CHAPTER 12

Business Analytics

CHAPTER OUTLINE

12.1 Managers and Decision Making

12.2 What Is Business Intelligence?

12.3 Business Intelligence Applications for Data Analysis

12.4 Business Intelligence Applications for Presenting Results

12.5 Business Intelligence in Action: Corporate Performance Management

LEARNING OBJECTIVES

1. Explain different ways in which IT supports managerial decision making.

2. Provide examples of different ways that organizations make use of business intelligence.

LEARNING OBJECTIVES (continued)

3. Explain the value that different BI applications provide to large and small businesses.

4. Offer examples of how businesses and government agencies can use different BI applications to analyze data.

LEARNING OBJECTIVES (continued)

5. Explain how your university could use CPM to effect solutions to two campus problems at your university.

Chapter Opening Case

12.1 Managers and Decision Making

Management

The Manager’s Job and Decision Making

Managers have three basic roles

(Mintzberg 1973)

Interpersonal roles

Informational roles

Decisional roles

The Manager’s Job & Decision Making (continued)

Decisions and Decision making

Decision Making Process

Why Managers Need IT Support

The number of alternatives to be considered constantly increases.

Decisions must be made under time pressure.

Decisions are more complex.

Decision makers can be in different locations and so is the information.

A Framework for Computerized Decision Analysis

Problem Structure

The first dimension deals with the problem structure, where the decision making processes fall along the continuum ranging from highly structured to highly unstructured decisions.

Highly structured

Semistructured Higly unstructured

Order entryLoan approval Building new plant

The Nature of Decisions

The second dimension of decision support deals with the nature of decisions

Operational control

Management control

Strategic planning

12.2 What Is Business Intelligence?

Can We Predict the Weather? (IT’s About Business 12.2)

The Scope of Business Intelligence

Smaller organizations:Excel spreadsheets

Larger organizations:Data mining, predictive analytics, dashboards

How Organizations Use BI

Develop few, related BI applications

Data mart

Develop infrastructure to support enterprisewide BI

Enterprise data warehouse

Support organizational transformation

Enterprise data warehouse

12.3 Business Intelligence Applications for Data Analysis

Multidimensional Analysis or Online Analytical Processing (OLAP)

Data Mining

Decision Support Systems

Multidimensional Analysis or Online Analytical Processing (OLAP)

Example of Data Cube

Data Mining

Data

Trends, behaviors, unknown patterns

Data Mining (continued)

Data Mining Used in Targeted Marketing

How Business Intelligence Works

Decision Support Systems (DSS)

DSS capabilitiesSensitivity analysis

What-if analysis

Goal-seeking analysis

DSS Example

12.4 Business Intelligence Applications for Presenting Results

Dashboards

Data Visualization TechnologiesGeographic Information Systems

Real-Time BI

Digital Dashboard (example)

Digital Dashboard (example)

Digital Dashboard Demo

http://www.informationbuilders.com/rfr/qtdemo/AdvVis_ExecDash/AdvVis_ExecDash.html

A Bloomberg Terminal

Management Cockpit

Data Visualization Systems

The Power of Visualization

Even though a picture is “worth a thousand words,” we have to be very careful about just what we are seeing.

Remember, on the Internet, it is

“user beware!”

New York City Police Department Command Center

Data visualization in action

Example of data visualization

Hans Rosling at the TED Talks

Geographic Information System

GIS for existing land use

GISMO

GISMO is a geographic information system developed for the city of Corvallis, Oregon.

Real-Time BI (IT’s About Business 12.4)

Reality Mining

12.5 Business Intelligence in Action: Corporate Performance Management

Chapter Closing Case