BUSINESS INTELLIGENCE

ABSTRACT
Today Business intelligence (BI) is a core tool for every organization to work
with large amounts of data, filtering critical information for business use. BI
provides the intelligence for an organization to make decisions based on the
information collected and analyzed by BI methodologies. BI refers to software
that is used for extraction of data, the transformation of data and loading of
data (ETL). It further refers to the data repository (storage) such as data
warehousing, analytic tools like database query and reports.
In the recent times e-Commerce support, call center support are some of the
channel-oriented tools used by many companies who have direct contact with
a large number of customers. However, these create a new management
challenge of actually integrating enterprise applications in the real time.
Many companies who have faced this problem are basing their future
strategies on the business intelligence tools & concepts. The focus being on
examining the business needs against the role and requirement of real-time
BI.
The enclosed academic paper explores the Business Intelligence concepts &
techniques, its components, benefits of BI, factors influencing BI, an
emergence of BI, technology requirements, designing and implementing
business intelligence.
1. INTRODUCTION
The term intelligence in Business Intelligence (BI) has two primary
connotations or definitions. The first definition being it is the human
intellectual capacity in business affairs/activities. The second definition of
intelligence relates to the currency & relevance of the information. The
second aspect of intelligence caters to the knowledge and technologies that
help the management of an organization or an individual business.
The BI refers to a collection of comprehensive knowledge of all of the factors
that impact the running of an enterprise. It is necessary that firms have an indepth understanding or intelligence on factors that form the day-to-day
functioning of a business. These factors can be the competitors, clients,
economic environment, business associates, and internal operational
processes to make efficient and good quality business decisions.
A competitive intelligence part of BI refers to the information on the external
factors of business such as competitors & their actions. There is no element
of collecting data on the internal process in Competitive intelligence. It is the
age of big data. The increased data production standards, technologies,
automation, have created repositories to store data with the help of Data
warehousing tools. The processes have resulted in improved information

extraction, conversion, loading (ETL) of the data. The speedy collection of

data too is possible with the latest Enterprise Application Integration tools.
OLAP reports facilitate the faster generation of new reports.

2. BUSINESS INTELLIGENCE INTRODUCTION

The process of business intelligence has a lot of definitions. Stackowiak et al.
(2007) defines business intelligence as the analyzing large data and
presenting it in the form of condensed reports. On the other hand (Cui et al.,
2007) view BI as way of improving business performance with the use of
actionable business information available to the company owner.
3. COMPONENTS OF BI.
It refers to the way the users using the sophisticated BI tools can navigate
their way through large data to analyze the information against time and
hierarchies.
The OLAP tool or Online Analytical Processing helps with an analyzed view of
business data in a summary format. It provides the data in multidimensional
context. The summary information is used to report, analyze, model and plan
of the business organization.
The state of the enterprise can be analyzed using data produced by OLAP
techniques and tools. The data warehouses (repository), data marts, data
mining tools are used to store, analyze and forecast data to work with OLAP
tools to predict the trends in business. These are an integral part of
enterprise application systems.
The document management systems & EDA, mapping, model visualization,
temporal analysis and dash boarding are other tools, which are an integral
part of BI tool gallery. The GIS, the MIS, Trend forecast and analysis, Software
as a Service (SaaS) are the BI tools used by industry to evaluate
organizational information at various levels.
Advanced Analytics: A BI technique, which has the statistical advantage. It
is a tool, which is used for data mining and or predictive analytics. It helps to
forecast or provide certain measures on facts.
Corporate Performance Tools (Portals, Dashboards): This is a general tool.
It acts as a plug for data from various sources to formulate an aggregate
story.
Real-time BI: It allows the real-time sharing of metrics using email, other
messaging methods, with interactive displays.

Data Warehouse and data marts: The data warehouse is an important

aspect of business intelligence. The data warehouse stores and supports the
propagation of data. It handles various enterprise records and conducts
integration, aggregation, cleansing, and also conducts the query aspect of
the data. The data can consist of adaptable data and live data. The data can
be taken from historical data tables, operational databases, remote data, for
example, or information from the already existing data warehouse
environment. It can be relational databases, which have business application
relevance. The data can be in any format like word document files, text files,
spreadsheets or tables. The data in the data warehouse can come from any
application, platform including multimedia platforms.

Data Mart
A data mart is information collected per criteria set for decision making of the
particular department of an organization (Inmon, 1999) each department of
an organization has different rules of information analysis. They have their
interpretation of what a data mart should provide. For e.g. the HR department
and Sales department will have the different set of software, hardware and
reporting tools suitable for their respective business processes and needs.
There can be multiple data marts in an Organization. A data mart can support
a business function, processor unit.
BI tools are a new middleware. It mediates between the transactional
applications and decision support applications. The capabilities of BI assist
with decision support, online analytical processing, statistical analysis,
forecasting, and data mining. The four general components of BI are as
follows:
Data Sources
The data can come from actual data sheets, operational databases or
external data operations such as Sales activity in the recent past. The data
can also come from existing data warehouse applications within the business
unit. It can be in the form of a relational database or data from any business
unit applications. A data input can happen from tables, spreadsheets,
multimedia formats such as pictures, etc.
4. ISSUES IN BI
Experts View: The experts see BI Data warehousing as supplementary
systems and treat BI as a technology platform for decision support
applications. The experts consider the data-mining tool of BI as an advanced
decision support tool. To the statistical output of BI is considered as
forecasting and multidimensional analysis tool.

Analysis of right information:

According to Gartner, a Forrester survey in spite of organizations investing in
expensive systems such as CRM and ERP, the market response of these
organizations continues to be below expectations. Any organization needs the
right information quickly and hence the BI tools are becoming the
increasingly important aspect of running a smarter business.
5. FUTURE OF BUSINESS INTELLIGENCE
In this high speed and fast world, customers are demanding quicker services.
To achieve this speed companies have no choice but to rely on the BI tools to
be able to predict trends and respond to the market before anyone else. The
demand on the performance of business intelligence will increase as
customer expectations become more personalized, localized and faster than
before. The request for information is expected to go beyond weekly and
monthly levels to hourly or even minute-by-minute level. It is hence
necessary that companies escalate their speed to meet the customer
expectations and stay focused on BI tools to support their operations.
6. REASONS FOR BUSINESS INTELLIGENCE
Todays businesses recognize the need to respond to market quickly with a
right response. The BI tools allow this market response by analyzing the
gathered data in real time and provide a trend to the business get back to the
market. Business Intelligence tools allow an organization to predict by
extrapolating available information. It helps to make an accurate forecast of
future trends or economic conditions. A proactive use of business intelligence
can help an organization make favorable decisions. A timely decision and
right decision are the key outcomes of a BI tool.
Business intelligence tool can indicate:

The competition analysis against your firm's position.

Changes in spending & behavioral patterns
The core competencies of the firm
Market forecast related to future trends, current status, demographics, etc.
The political, regulatory, social environment in which business operates
The new rising competition

The primary of BI tools are to gather, collate, and analyze the high-quality
data. The warehouse data are collected, cleansed, transformed loaded into
the repository. Depending on the functional area the data is extracted from
the warehouse (Data Mart). The operational data (raw) and the real-time data
from various customer-facing applications (transactional, data) pass through
a different level of information metamorphosis.
7. BENEFITS OF BI

BI avoids guesswork within an organization, improves communication within

departments at the operational level. It helps companies respond swiftly,
especially in the quickly changing financial scenarios. BI tools help companies
better their performance and market response. Besides people, operational
information is an asset of any organization. BI tools facilitate faster market
response, quicker response than the competition, the response based on
accurate real-time data, helping companies put up a superior market
performance.
BI superior tools, allow users to analytical intelligence available to resolve
many business issues including increased response rate from direct mail,
telephone, e-mail, and Internet delivered marketing campaigns.
With BI, firms can identify the loyal customers and offer better services to the loyalty sector.
Evaluate & monitor e-commerce strategies.
Identifying warranty-reported problems quickly and minimize the impact of
product
design deficiencies.
Money-Laundering risks and criminal activities monitoring and prevention.
Analyze credit background of customers and reduce risk and improve
profitability.
Prediction about products and service combination customer may prefer
Clinical drug analysis.
Apply predictive maintenance to reduce equipment downtime
Determine why customers are attracted to competition.
Detect financial, credit card fraudulent behavior by the customer
Customers are an important aspect of any business. It is they who pay for
business products or services and add to the financial profits of the company.
It is hence imperative to watch the customer behavior; their quick changing
demands and is able to cater to the changed demand in an equally quick
manner.
Along with the client, a business always needs to be a step ahead of the
competition. An organization always needs to be a leader and not a follower.
Hence, it is required that a business can watch what the competition is doing
and stay ahead of the rival by launching products, services to cater to the
customer.
8. BUSINESS INTELLIGENCE TECHNOLOGY
Business Intelligence provides official data in a structured information form
that is easy to read, analyze and conclude. The organizations use various
tools like data warehouse to collect the accurate, timely, current and relevant
data. The preference for the data warehouse is because it can collate data
from various sources, logically.
BI technical requirements need to address following elements actually to
present the user with business intelligence information. The elements being:

Authorized secure user access to the warehouse

Data volume (capacity)
Duration of data storage (data retention)
Performance & benchmark targets

There are developed several tools available for tasks such as tasks that
involve gathering and analyzing large quantities of unstructured data. Some
of the tools used are as below:

Associative Query Logic or AQL

Scorecard
Business Performance Measurement & Management
Business Organizing & Planning
BPRE or Business Process Re-engineering
Competition Analysis
CRM or Customer Relationship Management as well Marketing
Data Farming, Data Mining, and Data Warehouses
Forecasting with help of Decision Support Systems (DSS)
Document warehouses & management
Enterprise Management Systems
Executive Information Systems (EIS)
Geographic Information Systems (GIS)
Finance and Budgeting
Human Resource Systems
KMS or Knowledge Management Systems
Dash boarding, Mapping, Information visualization.
Online Analytical Processing (OLAP)
Multidimensional analysis or Analytics (hypercube or cube)
Real-time business intelligence
Statistics and Technical Data Analysis
Management Information Systems (MIS)
Demand Chain Management or Supply Chain Management
Systems Intelligence Reports
Trend Analytics
User/End-user Query and Reporting
Web & Text Personalization and Mining

The key performance indicators or KPI is the unit of BI, which indicates
the status of a business. In the past, this data use to be available in 2-3
months of a process taking place, making it useless for any predictions
or market responses.
9. DESIGNING AND IMPLEMENTING BUSINESS INTELLIGENCE
Implementing Business Intelligence strategy requires introspection on
the following aspects:
Goal Alignment queries: An organization needs to evaluate BI
decision against the goals and the value statement of the company. It

requires receiving answers to important questions such as how is this

strategy going to change the performance of the organization? Or what
organizational goal/s BI tool intervention will address?
Baseline queries: The organization needs to evaluate the current
data gathering process. It needs to answer questions like how is the
current data collected? What sources of data are utilized? What is the
level of random variation of this data? Does the organization measure
this difference and so on?
Cost and risk queries: Any business decision has a financial impact.
It's necessary that the decision on BI route should be evaluated against
the financial metrics. One should be able to understand clearly the
financial risk that may arise if the BI initiative fails.
Customer and Stakeholder queries: The BI decision needs to
define clearly who are the stakeholders who will benefit from this
initiative. Are they the customers, particular departments,
shareholders, distributors, employees or all of them or some of them?
The further question an organization must ask is what will be the
benefit? Can it be computed or calculated? Is the benefit direct or
indirect?
Metrics-related queries: A decision on the metrics backdrop is
crucial. One must ask questions like what are the industry standards,
how many parameters one needs to
track, what systems will be used to monitor the metrics etc. It is
necessary that the use of metrics be known mainly to understand what
metrics will collect which information.
Measurement Methodology Queries: It is important to establish a
method to determine the best way of evaluating or measuring the
parameters required. One must answer questions about what methods
will be used, the frequency of collection of data, what are the industry
standards, are these best methods of measurement, etc.
Results-related queries: Monitoring of BI program with a proper
methodology is necessary. It is possible that one has to make
adjustments to the program. The program will always go through
evaluation indicators such as validity, reliability, and accuracy. If there
are any unknown outcomes, one should be able to identify what
caused these variations.
10. DISCUSSION

Every new organization that operates in the fast-paced business world needs
an understanding of the primary and secondary value it creates for its
customer. (Denison, 1997) The value chain and the critical factor that impact
this value proposition is not possible if the organization has not taken to the
BI intervening. In 1993, Davenport described various re-engineering
innovations towards business processes.
Adelman et.al, 2002 defined BI as a term that covers a process of analytical
software and solutions that gathers, consolidates, and analyzes the
information. It provides access to information in a structured manner that
helps the organization make timely and correct decisions. Another definition
of BI is by Malhotra in 2000 where he connects the real-time information with
a central repository. According to Malhotra the analytics at a horizontal and
vertical level of the gathered information help organizations to explore its
decision options. According to Gangadharan and Swamy, who defined BI in
2004, BI has covered knowledge management, enterprise resource planning,
and data mining and decision support systems. They saw BI as a larger tool
encompassing many technological aspects of a process.
Businesses today want to know more. If a sale is done, then what were the
underlying reasons? The Why of the sale is crucial? For, e.g., if a certain
number of blankets were sold in winter in India, then the retailer needs to
know why he met this great success. Once BI helps him understand the
underlying reason, then he can decide the size of the older stock based on
such intelligence. Such informed decisions, reduce the financial risk and helps
organization compete effectively.
It is no more about storing large data on the computers. The organization
does not have to depend on the storage capacity of computers. The cloud
technology or the virtual storage facilities have changed the BI game
significantly. The virtual storage of information allows new BI tools to source
organization-wide data and analyze to receive the information that may be
required by that particular geographical business unit.
Many organizations look at BI as something that only technical people can
work. Also, they consider it to be an expensive tool. The traditional BI does
not produce results very quickly. But the real-time environment can produce
quick results. Any ERP, CRM or other applications implemented by an
organization are BI tools. However, they need to be integrated across and
cannot be stand-alone units. Else they will not act as BI tools. Traditional BI
systems have a backend database supported by the front end user interface
and middleware software that interacts with the two layers. The BI tools
include online analytics, statistical analysis, data mining, forecasting and all
the other decision tools.
Many business organizations in verticals such as financial services,
telecommunication providers manufacturers, electronics, e-commerce
businesses; airlines, health systems, and hotels use BI. The BI is implemented

to source information in the areas such as market research, customer

support, product profitability, segmenting, inventory, fraud detection,
distribution, etc.
Statistical analysis is the basis for Business Intelligence and data mining. The
statistical methods such as clustering, classification, sequential patterns,
analysis, are an integral part of BI. The other BI methods include time series
analysis, regression, predictions, and multidimensional methods.
11. CONCLUSION
In every industry performance oriented ERP & application systems are
available. However to remain competitive and be able to predict and see the
trend before the competition does so, it is necessary the BI with its analytics
capability becomes part of the business strategy for every organization. The
BI systems, which give the power of analytics on the real time data, produce
a wealth of information. The information is presented in structured format
that becomes the critical input to an organizations decision-making process.