Business Intelligence

Learning Outcomes

By the end of this unit students will be able to:

LO1. Discuss business processes and the mechanisms used to support business
decision-making.

LO2. Compare the tools and technologies associated with business intelligence
functionality.

LO3. Demonstrate the use of business intelligence tools and technologies.

LO4. Discuss the impact of business intelligence tools and technologies for effective
decision-making purposes and the legal/regulatory context in which they are used.
Table of Contents
1. Operational tactical and strategic
2. Operational examples could include product
positioning or pricing
3. Tactical decisions could include financial outlays to
gain competitive advantage
4. Strategic business decisions could include priorities
5. Goals setting and forecasting for future
6. Global diversification
7. Analyzing data
8. Decision-making
9. Problem solving
10. Designing more intuitive/innovative systems
11. Information systems at on operational
12. Information systems tactical and strategic
level
13. Transaction processing
14. Management information systems
15. Decision support systems
16. Expert systems
Tactical Planning

 It involves breaking down a long-term strategic plan into smaller and more distinct short-term
plans.

 Companies and teams frequently use this type of plan when they have long-term goals that
extend further than two or three years.

 There are several key elements of a tactical plan, including focused goals, steps to take to reach
those goals and a timeline.

 A tactical plan is used to define goals and determine how they will be achieved through actions
and steps.
When to use tactical plan…

 When a business decision must be made promptly.

 When a strategic plan has been put in place and a team or business needs to determine the steps
needed to reach the strategic plan’s goal.

 When a diversion plan needs to be put in place to identify opportunities or prevent issues.

 When a business or a team wants to realize results over the short term rather than the long term.
Elements of Tactical Plan

 Goals

 Tactics

 Actions

 Resources

 Timeline
Advantages of a Tactical Plan

 This type of plan helps to turn strategies into actions that ultimately support a company or team
in reaching its goals.

 It encourages improved performance, as employees and team members will have actionable steps
to reach goals.

 It allows departments and teams to prioritize their work and ensures that each task ties into the
overall strategy.

 This type of plan promotes organization-wide involvement and can boost employee engagement.
Disadvantages of a Tactical Plan

 It takes time to create a tactical plan and can result in spending more time planning than
actually doing in some cases.

 It can cause a company's operations to slow down if the tactical plan is extensive.

 It requires everyone to do their part to ensure a team or company's goals are met. If one employee
or team member does not complete their task on time, it can slow the entire process down.
Tactical Planning Examples

If a company wishes to maximize their production of goods for the next year

 Then they would need to use tactics beforehand to achieve their target in a defined time.

 The tactics they may use can be; buying another piece of equipment, employing more staff,
generating more revenue to have resources for the production. 

 Every organization employs tactics to gain maximum benefits.

 Tactical planning helps you achieve your goals in a specified timeline.

 It needs a lot of planning and timing should be followed to accomplish the desired results. 
Strategic Planning

 It is an art of creating specific business strategies, implementing them, and evaluating the results
of executing the plan, in regard to a company’s overall long-term goals or desires.

 It is an organization’s process of defining its strategy, or direction, and making decisions on

allocating its resources to pursue this strategy. 

 It is a concept that focuses on integrating various departments (such

as accounting and finance, marketing, and human resources) within a company to accomplish
its strategic goals.

 The term strategic planning is essentially synonymous with strategic management.

Strategic Planning Process

 Strategy Formulation

 Strategy Implementation

 Strategy Evaluation
Advantages Strategic Planning Process

 Helps formulate better strategies using a logical, systematic approach

 Enhanced communication between employers and employees

 Empowers individuals working in the organization

Characteristics of Strategic goals

 Purpose-driven

 Long-term and forward-focused

 Actionable

 Measurable

Prioritizing Strategic Goals

 Identify the strategic goals.

 Determine which are worth pursuing.

Operational Plan

 An operational plan is a strategic document that outlines all the planning related to daily
operations and processes required for running a successful business.

 It entails all the activities that different teams or departments like recruitment, marketing, and
finance, need to perform to achieve company goals and objectives.

 The main objective of a well-defined operational plan ensures each manager and employee knows
their specific responsibilities, as well as how they should execute them within a definite timeline.
Importance of Operational Plan

 The whole point is to see the effect of operations on the business’s working in real-time, in order
to know when to execute the major strategies.

 An operational plan helps in identifying areas that are not generating enough revenue or are
causing losses, and then assists with formulating the necessary changes.

 The document also plays a crucial role in keeping all key stakeholders, management, and board
members on the same page.

 Everyone needs to be aligned with the company’s mission, goals, risks, hiring needs, financial
projections, key performance indicators (KPIs), etc.

 An operational plan will help every department focus on their contribution to the larger vision by
bringing all leading members together under one roof.
Operational Goal

 Improved safety performance

 Increased value stream productivity

 Improved Product/Service quality

 Greater sales

 Improved cost competitiveness

 Improved cash position

Operational - Pricing

Cost plus pricing

 Pricing your products above cost. 

 Total all your costs and add the margin you want on top to determine the price.
 The benefit of this model is that there is no strategizing.
 There is very little data analysis or market research involved.
 Due to this, cost-plus pricing has been considered a good starting point for a new company with
little overhead.
 However, cost-plus pricing is harder to manage over time as you may not be able to predict all of
your costs since costs can fluctuate
Operational - Pricing

Competitor based pricing

 Rather than using costs as a benchmark, this model is based on setting the prices according to
competitors’ pricing. 
 This is common when companies are vying for the same contract with government in health or
construction.
 When you are in a market with a product that is not unique or where prices are already
established, it’s best to set your prices somewhere in the middle but data analytics can help in
this.
 The drawback to competitor-based pricing is that you don’t have a strategy that addresses the
unique needs and concerns of your company.
Operational - Pricing

Value based pricing

 Value-based pricing is setting your prices based on what the customers believe the product is
worth and what they are willing to pay.
 The more value the product offers the customers, the more money they will be willing to pay.
 Rather than looking at the costs or competitors, value-based pricing requires one to look to the
customers.
 The downside to value-based pricing is that it takes time.
 One must be willing to invest the time to get to know the customers and understand their needs
to set effective prices this way. 
Business Forecasting

 Business forecasting refers to the tools and techniques used to predict developments in business,
such as sales, expenditures, and profits.

 The purpose of business forecasting is to develop better strategies based on these informed
predictions.

 Past data is collected and analyzed via quantitative or qualitative models so that patterns can be
identified and can direct demand planning, financial operations, future production, and
marketing operations.
Business Forecasting Process

 Identify the problem, data point, or question that will be the basis of the systematic investigation.

 Identify relevant, theoretical variables and determine the ideal manner for collecting datasets. 

 Make estimates about future business operations based on information collected through
investigation. 

 Choose the model that best fits the dataset, variables, and estimates. The chosen model conducts
data analysis, and a forecast is made.  
Example Business Forecasting

1. A company forecasting its sales through the end of the year

Let’s suppose a small greeting card company wants to forecast its sales through the end of the year.
The company has just a year and a half of experience and limited data to use for predictions.
Though the first few quarters were slow to start, they have gained a great reputation in the last
three quarters. For this reason, sales are on the rise.Since the business has limited historical data,
they might consider a qualitative model for predicting future sales. By polling their customers, the
greeting card company can gauge the willingness of their audience to buy new cards and pricing for
the remaining quarters of the year. Market surveys are a type of qualitative forecasting, which
utilizes questionnaires to estimate future customer behavior.
Global Diversification

For example, you can invest in funds that invest in companies in emerging markets, such as Brazil,
China, Mexico, and South Africa. Or you could choose funds that will let you invest in securities in
more developed countries, for example in western European countries like France and Germany, or
more advanced Asian countries such as Japan.

Different trade platform

•E*Trade.
•Fidelity.
•Interactive Brokers.
•Investing.com.
•MetaTrader 5.
•Schwab Mobile.
•Stash.
•TD Ameritrade.
How Business Intelligence helps in Productivity?

Business intelligence tools helps the company to analyze the data

 analyze the buying patterns

 predict buying trends
 target delivery time
 track the progress daily
 spot the inefficiencies
 check what is under-performing
How Business Intelligence helps in business plan?

 To gain a competitive advantage, businesses are looking for new tools to fulfill the needs of their
customers.

 Business Intelligence tools help in making successful business plans by allowing users to access
and analyze the data throughout the organization, find out what-if scenarios and much more.

 The powerful aggregated data and dashboards represented in understandable and intuitive
graphics provide the hidden information which enables the business to develop competency.

 BI software allows the free and open exchange of communication between different departments
throughout the organization leading to real-time information, data-driven insights, and informed
business decisions.
How Business Intelligence helps in HR management?

 To achieve this goal, the business must conduct through budget analysis in order to find out
different areas of cost-cutting.

 Business Intelligence solution helps decision makers to analyze the areas where chances of cost
savings are high.

 A good BI dashboard provides great visibility of the things that are incurring a high cost.

 For instance, in a manufacturing industry, a manufacturer can analyze the inventory and figure
out how much stock is left, how much to order, when to order to avoid wastage; this helps to save
costs.

 Moreover, BI tool allows them to access and collect the necessary data that leads to high cost
during production.
How Business Intelligence helps in cost optimization?

 With the help of BI tools, data-driven insights and KPIs, HR

 Can hire a top-notch employee,

 Can carry out the activities which lead to employee satisfaction and employee retention,

 Find out issues in team and automated alerts enable managers to make clear and confident
decisions.
How Business Intelligence helps in marketing campaigns?

Business Intelligence enables the business to

 Identify the detailed reports on market trends

 Customer preferences
 React quickly to the industry changes
 Track the success effectively
 Finds the unexplored market.
Innovations that transformed Business Intelligence

 Technology shifts
 Data about data
 Storytelling with data
 Smart data discovery
Business Intelligence Techniques

 Data mining: sorting through large datasets using databases, statistics, and machine learning to
identify trends and establish relationships.
 Querying: a request for specific data or information from a database
 Data preparation: the process of combining and structuring data in order to prepare it for
analysis
 Reporting: sharing operating and financial data analysis with decision-makers so they can draw
conclusions and make decisions
 Benchmarking: comparing current business processes and performance metrics to historical data
to track performance against industry bests
 Descriptive analytics: the interpretation of historical data to draw comparisons and better
understand changes that have occurred in a business
 Statistical analysis: collecting the results from descriptive analytics and applying statistics in
order to identify trends
 Data visualization: provides visual representations such as charts and graphs for easy data
analysis
Business Intelligence Tools

 Ad hoc analytics: an analysis process designed to answer specific questions on the spot
 Online analytical processing (OLAP): a computing method that enables multi-dimensional
analytical queries
 Mobile BI: software that optimizes desktop business intelligence for mobile devices
 Real-time BI: a data analytics approach that delivers real-time information to users by feeding
business transactions into a real-time data warehouse
 Operational BI: a data analysis approach that utilizes real-time business analytics to
automatically integrate real-time data into operational system for immediate use
 Software-as-a-service BI (SaaS BI): a cloud-hosted, subscription-based delivery model for
business intelligence software solutions
 Open-source BI (OSBI): business intelligence software solutions that do not require purchasing a
software license
 Collaborative BI: the merging of business intelligence software with collaboration tools in order to
streamline the sharing process
 Location intelligence (LI): software that is designed to relate geographic contexts to business data
 Data visualization software: facilitates the detection of patterns and correlations by providing
visual context
Decision support system

 GPS route planning. A DSS can be used to plan the fastest and best routes between two points
by analyzing the available options. These systems often include the capability to monitor traffic in
real-time to route around congestion.
 Crop-planning. Farmers use DSS to help them determine the best time to plant, fertilize, and
reap their crops. Bayer Crop Science has applied analytics and decision-support to every element
of its business, including the creation of “virtual factories” to perform “what-if” analyses at its
corn manufacturing sites.
 Clinical DSS. These systems help clinicians diagnose their patients. Penn Medicine has created a
clinical DSS that helps it get ICU patients off ventilators faster.
 ERP dashboards. These systems help managers monitor performance indicators. Digital
marketing and services firm Clear link uses a DSS system to help its managers pinpoint which
agents need extra help.
Transaction process system
Expert system

 MYCIN: It was based on backward chaining and could identify various bacteria that could cause
acute infections. It could also recommend drugs based on the patient’s weight. It is one of the
best Expert System Example.
 DENDRAL: Expert system used for chemical analysis to predict molecular structure.
 PXDES: An Example of Expert System used to predict the degree and type of lung cancer.
 CaDet: One of the best Expert System Example that can identify cancer at early stages.
Expert system
 REFERENCES
 Boyer, J. (2010) Business Intelligence Strategy. MC Press (US).

 Jeston, J. and Nelis, J. (2014) Business Process Management. 3rd Ed. Routledge.

 Kolb, J. (2013) Business Intelligence in Plain Language: A practical guide to Data Mining and
Business Analytics. CreateSpace Independent Publishing Platform.

 Marr, B. (2015) Big Data: Using Smart Big Data, Analytics and Metrics to Make Better Decisions
and Improve Performance. 1st Ed. John Wiley & Sons, Ltd.