BUSINESS INTELLIGENCE SYSTEM

Introduction:
The term business intelligence (BI) dates to 1958. It refers to technologies,
applications, and practices for the collection, integration, analysis, and presentation
of business information and also sometimes to the information itself. The purpose
of business intelligence is to support better business decision making. BI describes
a set of concepts and methods to improve business decision making by using fact-
based support systems. BI is sometimes used interchangeably with briefing books,
report and query tools and executive information systems. Business Intelligence
systems are data-driven BI systems provide historical, current, and predictive
views of business operations, most often using data that has been gathered into a
data warehouse or a data mart and occasionally working from operational data.
Software elements support reporting, interactive "slice-and-dice" pivot-table
analyses, visualization, and statistical data mining. Applications tackle sales,
production, financial, and many other sources of business data for purposes that
include, notably, business performance management

History of Business Intelligence

business is a collection of activities carried on for whatever purpose, be it

science, technology, commerce, industry, law, government, defense, et cetera. The
communication facility serving the conduct of a business (in the broad sense) may
be referred to as an intelligence system. The notion of intelligence is also defined
here, in a more general sense, as the ability to apprehend the interrelationships of
presented facts in such a way as to guide action towards a desired goal. Prior to the
start of the Information Age in the late 20th century, businesses had to collect data
from non-automated sources. Businesses then lacked the computing resources to
properly analyze the data, and as a result, companies often made business
decisions primarily on the basis of intuition.
 As businesses started automating more and more systems, more and more
data became available. However, collection remained a challenge due to a lack of
infrastructure for data exchange or to incompatibilities between systems. Analysis
of the data that was gathered and reports on the data sometimes took months to
generate. Such reports allowed informed long-term strategic decision-making.
However, short-term tactical decision-making continued to rely on intuition.

In modern businesses, increasing standards, automation, and technologies

have led to vast amounts of data becoming available. Data warehouse technologies
have set up repositories to store these data. Business intelligence has now become
the art of sifting through large amounts of data, extracting pertinent information,
and turning that information into knowledge from which actions can be taken.

Business intelligence software incorporates the ability to mine data, analyze,

and report. Some modern BI software allows users to cross-analyze and perform
deep data research rapidly for better analysis of sales or performance on an
individual, department, or company level. In modern applications of business
intelligence software, managers are able to quickly compile reports from data for
forecasting, analysis, and business decision-making.

What Does BI Do?

BI assists in strategic and operational decision making. The strategic use of

BI in the following order;
1. Corporate performance management
2. Optimizing customer relations, monitoring business activity, and traditional
decision support
3. Packaged standalone BI applications for specific operations or strategies
4. Management reporting of business intelligence The implication of this ranking is
that ordinary reporting of your own and your competitors’ performance, which
 is the strength of many existing software packages, is not enough. A second
implication is that too many firms still view business intelligence

Business Intelligence Chart

Living in the exciting information age we are exposed to ever growing

quantities of data, coming from an increased number of sources. As modern
businesses are trying to gain a competitive edge in every operational aspect,
marketing, customer-support, financials, production and HR management, the
need for better information in-time increases. The objective of Business Intelligence
(BI) systems is to collect raw data in a varying level of quality and present it in time
as meaningful information in the format preferred by the company topic holders.
BI tools help sales to customize offers, track success or failure of sales, set metrics
to the company production, marketing and sales, anticipate and satisfy the
customers' needs. In short - BI tools find what is right and more important what is
wrong.
Business Intelligence System:
Business intelligence systems combine operational data with analytical tools
to present complex and competitive information to planners and decision makers.
Their objective is to improve the timeliness and quality of the input to the decision
process. Business Intelligence is used to understand the capabilities available in the
firm; the state of the art, trends, and future directions in the markets, the
technologies, and the regulatory environment in which the firm competes; and the
actions of competitors and the implications of these actions .The emergence of the
data warehouse as a repository, the advances in data cleansing, the increased
capabilities of hardware and software, and the emergence of the web architecture
all combine to create a richer business intelligence environment than was available
previously.

Business intelligence systems can help companies have a more

comprehensive knowledge of the factors affecting their business, such as metrics
on sales, production, internal operations, and they can help companies to make
better business decisions. Business intelligence is used to improve the timeliness
and quality of information and enable managers to better understand the position
of their firm in comparison to its competitors. Business Intelligence applications
and technologies can help companies analyze the following: changing trends in
market share, changes in customer behavior and spending patterns, customers'
preferences, company capabilities and market conditions. Business intelligence can
be used to help analysts and managers determine which adjustments are most
likely to affect trends. Having access to timely and accurate information is an
important resource for a company, which can expedite decision-making and
improve customers' experience.

The five key stages of Business Intelligence

The following are the five key stages of Business Intelligence;

 • Data Sourcing
• Data Analysis
• Situation Awareness
• Risk Assessment
• Decision Support

Data sourcing

Business Intelligence is about extracting information from multiple sources

of data. The data might be: text documents - e.g. memos or reports or email
messages; photographs and images; sounds; formatted tables; web pages and URL
lists. The key to data sourcing is to obtain the information in electronic form. So
typical sources of data might include: scanners; digital cameras; database queries;
web searches; computer file access; etcetera.

Data analysis

Business Intelligence is about synthesizing useful knowledge from collections

of data. It is about estimating current trends, integrating and summarising
disparate information, validating models of understanding, and predicting missing
information or future trends. This process of data analysis is also called data
mining or knowledge discovery. Typical analysis tools might use:-

• probability theory - e.g. classification, clustering and Bayesian networks;

• statistical methods - e.g. regression;
• operations research - e.g. queuing and scheduling;
• artificial intelligence - e.g. neural networks and fuzzy logic.

Situation awareness

Business Intelligence is about filtering out irrelevant information, and

setting the remaining information in the context of the business and its
environment. The user needs the key items of information relevant to his or her
needs, and summaries that are syntheses of all the relevant data (market forces,
government policy etc.). Situation awareness is the grasp of the context in which
to understand and make decisions. Algorithms for situation assessment provide
such syntheses automatically.

Risk assessment

Business Intelligence is about discovering what plausible actions might be

taken, or decisions made, at different times. It is about helping you weigh up the
current and future risk, cost or benefit of taking one action over another, or making
one decision versus another. It is about inferring and summarising your best
options or choices.

Decision support

Business Intelligence is about using information wisely. It aims to provide

warning you of important events, such as takeovers, market changes, and poor
staff performance, so that you can take preventative steps. It seeks to help you
analyse and make better business decisions, to improve sales or customer
satisfaction or staff morale. It presents the information you need, when you need it.

Business Intelligence technologies

For a BI technology system to work effectively, a company should have a

secure computer system which can specify different levels of user access to the data
'warehouse,' depending on whether the user is a junior staffer, a manager, or an
executive. Also, a BI system should have sufficient data capacity and a plan for
how long data will be stored (data retention). Analysts should set benchmark and
performance targets for the system. Business intelligence analysts have developed
software tools to gather and analyze large quantities of unstructured data, such as
production metrics, sales statistics, attendance reports, and customer attrition
figures. Each BI vendor typically develops Business intelligence systems
differently, to suit the demands of different sectors

Business intelligence software and applications include a range of tools. Some BI

applications are used to analyze performance, projects, or internal operations, such
as AQL - Associative Query Logic, Scorecarding, Business activity monitoring,
Business Performance Management and Performance Measurement, Business
Planning, Business Process Re-engineering, Competitive Analysis, User/End-user
Query and Reporting, Enterprise Management systems, Executive Information
Systems (EIS), Supply Chain Management/Demand Chain Management, and
Finance and Budgeting tools.

Other BI technologies are used to store and analyze data, such as Data
mining (DM), Data Farming, and Data warehouses; Decision Support Systems
(DSS) and Forecasting; Document warehouses and Document Management;
Knowledge Management; Mapping, Information visualization, and Dashboarding;
Management Information Systems (MIS); Geographic Information Systems (GIS);
Trend Analysis; Software as a service (SaaS) Business Intelligence offerings (On
Demand) — which is similar to traditional BI solutions, but software is hosted for
customers by a provider[3]; Online analytical processing (OLAP) and
multidimensional analysis, sometimes called "Analytics" (based on the "hypercube"
or "cube"); Real time business intelligence; Statistics and Technical Data Analysis;
Web Mining; Text mining; and Systems intelligence. Other BI applications are used
to analyze or manage the "human" side of businesses, such as Customer
Relationship Management (CRM) and Marketing tools and Human Resources
applications.

Business intelligence tools

Business intelligence tools are a type of application software designed to

help the business intelligence (BI) business processes. Specifically they are
generally tools that aid in the analysis, and presentation of data. While some
business intelligence tools include ETL functionality, ETL tools are generally not
considered business intelligence tools. Currently organizations are starting to see
that data and content should not be considered separate aspects of information
management, but instead should be managed in an integrated enterprise approach.
Enterprise information management brings Business Intelligence and Enterprise
Content Management together.

Types of business intelligence tools

• Digital Dashboards - Also known as Business Intelligence Dashboards,

Enterprise Dashboards, or Executive Dashboards, these are visually-
based summaries of business data that show at-a-glance understanding
of business conditions through metrics and Key Performance Indicators
(KPIs). A very popular BI tool that has arisen in the last few years.
• Online Analytical Processing: Commonly known as OLAP (including
HOLAP, ROLAP and MOLAP)- a capability of some management,
decision support, and executive information systems that supports
interactive examination of large amounts of data from many
perspectives.[1]
• Reporting software generates aggregated views of data to keep the
management informed about the state of their business.
• Data mining - extraction of consumer information from a database by
utilizing software that can isolate and identify previously unknown
patterns or trends in large amounts of data. There are a variety of data
mining techniques that reveal different types of patterns.[2]. Some of the
techniques that belong here are Statistical methods (particularly Business
statistics) and Neural networks as very advanced means of analysing
data.
• Business performance management (BPM)
Open Source & Free Business Intelligence Products

• Freereporting.com: Free Web-based BI software application by LogiXML

• Eclipse BIRT Project: Eclipse-based open source reporting for web
applications, especially those based on Java EE.
• OpenI: simple web application that does OLAP reporting
• Palo (OLAP database): Memory-based OLAP Server (MOLAP) with
interface to Microsoft Excel, .NET, PHP, Java and C++
• Pentaho: enterprise-class reporting, analysis, dashboard, data mining
and workflow capabilities
• RapidMiner (formerly YALE): open-source software for intelligent data
analysis, knowledge discovery, data mining, predictive analytics, and
machine learning useful for business intelligence applications.
• SpagoBI: a Business Intelligence Free Platform which uses many FOSS
tools as analytical engines, integrating them in an infrastructure which
offers a cross-operativeness and a consistent vision between
Report,OLAP,Data Mining,Dashboard and over the DWH.

Uses of Business Intelligence:

Business intelligence usage can be categorized into the following categories:

1. Business operations reporting

The most common form of business intelligence is business operations reporting.

This includes the actuals and how the actuals stack up against the goals. This type
of business intelligence often manifests itself in the standard weekly or monthly
reports that need to be produced.
2. Forecasting

Many of you have no doubt run into the needs for forecasting, and all of you
would agree that forecasting is both a science and an art. It is an art because one
can never be sure what the future holds. What if competitors decide to spend a
large amount of money in advertising? What if the price of oil shoots up to $80 a
barrel? At the same time, it is also a science because one can extrapolate from
historical data, so it's not a total guess.

3. Dashboard

The primary purpose of a dashboard is to convey the information at a glance. For

this audience, there is little, if any, need for drilling down on the data. At the same
time, presentation and ease of use are very important for a dashboard to be useful.

4. Multidimensional analysis

Multidimensional analysis is the "slicing and dicing" of the data. It offers good
insight into the numbers at a more granular level. This requires a solid data
warehousing / data mart backend, as well as business-savvy analysts to get to the
necessary data.

5. Finding correlation among different factors

This is diving very deep into business intelligence. Questions asked are like, "How
do different factors correlate to one another?" and "Are there significant time
trends that can be leveraged/anticipated?"

Conclusion:

Business Intelligence is a process for increasing the competitive advantage of a

business by intelligent use of available data in decision making. The purpose of
Business Intelligence tools is to maximize an organization’s competitive advantage
from the data within its reach. Business intelligence usually refers to the
information that is available for the enterprise to make decisions on. Business
intelligence also includes the insight gained from doing data mining analysis, as
well as unstructured data .

Reference:

1. Hans Peter Luhn, “Business Intelligence System” IBM Journal ,1958 .

2. http://searchdatamanagement.techtarget.com
3. http://www.ctxm.com/igaming/bi/
4. http://www.eti.hku.hk/eti/web/govern/bi/
5. www.Wikipedia.com

Author:
Prof. R. MOHANASUNDARAM & Prof. M. KUMARAVEL VSB Engineering
College Karur