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DECISION SUPPORT TOOLS

Lecture 3: Multi-Dimensional Data Analysis

Module Outline
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Management Decision-Making Multi-Dimensional Data Analysis

Stair, Reynolds & Chesney 124-125 & 219-221

Group and Executive Support Systems Model-based Decision Support Systems Intelligent Systems Knowledge Management Managing Decision Support Tools

Business Intelligence (BI)

What is Business Intelligence?

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Business Intelligence is
A broad category of applications and technologies for gathering, storing, analysing, and providing access to data, to help enterprise users make better business decisions. BI applications include the activities of decision support systems, query and reporting, online analytical processing (OLAP), statistical analysis, forecasting, and data mining. Definition from TechTarget.com

Relate BI to decision support

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Intelligence stage (of decision-making)

Becoming aware of the problem (or opportunity) Defining the problem details and scope

Design stage
Identifying alternative solutions Evaluating feasibility of each solution

Choice stage
Deciding on the best solution

Internal or external data? Actual or estimated values?

Knowledge Discovery

Multi-dimensional data analysis

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OLAP and Data Mining Explores the relationship between multiple variables
Usually at least three variables involved Relies on large data sets Usually has a time component

Graphical display aids understanding

Identifies patterns occurring in data

Can provide a basis for developing mathematical models

On-Line Analytical Processing (OLAP)

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Initiated by users Reveals relationships between data items Detects trends Clarifies problem definition Easy to use
Visual interface Flexible Drill-down

NOT done on operational database

Example of OLAP output

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Slice and dice views

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Different people may have different interests in the same dataset

OLAP vs standard DBMS queries

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Quick to compose, run and modify No programming skills needed Visual output is more user friendly Key measures are already calculated OLAP structure can be used to build models (e.g. financial) Can provide input to other applications (e.g. performance management)

Equivalent Excel functions

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Pivot tables Pivot charts Statistical analysis

Correlation Multiple regression Analysis of variance Cluster analysis

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18 months & R10 million

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The business value of Supply Chain Intelligence enabled by a Global Procurement Intelligence solution would be derived through:
The ability to identify, measure, manage and report procurement spend, price and consumption variances, trends and cost pressures across the group as well as by providing contract and vendor spend visibility; The ability to drive group cost optimisation through best practice sourcing strategies; Risk identification and mitigation capability; Visibility and standardisation of consolidated spend and related policies; and Data consolidation across the group, aligned to budgets and expenditure forecasts.

Moving on to Data Mining

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Automated process to extract information from large data sets

Only as effective as the data it uses

Relies on advanced logical, statistical and mathematical techniques Infers rules and relationships that allow the prediction of future results
But cant explain underlying reasons

How is data mining being used in SA?

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CRM and direct marketing Customer and product planning Fraud detection Credit scoring Benefits include:
Customer attraction and retention Product design Bad debt reduction Bank robbery prediction Product cross-selling

Comparing OLAP and data mining

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Characteristic
Purpose

OLAP
Supports data analysis and decision making

Data Mining
Supports data analysis and decision making

Type of analysis Top-down, query-driven data Bottom-up, discovery-driven supported analysis data analysis Skills required of user Must be very knowledgeable Must trust in data mining about the data and its tools to uncover valid and business context worthwhile hypotheses

Web mining
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Web Content Mining

Extraction of information from documents and databases

Web Structure Mining

Link structures within the Internet, most frequently visited paths etc

Web Usage Mining

Analyses data from the actions of Internet users (web and proxy server logs, user sessions, user profiles, registration data, cookies, bookmarks, mouse clicks etc.)

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And thats all for today