal knowledge of the organisation.
The objective is to identify patterns, trends and tendencies and to formulate a range of scenarios
predicting probable future outcomes and to be able to discern potential opportunities and
barriers against achieving them. With the exception of Daily Intelligence Briefings, Opportunity
Analysis is an intelligence quality that should be incorporated within all analysis efforts and
reflected in intelligence products. ( )

It will be classified into two

Hard BI and Soft BI
Hard BI has to do with those aspect of BI that we can see to include hardware,software, tools
e.t.c and mostly used by IT side of business.While Soft BI has to do with methodologies,
strategies, analysis, knowledge management, datawarehouse e.t.c
Since our focus is not on the Hard BI but Soft Bi, we shall be using it as our basis for input for
the frame work.
Now we have to create a linkage or a relationship between these Soft BI components and BI
itself.
BI and KM
Knowledge is a fluid mix of framed experiences, values, contextual information, and expert
insight that provides a framework for evaluating and incorporating new experiences and
information. It originates and is applied in the minds of knowers. In organisations, it often
becomes embedded not only in documents or repositories but also in organisational routines,
processes, and norms. In addition, Gartner Group defines Knowledge Management as:
"Knowledge Management is a discipline that promotes an integrated approach to identifying,
managing and sharing all of an enterprise's information assets. It is the discipline applied to
manage intellectual capital."
Business Intelligence and Knowledge Management have the same objective – to focus on
improving business performance. The purpose of Knowledge Management is to achieve the
maximum degree of understanding of one's operating environment and relevant circumstances
that can advance or retard progress toward an objective. However, the same rationale applies to
the concept of Business Intelligence. If we agree that Business Intelligence is comprised of
Customer, Competitor and Market Intelligence and that the purpose of conducting Business
Intelligence is to support strategic decision-making, grow the business and monitor the
organisation's competitors, then we recognise that there are definite similarities between
Knowledge Management and Business Intelligence. While both concepts share a common high
level objective, there are some fundamental differences. These differences are to be found in the
manner in which they are applied towards achieving that goal. The value of Business
Intelligence and its product, opportunity analysis, is found in its usefulness as a decision making
tool; the value of Knowledge Management lies in the ability of the organisation to identify,
capture and reuse knowledge and in particular best practices in such a manner that it saves the
organisation time, effort and resources -translated and measured in cost.

KM has been defined in reference to collaboration, content management, organizational

behavioral science, and technologies. KM technologies incorporate those employed to create,
store, retrieve, distribute and analyze structured and unstructured information. Most often,
however, KM technologies are thought of in terms of their ability to help process and organize
textual information and data so as to enhance search capabilities and to garner
meaning and assess relevance so as to help answer questions, realize new opportunities, and
solve current problems. In larger firms, there is a vast aggregation of documents and data,
including business documents, forms, data bases, spreadsheets, e-mail, news and press articles,
technical journals and reports, contracts, and web documents. Knowledge and content
management applications and technologies are used to search, organize and extract value from
these information sources and are the focus of significant research and development activities.
BI has focused on the similar purpose, but from a different vantage point. BI concerns itself with
decision making using data warehousing and online analytical processing techniques (OLAP).
Data warehousing collects relevant data into a repository, where it is organized and validated so
it can serve decision-making objectives. The various stores of the business data are extracted,
transformed and loaded from the transactional systems into the data
warehouse. An important part of this process is data cleansing where variations in data schemas
and data values from disparate transactional systems are resolved. In the data warehouse, a
multidimensional model can then be created which supports flexible drill down and roll-up
analyses (roll-up analyses create progressively higher-level subtotals, moving from right to left
through the list of grouping columns. Finally, it creates a grand total). Tools
from various vendors provide end users with a query and front end to the data warehouse.
Large data warehouses can hold tens of terabytes of data, whereas smaller, problem-specific ones
often hold 10 to 100 gigabytes (Cody et al., 2002). McKnight (2002) has organized KM under
BI. He suggests that this is a good way to think about the relationship between the two. He
argues thatKMis internal-facing BI, sharing the intelligence
among employees about how effectively to performthe variety of functions required to make the
organization go. Hence, knowledge is managed using many BI techniques. Haimila (2001) also
sees KM as the ‘‘helping hand of BI’’. He cites the use of BI by law enforcement agencies as
being a way to maximize their use of collected data, enabling them to make faster and better-
informed decisions because they can drill down into data to see trends, statistics and match
characteristics of related crimes. Marco (2002) contends that a ‘‘true’’ enterprise-wide KM
solution cannot exist without a BI-based meta data repository. In fact, a metadata repository is
the backbone of a KM
solution. That is, the BI meta data repository implements a technical solution that gathers,
retains, analyses, and disseminates corporate ‘‘knowledge’’ to generate a competitive advantage
in the market. This intellectual capital (data, information and knowledge) is both technical and
business-related. Marco says that most magazines that discuss KM fail to mention a meta data
repository. He believes this ‘‘glaring oversight’’ exists because most KM professionals focus on
a limited portion of the KM equation. However, implementers, he asserts, realize that a meta data
repository is the technical solution for KM.
Cook and Cook (2000) note that many people forget that the concepts of KM and BI are both
rooted in pre-software business management theories and practices. They claim that technology
has served to cloud the definitions. Defining the role of technology in KM and BI – rather than
defining technology as KM and BI – is seen by Cook and Cook as a way to clarify their
distinction. Cook and Cook assert that the attraction of BI is that it offers organizations quick and
powerful tools to store, retrieve, model, and analyze large amounts of information about their
operations, and in some cases, information from external sources.

Richard T. Herschel and

Nory E. Jones
Knowledge Management methodologies record and disseminate both explicit and tacit process
and performance strategies and actions to identify best practices and innovative techniques and
ideas
BI& Business Analysis

What is Analysis and What are Analytics?

Scanning dictionaries and the Internet for a definition of analysis didn’t provide us with any
useful input to the discussion. Webster’s defines analysis as “The separation of a whole into its
components parts,” certainly not a definition that sheds much light.

More meaningful (but still confusing) results are obtained when prefixing analysis with data or
business. Wikipedia, for examples defines data analysis as “… a process of inspecting, cleaning,
transforming, and modeling data with the goal of highlighting useful information, suggesting
conclusions, and supporting decision making.” On the other hand, business analysis is defined
as: “The discipline of identifying business needs and determining solutions to business problems.
Solutions often include a systems development component, but may also consist of process
improvement or organizational change or strategic planning and policy development.” These two
definitions may explain why the IT and business views of analysis sometimes differ. IT often
defines data analysis as covering the complete information life cycle from cleaning and
transforming source data making it ready for analysis, to analyzing the transformed data and
creating analytics. Business users, on the other hand, view business analysis as a set of
techniques for defining analyses and creating analytics on the transformed data.

Definitions for analytics, metrics, measurements, and indicators offer a confusing set of options.
It is worth noting that analytics is more often defined as “the science of analysis” rather than the
“results of analytical processing.” Given that business intelligence is about providing business
users with intelligence about the business, we offer the following:

“Business analysis is the process of analyzing trusted data with the goal of highlighting useful
information, supporting decision making, suggesting solutions to business problems, and
improving business processes. A business intelligence environment helps organizations and
business users move from manual to automated business analysis. Important results from
business analysis include historical, current and predictive metrics, and indicators of business
performance. These results are often called analytics.”

Business intelligence reporting and monitoring includes ad hoc and standardized reports,
dashboards, triggers and alerts. Business analytics include trend analysis, predictive forecasting,
pattern analysis, optimization, guided decision-making and experiment design

BI&DM

Data mining is the process of extracting hidden knowledge from large volumes of raw data. It
can also be defined as the process of extracting hidden predictive information from large
databases.

Data mining is not an “intelligence” tool or framework. Business intelligence, typically drawn
from an enterprise data warehouse, is used to analyze and uncover information about past
performance on an aggregate level. Data warehousing and business intelligence provide a
method for users to anticipate future trends from analyzing past patterns in organizational data.
Data mining is more intuitive, allowing for increased insight beyond data warehousing. An
implementation of data mining in an organization will serve as a guide to uncovering inherent
trends and tendencies in historical information. It will also allow for statistical predictions,
groupings and classifications of data.

Most companies collect, refine and deduce massive quantities of data. Data mining techniques
can be implemented rapidly on existing software and hardware platforms to enhance the value of
existing information resources, and can be integrated with new products and systems as they
become part of the system. When implemented on high performance client/server or parallel
processing computers, data mining tools can analyze massive databases to deliver answers to
many different types of predictive questions.

Data mining software allows users to analyze large databases to solve business decision-making
problems. Data mining tools predict future trends and behaviors, allowing businesses to make
proactive, knowledge-driven decisions. Data mining tools can answer business questions that
traditionally were too time-consuming to resolve. Data mining is, in some ways, an extension of
statistics, with a few artificial intelligence and machine learning twists thrown in. Like statistics,
data mining is not a business solution, it is just a technology.
Data mining allows users to sift through the enormous amount of information available in data
warehouses; it is from this sifting process that business intelligence gems may be found.

BI&DW

Different people have different definitions for a data warehouse. The most popular definition
came from Bill Inmon, who provided the following:

A data warehouse is a subject-oriented, integrated, time-variant and non-volatile collection of

data in support of management's decision making process.

Subject-Oriented: A data warehouse can be used to analyze a particular subject area. For
example, "sales" can be a particular subject.

Integrated: A data warehouse integrates data from multiple data sources. For example, source A
and source B may have different ways of identifying a product, but in a data warehouse, there
will be only a single way of identifying a product.

Time-Variant: Historical data is kept in a data warehouse. For example, one can retrieve data
from 3 months, 6 months, 12 months, or even older data from a data warehouse. This contrasts
with a transactions system, where often only the most recent data is kept. For example, a
transaction system may hold the most recent address of a customer, where a data warehouse can
hold all addresses associated with a customer.

Non-volatile: Once data is in the data warehouse, it will not change. So, historical data in a data
warehouse should never be altered.

Ralph Kimball provided a more concise definition of a data warehouse:

A data warehouse is a copy of transaction data specifically structured for query and analysis.

This is a functional view of a data warehouse. Kimball did not address how the data warehouse is
built like Inmon did, rather he focused on the functionality of a data warehouse.
(http://www.1keydata.com/datawarehousing/datawarehouse.html)

Data warehousing is a foundational practice that supports enterprise reporting, business

intelligence and decision support. Data warehouses and data marts are created across levels of
sophistication and different philosophical approaches, but typically involve extracting and
transforming data from operational/transactional databases and loading it to a repository for
shared use and analysis.

Larissa Moss: a framework of cross-organizational disciplines and an enterprise architecture for

the construction and management of an integrated pool of operational as well as decision support
applications and databases that provides the business community easy access to their business
data and allows them to make accurate business decisions. One vehicle to deliver business
intelligence is data warehousing; another vehicle is CRM and so on. In other words, data
warehousing is a subcomponent of and a vehicle for delivering business intelligence.

Scott Howard’s Answer: Business intelligence refers to systems and technologies that provide
the business with the means for decision-makers to extract personalized meaningful information
about their business and industry, not typically available from internal systems alone. This
includes advanced decision support tools and back-room systems and databases to support those
tools. The data warehouse is that back-room database. Combine that with the support tools
required to build and maintain the data warehouse, such as data cleansing and extract, transform
and load tools and you have what many call data warehousing.

Think of the data warehouse as the back office and business intelligence as the entire business
including the back office. The business needs the back office on which to function, but the back
office without a business to support, makes no sense.

Chuck Kelley’s Answer: My 30,000-foot level answer – I think that you build a data warehouse
to put a tool on top of it to do business intelligence. So data warehousing is the foundation that
business intelligence is built upon.
Clay Rehm’s Answer: People were performing data warehousing (DW) before it had a name.
The term "data warehousing" stemmed from the terms "decision support" and "management
reporting" many years ago. Business intelligence (BI) sought to encapsulate more processes that
included data warehousing. If you notice, many vendors use the term BI to describe their
services; to show that they provide more services than just data warehousing.

Uses of BI

Business intelligence usage can be categorized into the following categories:

1. Business operations reporting

The most common form of business intelligence is business operations reporting. This includes
the actuals and how the actuals stack up against the goals. This type of business intelligence
often manifests itself in the standard weekly or monthly reports that need to be produced.

2. Forecasting

Many of you have no doubt run into the needs for forecasting, and all of you would agree that
forecasting is both a science and an art. It is an art because one can never be sure what the future
holds. What if competitors decide to spend a large amount of money in advertising? What if the
price of oil shoots up to $80 a barrel? At the same time, it is also a science because one can
extrapolate from historical data, so it's not a total guess.

3. Dashboard

The primary purpose of a dashboard is to convey the information at a glance. For this audience,
there is little, if any, need for drilling down on the data. At the same time, presentation and ease
of use are very important for a dashboard to be useful.

4. Multidimensional analysis

Multidimensional analysis is the "slicing and dicing" of the data. It offers good insight into the
numbers at a more granular level. This requires a solid data warehousing / data mart backend, as
well as business-savvy analysts to get to the necessary data.

5. Finding correlation among different factors

This is diving very deep into business intelligence. Questions asked are like, "How do different
factors correlate to one another?" and "Are there significant time trends that can be
leveraged/anticipated?"

(http://www.1keydata.com/datawarehousing/datawarehouse.html)