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IMS3001 – BUSINESS INTELLIGENCE SYSTEMS – SEM 1 , 2004
Introduction to Introduction to Business Intelligent Business Intelligent SystemsSystems
Week 1Dr. Jocelyn San PedroSchool of Information
Management & SystemsMonash University
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Staff- Staff- Dr. Jocelyn San Dr. Jocelyn San PedroPedro
T1.28 Level 1, Building T, Caulfield Campus
Jocelyn.sanpedro@sims.monash.edu.au
www.sims.monash.edu.au/staff/jsanpedro
Email correspondence: Subject: IMS3001 Email enquiries anytime, but expect
replies by Thursday PM Consultation Hours: 2-3 PM Tu,Th,Fri
(by appointment)
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The UnitThe Unit 2-Hour lecture per week 2-Hour tutorial per week Tutorials begin in Week 2 (i.e. next
week) Please make sure you are assigned
to a tutorial in Allocate+ no student will be admitted to a
tutorial unless they are on the class list.
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SynopsisSynopsis evolution and current state of
the art of the theory and practice of business intelligence systems;
role of these business intelligence systems in providing intelligence information to business decision makers
development process and some key techniques that support it
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AimAim provide students with
introductory knowledge of concepts, development and use of business intelligence systems
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ObjectivesObjectives
At the completion of this unit the students will:
have knowledge of: the scope and application of business
intelligence systems the role of business intelligence systems in
supporting business decision making the major approaches to the development
of business intelligent systems evolution of business intelligence systems
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ObjectivesObjectives have an understanding of:
the process of business intelligence systems development
current state of the art of the theory and practice of business intelligence systems
have the skills to: organise, analyse and interpret data for
the purpose of supporting business decision making
understand managerial problem solving activity as well as problem finding activity for supporting business decision making
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ObjectivesObjectiveshave developed attitudes which
enable them to: identify and evaluate business
intelligence opportunities plan for business intelligence
solution and implementation work closely with business
intelligence team
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AssessmentAssessment
Class Participation Value 10% in tutorials
Assignment Value 30% due Week 9, during tutorial
Exam, Value 60%Overall Assessment 100%
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Lecture 1 - OutlineLecture 1 - Outline What is Business Intelligence
(BI)? What is Business Intelligence
System (BIS)? What is the role of BIS in
supporting business decision making?
How did BIS evolve?
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Learning ObjectivesLearning Objectives Define business intelligence (BI) and
business intelligence systems (BIS) Explain the role of BIS in supporting
business decision making; Identify the different BIS that were
introduced in the past and explain how such systems supported business decision making
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What is Business What is Business Intelligence?Intelligence?
According to vendors:
a segment of information technology that comprises software systems that enable finding, storing, organising and supplying data; when incorporated into an information system, it enables company to utilise real-time analysis of information
Information Technology Toolbox www.ITToolbox.com
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What is Business What is Business Intelligence?Intelligence? software that enables business users to
see and use large amounts of complex data (e.g. multidimensional analysis, query tools, data mining tools)
SDG Computing www.sdgcomputing.com
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What is Business What is Business Intelligence?Intelligence? a category of applications and
technologies for gathering, storing, analysing, reporting on and providing access to data to help enterprise users make better business decisions
Cognos (www.cognos.com)
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What is Business What is Business Intelligence?Intelligence? markets business performance software,
comprised of three subcategories that includes ad hoc query and analysis, reporting/OLAP, executive information systems and analytical applications
Brio (www.brio.com)
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What is Business What is Business Intelligence?Intelligence? a set of concepts and methods to
improve business decision making by using fact-based support systems (e.g. briefing books and executive information systems in the 1990s)
Gartner Group www.gartner.com
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What is Business What is Business Intelligence?Intelligence? BI lets organisations access, analyse,
and share information internally with employees and externally with customers, suppliers, and partners
Business Objects www.businessobjects.com
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What is Business What is Business Intelligence?Intelligence? BI helps corporations transform their
operational data into actionable information; helps meet query reporting and advanced analytical needs
MicroStrategy www.microstrategy.com
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What is Business What is Business Intelligence?Intelligence? BI is a performance management
framework, an ongoing cycle by which companies set their goals, analyze their progress, gain insight, take action, measure their success, and start all over again
It helps decision makers make better decisions faster at both strategic and operating levels
Vitt, Luckevich and Misner (2002)Microsoft Corporation
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What is Business What is Business Intelligence?Intelligence?
According to non-vendors:
BI is processed information of interest to management about the present and future environment in which business is operating
Greene (1966)
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What is Business What is Business Intelligence?Intelligence? Processed information vs. data
data - raw material that is composed of facts intelligence information - information digested,
analysed, and interpreted for the purpose of decision making
Management has crucial role in BI, determines what will be in the domain of BI what information if of interest or relevant to its
decision Company’s environment
Present environment (mostly for tactical intelligence) Future environment (mostly for strategic intelligence)
Greene (1966) (cont)
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Operational Intelligence Affects operational levels of organisation on
daily, weekly, monthly basis Tactical Intelligence
Affects a part of organisation for a limited time (i.e., coming year) into the future
Strategic Intelligence Affects the entire organisation, or a major
part of it for a long period of time (i.e., 2 - 5 years and beyond)
PURPOSE OF BI Shift from reliance on short-term tactical
decisions to better use of strategic intelligence in the decision-making process
Greene (1966) (cont)
What is Business What is Business Intelligence?Intelligence?
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What is Business What is Business Intelligence?Intelligence? BI results from full appraisal of
information, past actions, and options; once sown, it tends to propagate itself across an organisation
Liautuad and Hammond (2000)
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What is Business What is Business Intelligence?Intelligence? BI refers to the ability to understand the
interrelationships of presented facts – whether they involve data, information and/or knowledge – in such a way to guide action toward one or more desired goals
Thierauf (2001)
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What is Business What is Business Intelligence?Intelligence? Relationship of intelligence to
various levels of summarisation Data – unstructured data Information – structured data useful for
analysis Knowledge - obtained from experts
based on actual experience Intelligence – keen insight into
understanding important relationshipsThierauf (2001)
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What is Business What is Business Intelligence?Intelligence? BI centers on computerised methods and
processes to improve strategic, tactical and operational decisions using data, information, and knowledge from multiple sources as well as applying experience and assumptions to develop an accurate understanding of the dynamic surrounding decision making
Thierauf (2001) (cont)
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For this UNIT – IMS3001For this UNIT – IMS3001 We shall adopt the definition of BI by non-
vendors – process, organisational function, product
Processing of information – collecting, organising, analysing, gaining insight, interpreting, reporting data, taking action, measuring the benefits of such actions for the purpose of supporting decision making
Generally in the context of decision support
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What is Business Intelligence What is Business Intelligence System?System? BIS is an information system that
provides BI to business decision makers at different levels of organisation (operational, tactical, strategic levels)
BIS is an information system that turns selected data, information, and/or knowledge into desired intelligence for business gain (Thierauf, 2001)
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What is the role of Business Intelligence System?
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Role of BISRole of BIS Provide decision makers with the ability
to understand (i.e., the intelligence to gain insights into) the relationships of presented facts in the form of data, information, and knowledge in order to guide action toward a desired actionable goal (Thierauf, 2001)
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Role of BIS Role of BIS Provide decision makers with timely data,
information and knowledge for problem solving, and problem finding
Past : Decision making as Problem Solving activity Reactive approach –use of appropriate
management technologies to resolve current problems as they arise
Current: Business intelligence activity as problem solving, as well as problem finding Proactive, preventive approach – anticipating
future company problems; looking for future opportunities
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How did Business Intelligence Systems
evolve?
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Evolution of BISEvolution of BISComputer-based Support Systems technologies 1950s Transaction Processing Systems (TPS) 1960s Management Information Systems (MIS) 1970s Office Automation Systems
Decision Support Systems (DSS) 1980s DSS Expanded
Commercial applications of Expert Systems Executive Information Systems (EIS)
1990s Group Support Systems Neural Computing Integrated, hybrid computer systems
Turban and Aronson (2001)
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Attributes of Computer-based Support Attributes of Computer-based Support SystemsSystems
(Turban and Aronson, 2001)(Turban and Aronson, 2001)
Dimension
Applications
TPS Payroll, inventory, record keeping, production and sales information
MIS Production control, sales forecasting, monitoring
DSS Long-range strategic planning, complex integrated problem areas
ES Diagnosis, strategic planning, internal control planning, maintenance strategies, narrow domain
EIS Support to top management, decision, environmental scanning
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Attributes of Computer-based Support Attributes of Computer-based Support SystemsSystems
(Turban and Aronson, 2001)(Turban and Aronson, 2001)
Dimension
Focus
TPS Data transactions
MIS Information
DSS Decisions, flexibility, user-friendliness
ES Inferencing, transfer of expertise
EIS Tracking, control “drill down”
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Attributes of Computer-based Support Attributes of Computer-based Support SystemsSystems
(Turban and Aronson, 2001)(Turban and Aronson, 2001)
Dimension
Decision Capabilities
TPS No decision, or simple decision models
MIS Structured routine problems using conventional operations research tools
DSS Semi-structured problems, integrated operations research models, bled of judgment and structured support capabilities
ES The system makes complex decisions, unstructured; use of rules (heuristics)
EIS None
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Attributes of Computer-based Support Attributes of Computer-based Support SystemsSystems
(Turban and Aronson, 2001)(Turban and Aronson, 2001)
Dimension
Highest Organisation Level served
TPS Sub-managerial, low management
MIS Middle management
DSS Top management
ES Top management and specialists
EIS Senior executives
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More BIS technologiesMore BIS technologies 1990s Data warehouses
Enable decision makers to “pull” BI from a large centralised repository
created to support the information requirements of an organisation’s decision makers.
1990s OLAP (On-Line Analytical Processing) systems Enable decision makers to build and work with
analytical models easily and view the output in multiple dimensions
1990s Knowledge Management Systems (KMS) Go beyond relationships found in information
allowing decision makers to extract patterns, trends, correlations that underlie the interworkings of a company currently and over time
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Summary Summary Vendors define BI according to what their products
can do for the business enterprise Limited in scope; mostly refers to data
analysis, querying and reporting Non-vendors refer to BI as a process, an
organisational function, and a product Process – of converting data into actionable
information – from unstructured data to keen insight and understanding of interrelationships of presented facts
Organisational function – strategic management function that affects the entire or major part of organisation
Product – processed information for the purpose of supporting business decision making
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SummarySummary BIS is an information system that
provides BI to business decision makers
BIS evolved from the concept of Computer-based Support Systems decision support technologies
New BIS terminologies – data warehousing, OLAP, KMS
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ReferencesReferences Vitt, E., Luckevich, M. and Misner, S. (2002)
Business Intelligence, Microsoft Corporation. Greene, R. (1966) Business Intelligence and
espionage. Dow-Jones Irwin, Homewood, Ill. Lintaud, B. (2000) e-Business Intelligence:
Turning Information into Knowledge into Profit, McGraw Hill, New York.
Thierauf, R. (2001) Effective business intelligence systems, Quorum Books.
Turban, E. and Aronson, J. (2001) Decision Support and Intelligent Systems, 6th Ed, Prentice Hall.
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Questions?
Jocelyn.sanpedro@sims.monash.edu.auSchool of Information Management and
Systems, Monash UniversityT1.28, T Block, Caulfield Campus
9903 2735