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Chapter One With Lecturer Notes
Chapter One With Lecturer Notes
Chapter 1:
An Overview of Business
Intelligence, Analytics, and
Decision Support
Learning Objectives
Understand todays turbulent business
environment and describe how organizations
survive and even excel in such an
environment (solving problems and
exploiting opportunities)
Understand the need for computerized
support of managerial decision making
Understand an early framework for
managerial decision making
... (Continued)
1-2 Copyright 2014 Pearson Education, Inc.
Learning Objectives
Learn the conceptual foundations of the
DSS methodology
Describe the BI methodology and
concepts and relate them to DSS
Understand the various types of analytics
List the major tools of computerized
decision support
Company background
Problem
Proposed solution and results
Answer & discuss the case questions...
1-4 Copyright 2014 Pearson Education, Inc.
Opening Vignette
Questions for the Opening Vignette
1. What information is provided by the descriptive
analytics employed at Magpie Sensing?
2. What type of support is provided by the predictive
analytics employed at Magpie Sensing?
3. How does prescriptive analytics help in business
decision making?
4. In what ways can actionable information be reported in
real time to concerned users of the system?
5. In what other situations might real-time monitoring
applications be needed?
1-5 Copyright 2014 Pearson Education, Inc.
Changing Business Environment
& Computerized Decision Support
Companies are moving aggressively to
computerized support of their operations
Business Intelligence
Business PressuresResponsesSupport
Model
Business pressures result of today's
competitive business climate
Responses to counter the pressures
Support to better facilitate the process
1-6 Copyright 2014 Pearson Education, Inc.
Business PressuresResponses
Support Model
Interpersonal
1. Figurehead
2. Leader Decisional
3. Liaison 7. Entrepreneur
8. Disturbance handler
Informational 9. Resource allocator
4. Monitor 10. Negotiator
5. Disseminator
6. Spokesperson
This is where, in a DWH, the key data entities are arranged as multiple
dimensions (subject areas) rather than multiple relations as in the case of
databases. In this way, DWHs provide a multi-dimensional view of data
that enhances the decision support queries.
The central entity of the DWH is the facts table, and it contains summaries
of enterprise-wide data that provide an overall view of the business
performance.
Businesses from different sectors perform data analysis to support decision making, where
it is the process of gathering, modelling, and transforming data in ways that generate
decisional information.
In view of that, a general description of data analysis is to turn data into information that
answer questions, hence, identifying questions is considered to be the prerequisite for
extracting useful information. Hence, the process of data analysis involves identifying
questions and then extracting information.
In this sense, data analysis is the process of examining data files and information to detect
and highlight transactions and patterns that show possible irregularity.
To do so, decision makers will need to look beyond the departmental reports by looking at
numbers from different dimensions. Therefore, with the increasing data volumes in
business, traditional data analysis has become insufficient and more sophisticated data
analysis methods have become necessary.
A data analysis course always takes place with a predefined objective in mind, which
identifies what is important in a problem, what counts and what doesnt count. In view of
that, using DWHs enhances the orientation of data analysis towards the objective or the
problem of the analysis.
Pinet and Schneider (2010) state: By combining data from different sources, it is possible
to show the correlations between objects dealt with, for example, to show the links
between a type of industrial installation and disease.
In this way, DWHs facilitate a multi-dimensional view of data which offers the ability to
compute aggregated data with lower levels of detail (facts) from subject specific data sets
(dimensions) with higher levels of detail; this in turn facilitates a subject oriented data
analysis, otherwise, the analysis may produce biased results and therefore erroneous
decisions.
Analyzing data to assess known relationships as well as to find interesting patterns and
unknown relationships (Murray, et al. 2009).
"The search for valuable information in large volumes of data" (Chang, et al. 2010;
Hansen and Nelson, 2002; Aggarwal et al. 20012).
Extracting information that resides implicitly in the data (Delgado et al. 2011).
The extraction of useful information from data to 1) identify unknown and potentially
interesting patterns (or item sets) hidden within data that is stored on databases, and 2)
to identify the associations between the interesting patterns (Yun et al. 2012).
Still, this definition describes the process of data mining but doesnt
characterise the functions of data mining to identify what is interesting. In
this matter, Maimon and Rokach (2005 p. 656) claim that what is
interesting is ultimately subjective; it is thus difficult to specify a formal
definition for the characteristics of interestingness when digging in large
data sets.
Variety
Velocity
Questions / Comments