BTCOE704 (B): BUSINESS INTELLIGENCE

[Unit 1] Business Intelligence Introduction [6 Hours]

1.1 Definition, History of Business intelligence
Definition of Business Intelligence (BI)
Business intelligence (BI) is the process of gathering, storing, analyzing, and presenting data to improve
business decision-making. It involves using technology and methodologies to transform raw data into
actionable insights that inform strategies and guide actions.
BI encompasses a wide range of activities, including:
• Data collection and integration: Gathering data from various sources, such as internal databases,
external feeds, and customer transactions.
• Data storage and management: Storing and organizing data in a way that is accessible and usable.
• Data analysis and modeling: Applying statistical and analytical techniques to extract meaningful
patterns and trends from the data.
• Data visualization: Presenting the results of the analysis in a clear and concise way, often using
dashboards, charts, and reports.
• Reporting and communication: Sharing the insights gained from the data with stakeholders across
the organization.
Ultimately, the goal of BI is to empower businesses to make data-driven decisions that lead to better outcomes.
History of Business Intelligence
The term "business intelligence" has a long and interesting history. Here are some key milestones:
1865: The phrase "business intelligence" is first used by author Richard Millar Devens to describe how a
banker used information to gain a competitive advantage.
1958: Hans Peter Luhn, an IBM researcher, uses the term in an article, focusing on the "ability to apprehend
the interrelationships of presented facts."
1989: Howard Dresner, a Gartner analyst, proposes "business intelligence" as an umbrella term for methods
to improve business decision-making through data analysis.
1990s: BI tools and technologies start to emerge, allowing for easier data storage, analysis, and visualization.
2000s: BI becomes more mainstream and accessible to smaller businesses. Self-service BI tools and cloud-
based solutions become available.
2010s: The rise of big data and advanced analytics technologies further revolutionizes BI.
Present day: BI is now a critical component of every successful business. It is used in all industries and
departments to inform everything from marketing campaigns to product development to financial decisions.
Key trends shaping the future of BI:
• Increased adoption of artificial intelligence (AI) and machine learning (ML) for deeper insights and
automation.
• Continued growth of cloud-based BI solutions for greater accessibility and scalability.
• Focus on self-service BI tools that empower non-technical users to analyze data.
• Integration of BI with other business applications for a more holistic view of operations.
Overall, the future of BI is bright, with continued innovation and advancements leading to even more powerful
insights and smarter decision-making for businesses of all sizes.
1.2 Leveraging Data and Knowledge for Business intelligence
Leveraging Data and Knowledge for Business Intelligence
In today's data-driven world, businesses that are able to effectively leverage data and knowledge have a
significant competitive advantage. Business intelligence (BI) plays a crucial role in this process by providing
the tools and techniques to collect, analyze, and interpret data, ultimately driving informed decision-making.
Here are some key ways that data and knowledge can be leveraged for effective business intelligence:
1. Data Collection and Management:
• Collecting data from various sources: This includes internal operational data, customer data, market
research, and external data sources.
• Data warehousing and cleansing: Ensuring the data is accurate, complete, and consistent is essential
for reliable analysis.
• Data governance: Establishing policies and procedures for data access, security, and quality control.
2. Data Analysis and Visualization:
• Applying analytical techniques: This may include statistical analysis, machine learning, and data
mining to extract meaningful insights from the data.
• Creating reports and dashboards: Visualizing data through charts, graphs, and maps makes it easier
to identify trends, patterns, and anomalies.
• Real-time analytics: Monitoring data in real-time allows for quick identification of issues and
opportunities.
3. Knowledge Management and Sharing:
• Codifying knowledge and expertise: Capturing and storing valuable knowledge from employees and
experts.
• Creating knowledge bases and wikis: Making knowledge easily accessible to all employees.
• Promoting knowledge sharing and collaboration: Encouraging communication and knowledge
sharing across teams.
4. Decision-Making and Optimization:
• Using data-driven insights to inform strategic decisions: This can include product development,
marketing campaigns, and resource allocation.
• Predicting future trends and outcomes: Data analysis can help predict customer behavior, market
trends, and risks.
• Optimizing business processes: Identifying and implementing improvements based on data analysis.
Benefits of Leveraging Data and Knowledge for Business Intelligence:
• Improved decision-making: Data-driven decisions are more likely to be accurate and effective.
• Increased operational efficiency: Identifying and eliminating inefficiencies can save time and money.
• Enhanced customer experience: Data can be used to personalize interactions and meet customer needs.
• Improved risk management: Identifying and mitigating risks can protect the business from harm.
• Increased innovation: Data can be used to identify new opportunities and develop new products and
services.
Key Technologies for Leveraging Data and Knowledge:
• Big data platforms: These platforms are designed to handle large and complex datasets.
• Cloud computing: Cloud-based BI solutions offer scalability and flexibility.
• Data visualization tools: These tools help to create clear and compelling presentations of data.
• Machine learning: Machine learning algorithms can automate data analysis tasks and identify
patterns that humans might miss.
• Natural language processing (NLP): NLP tools can be used to analyze and extract insights from
textual data.
Challenges and Considerations:
• Data quality: Ensuring data quality is essential for reliable analysis.
• Data security: Protecting sensitive data from unauthorized access is crucial.
• Change management: Implementing BI solutions can require changes to organizational processes
and culture.
• Data literacy: Employees need to be trained on how to use and understand data.
• Data governance: Establishing effective data governance policies and procedures is important.
Conclusion:
Leveraging data and knowledge is essential for businesses in today's competitive environment. By effectively
utilizing BI tools and techniques, businesses can gain valuable insights, make better decisions, and achieve
their strategic goals. However, it's important to be aware of the challenges and considerations involved in
implementing a successful BI program.
1.3 Business intelligence Components
Business intelligence (BI) is a broad term encompassing various technologies, tools, and processes that enable
organizations to transform raw data into actionable insights. These insights can then be used to improve
decision-making, optimize processes, and ultimately drive business success.
Several key components contribute to a comprehensive BI solution. Let's explore some of the most important
ones:
1. Data sources:
• Internal data: This includes data from various internal systems like CRM, ERP, marketing
automation, and financial systems.
• External data: This includes data from market research reports, social media, and industry publications.
• Big data: This refers to large, complex datasets that require specialized tools and technologies for
analysis.
2. Data warehousing and data lakes:
• Data warehouses: These are centralized repositories for storing and managing large volumes of
historical and structured data. They are optimized for querying and analysis.
• Data lakes: These are flexible repositories for storing large volumes of diverse data, including
structured, semi-structured, and unstructured data. They are ideal for exploration and discovery.
3. Data extraction, transformation, and loading (ETL/ELT):
• ETL: This process involves extracting data from various sources, transforming it into a standardized
format, and loading it into the data warehouse or data lake.
• ELT: This process involves loading data into the data lake in its raw format and then performing
transformations as needed.
4. Data analysis tools:
• OLAP (Online Analytical Processing): This technology allows users to analyze multi-dimensional
data, drill down into specific areas of interest, and analyze trends and patterns.
• Data mining: This involves using statistical and machine learning techniques to extract hidden
patterns and insights from large datasets.
• Predictive analytics: This uses historical data and statistical models to predict future trends and events.
5. Visualization tools:
• Dashboards: These provide a real-time overview of key performance indicators (KPIs) and other
critical business metrics, often using charts, graphs, and maps.
• Reports: These provide detailed insights into specific areas of the business, often including tables,
graphs, and text analysis.
• Data storytelling: This involves using data visualizations and narratives to communicate insights and
recommendations in a clear and compelling way.
6. Infrastructure:
• Hardware: This includes servers, storage devices, and network infrastructure needed to support the
BI platform.
• Software: This includes the BI software itself, as well as any additional tools needed for data
integration, analysis, and visualization.
• Cloud computing: Many organizations are turning to cloud-based BI solutions for greater flexibility,
scalability, and cost-efficiency.
7. Governance and security:
• Data governance: This ensures the accuracy, consistency, and security of data throughout its lifecycle.
 • Data security: This protects sensitive data from unauthorized access, use, disclosure, disruption,
modification, or destruction.
8. People and processes:
• Business users: These are the people who use BI tools to access and analyze data to make better
decisions.
• BI professionals: These are the people who design, develop, and maintain the BI platform and ensure
its effective use throughout the organization.
• Business processes: BI tools and insights need to be integrated into existing business processes to
ensure data-driven decision-making becomes a part of the organizational culture.
By effectively utilizing these components, organizations can unlock the full potential of business intelligence
and gain a significant competitive advantage.
1.4 Business Intelligence and Business Analytics
Business Intelligence (BI) and Business Analytics (BA) are often used interchangeably, but there are some
key distinctions between the two. Here's a breakdown:
Business Intelligence (BI):
• Focus: Descriptive and diagnostic.
• Goals: Understand what happened and why.
• Data: Primarily historical and structured.
• Analysis: Primarily descriptive analytics, using dashboards and reports to visualize trends and patterns.
• Tools: Reporting tools, data visualization tools, dashboards.
• Users: Business users, managers, executives.
• Outcomes: Improved operational efficiency, better decision-making based on historical data.
Business Analytics (BA):
• Focus: Predictive and prescriptive.
• Goals: Predict what will happen and recommend what to do.
• Data: May include both historical and real-time data, structured and unstructured data.
• Analysis: Primarily predictive and prescriptive analytics, using machine learning and statistical
models to forecast future trends and identify optimal courses of action.
• Tools: Machine learning algorithms, statistical modeling tools, data mining tools.
• Users: Data analysts, scientists, business stakeholders.
• Outcomes: Increased revenue, reduced costs, improved customer experience, competitive advantage.
Here's a simple analogy:
• Think of BI as a rearview mirror. It helps you see where you've been and understand what happened.
• Think of BA as a GPS. It helps you predict where you're going and suggests the best route to take.
Relationship between BI and BA:
BI and BA are complementary disciplines. BI provides the foundation for BA by collecting and organizing
data. BA then uses this data to generate insights and predictions that can inform business decisions.
Many organizations are now embracing a combined approach, leveraging both BI and BA to gain a
comprehensive understanding of their business and make data-driven decisions.
Additional points:
• BI is often considered a subset of BA.
• BA requires more advanced skills and tools than BI.
• The line between BI and BA can be blurry, and the terms are sometimes used interchangeably.
• The specific focus of BI and BA can vary depending on the organization and its needs.
Ultimately, both BI and BA are valuable tools for businesses of all sizes to gain insights from their data and
make better decisions.
1.4 Business Intelligence Life Cycle
Business Intelligence Life Cycle
The Business Intelligence (BI) life cycle is a continuous process of collecting, storing, analyzing, and
presenting data to gain insights that drive better business decisions. It's an iterative cycle that evolves over
time as organizations adapt to new challenges and opportunities.
Here's a breakdown of the key stages in the BI life cycle:
1. Define Business Requirements:
• Identify business goals and objectives.
• Understand what data is needed to achieve those goals.
• Define key performance indicators (KPIs) to measure success.
2. Design and Build the BI Infrastructure:
• Select the right BI tools and technologies based on business needs.
• Design the data warehouse or data lake.
• Develop ETL/ELT processes to integrate data from various sources.
3. Data Acquisition and Integration:
• Extract data from various sources.
• Transform data into a format suitable for analysis.
• Load data into the data warehouse or data lake.
4. Data Analysis and Modeling:
• Clean and prepare the data for analysis.
• Perform data analysis using various techniques, such as OLAP and data mining.
• Develop predictive models to forecast future trends and events.
5. Data Visualization and Reporting:
• Create dashboards and reports to communicate insights to stakeholders.
• Use data visualization tools to present complex data in a clear and concise way.
• Develop data-driven narratives to explain insights and recommendations.
6. Deploy and Monitor:
• Deploy the BI solution to users.
• Monitor the performance of the BI platform.
• Provide ongoing support and training to users.
7. Feedback and Iteration:
• Gather feedback from users on the effectiveness of the BI solution.
• Use feedback to iterate and improve the BI platform.
• Adapt to changing business needs and requirements.
The BI life cycle is not a linear process. Organizations may need to revisit earlier stages as their needs and
understanding of data evolve. The key is to create a flexible and iterative process that can adapt to change.
Benefits of the Business Intelligence Life Cycle:
• Improved decision-making: By providing data-driven insights, BI can help organizations make better
decisions that are more likely to lead to success.
• Increased efficiency and productivity: BI can help organizations identify areas for improvement and
automate manual processes, leading to increased efficiency and productivity.
• Reduced costs: BI can help organizations identify and reduce costs, such as waste and fraud.
• Improved customer satisfaction: BI can help organizations better understand their customers and
their needs, leading to improved customer satisfaction.
• Enhanced competitive advantage: By using BI to gain insights into their markets and competitors,
organizations can gain a competitive advantage.
Challenges of the Business Intelligence Life Cycle:
 • Data quality: Data quality is essential for obtaining accurate and reliable insights. Organizations need
to implement data governance and quality control procedures.
• Data integration: Integrating data from various sources can be complex and challenging.
Organizations need to have the right tools and expertise in place.
• User adoption: Getting users to adopt and use BI tools effectively can be difficult. Organizations
need to provide training and support to users.
• Cost: Implementing and maintaining a BI solution can be expensive. Organizations need to carefully
consider the costs and benefits involved.
By understanding the business intelligence life cycle and its key stages, organizations can develop a successful
BI strategy that helps them achieve their business goals.
1.5 Business intelligence architectures
A business intelligence (BI) architecture serves as the underlying framework for implementing and leveraging
BI tools and technologies within an organization. It defines the standards, principles, and guidelines for data
management, analytics, and technology, ultimately supporting effective decision-making.
Here are three main types of BI architectures:
1. Traditional Architecture:
• Centralized: Data is stored in a central data warehouse, often a relational database.
• ETL-based: Data is extracted, transformed, and loaded into the data warehouse before being analyzed.
• Batch processing: Data is analyzed and reports are generated at regular intervals.
• Suitable for: Organizations with relatively static data and well-defined reporting needs.
2. Data Lake Architecture:
• Decentralized: Data is stored in its raw format in a data lake, often a scalable storage system like
Hadoop.
• ELT-based: Data is loaded into the data lake first and then transformed as needed for analysis.
• Real-time processing: Data can be analyzed in real-time or near real-time.
• Suitable for: Organizations with large volumes of diverse data and evolving analytics needs.
3. Cloud-based Architecture:
• Hosted in the cloud: BI platforms and data are hosted in a cloud environment, such as AWS, Azure,
or Google Cloud Platform.
• Scalable and flexible: Resources can be easily scaled up or down to meet changing needs.
• Cost-effective: Eliminates the need for significant upfront investment in hardware and software.
• Suitable for: Organizations of all sizes that want a flexible and cost-effective BI solution.
Choosing the Right BI Architecture:
The best BI architecture for your organization depends on several factors, including:
• Data size and complexity: The volume, variety, and velocity of your data will influence the type of
architecture needed.
• Analytics needs: The type of analysis you need to perform (e.g., ad-hoc analysis, complex modeling)
will determine the required processing capabilities.
• Budget and resources: The cost of hardware, software, and personnel will need to be considered.
• IT infrastructure and expertise: Your existing IT infrastructure and team's expertise will influence the
ease of implementing and maintaining a particular architecture.
By carefully considering your specific needs and challenges, you can choose the BI architecture that best
supports your organization's data-driven decision-making journey.
Beyond these three main types, here are some additional architectural considerations:
• Hybrid architectures: Combining elements of different architectures can be beneficial for
organizations with diverse needs.
• Self-service BI: Empowering users to access and analyze data without relying on IT can improve
agility and responsiveness.
 • Data governance and security: Implementing robust data governance and security measures is
essential to ensure data accuracy, privacy, and compliance.
• Integration with other systems: BI systems need to be integrated with other enterprise systems to
provide a holistic view of business performance.
Remember, a successful BI architecture is not static. It needs to evolve and adapt to changing business
priorities and technological advancements. By continuously reviewing and optimizing your architecture, you
can ensure that you are maximizing the value of your BI investment.
1.6 Business intelligence Effective and timely decisions.
Business Intelligence: Effective and Timely Decisions
Business intelligence (BI) empowers organizations to make more effective and timely decisions. By
transforming raw data into actionable insights, BI provides a clear view of past performance, current trends,
and future possibilities.
![Business intelligence concept graphic]
Here's how BI facilitates effective and timely decision-making:
1. Improved Data Visibility and Accessibility:
• BI tools and platforms gather data from various sources, including internal systems, external sources,
and big data repositories.
• This consolidated data makes it readily available and easily accessible to authorized users across the
organization.
• Increased data visibility removes information silos and fosters collaboration, enabling faster and
more informed decisions.
2. Enhanced Data Analysis and Interpretation:
• BI tools provide sophisticated analytics capabilities, including OLAP, data mining, and predictive
analytics.
• These tools help users analyze data from different perspectives, identify hidden patterns and trends,
and make sense of complex information.
• By uncovering deeper insights, BI enables proactive decision-making based on data-driven evidence
rather than intuition or guesswork.
3. Real-time Insights and Monitoring:
• Modern BI platforms offer real-time data dashboards that provide constantly updated insights into
key performance indicators (KPIs).
• This enables proactive monitoring of critical business metrics and allows timely interventions to
address potential issues or capitalize on emerging opportunities.
• With real-time insights, organizations can react quickly to market changes, customer behavior, and
competitor actions, ensuring agility and responsiveness.
4. Data-driven Decision Support and Recommendations:
• BI tools can be configured to provide automated recommendations and alerts based on predefined
criteria.
• This helps decision-makers identify potential risks, opportunities, and areas for improvement.
• By leveraging data-driven recommendations, organizations can make more informed and objective
decisions, minimizing the risk of bias and human error.
5. Improved Communication and Collaboration:
• BI tools facilitate data storytelling through interactive dashboards and reports, simplifying complex
data and making it easier to communicate insights to stakeholders.
• This fosters collaboration across departments and teams, enabling everyone to work towards shared
goals and objectives.
• By breaking down information silos and promoting transparency, BI strengthens organizational
alignment and decision-making.
**Overall, BI empowers organizations to make: **
• More effective decisions: By providing data-driven insights, BI removes guesswork and leads to
better-informed choices.
• More timely decisions: Real-time data and alerts enable organizations to react quickly to changes and
capitalize on opportunities.
• More confident decisions: Data-driven evidence reduces risk and uncertainty, leading to increased
confidence in decision-making.
Examples of Effective and Timely Decisions with BI:
• Retailers: Analyze sales data to identify trends and adjust inventory levels in real-time, preventing
stockouts and overstocking.
• Financial institutions: Analyze customer data to identify potential fraud risks and take immediate
action to protect customers and assets.
• Healthcare providers: Analyze patient data to identify outbreaks of diseases and implement targeted
interventions to improve public health outcomes.
• Marketing teams: Analyze campaign performance data to optimize campaigns and maximize
marketing ROI.
• Manufacturing companies: Analyze production data to identify bottlenecks and optimize production
processes for increased efficiency and cost savings.
In conclusion, BI plays a critical role in driving organizational success by enabling effective and timely
decision-making. By unlocking the power of data, organizations can gain a competitive edge and achieve their
strategic objectives.