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Enterprise Systems & Business

Intelligence - An Introduction

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Learning objectives
Understand the current enterprise system landscape
Understand the need for computerized support of managerial decision
making
Describe the business intelligence (BI) methodology and concepts and
relate them to decision support systems (DSS)
Understand the basic definitions and concepts of data warehouses
Learn different types of data warehousing architectures
Describe the processes used in developing and managing data
warehouses
Explain the role of data warehouses in decision support
Understand the all-encompassing nature of performance management
(BPM) and some of the best practices in planning and management
reporting
Understand the objectives and benefits of business analytics and data
mining, recognize the wide range of applications of data mining
Understand the issues in implementing BI and the relations with other
enterprise systems

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The evolution of Enterprise Systems

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Evolution of Enterprise Systems

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Evolution of Enterprise Systems

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Managements Impetus to Adopt ERP (contd.)

Figure: Information and material flows in a functional business model


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Managements Impetus to Adopt ERP


Functional model led to heavy and overstaffed organizations
incapable of reacting quickly to change
Process business model
Information flows between the operating levels without top
managements involvement
Further impetus for adopting ERP systems has come from
compliance with the Sarbanes-Oxley Act of 2002
Requires companies to substantiate internal controls on all
information

ERP systems

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Managements Impetus to Adopt ERP (contd.)

Information and material flows in a process business model


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ERP functionality (late 90s)

A typical ERP system


provides:
accounting and
controlling,
production management
materials management,
quality management,
plant maintenance,
sales, distribution,
logistics
human resources,
project management.
The function-centric/process-centric model period
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The ERP market

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Back to the silos

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Early EAI - Spaghetti integration

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Hub-and-spoke architecture

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Workflows and WfMS

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Workflows and integration

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Business Process Management System (BPMS)


BPMS is a single, unified modeling, integration, and
execution environment that can be applied to the
implementation of literally any business process. [Smith and
Fingar, Internet World, May 2002]
BPMS can be thought of as an engine for processes

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Business Process Management Systems


BPMS allows:
Separation of business process logic from the underlying
applications
Processes are stored in a repository using a standard format, and
the applications can then interact with this common repository
It involves:
Identifying individual tasks that make up the process
The order in which they should be executed
The information that feeds them
The technologies that support them

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Business Intelligence
Maria Iacob

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What is Business Intelligence (BI)?

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Definition of BI
BI is an umbrella term that combines
architectures, databases, analytical tools,
applications, and methodologies.
BI a content-free expression, so it means
different things to different people.
BI's major objective is to enable easy access to
data (and models) to provide business
managers with the ability to conduct data
analysis
BI helps transform data, to information (and
knowledge), to decisions and finally to action.
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BI process

Data

BI

Information

BI

Decision &
Action

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Why is BI necessary?

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Business Environment Factors


FACTOR
Markets

Consumer
demand
Technology

Societal

DESCRIPTION
Strong competition
Expanding global markets
Blooming electronic markets on the Internet
Innovative marketing methods
Opportunities for outsourcing with IT support
Need for real-time, on-demand transactions
Desire for customization
Desire for quality, diversity of products, and speed of delivery
Customers getting powerful and less loyal
More innovations, new products, and new services
Increasing obsolescence rate
Increasing information overload
Social networking, Web 2.0 and beyond
Growing government regulations and deregulation
Workforce more diversified, older, and composed of more women
Prime concerns of homeland security and terrorist attacks
Necessity of Sarbanes-Oxley Act and other reporting-related legislation
Increasing social responsibility of companies
Greater emphasis on sustainability
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Business PressuresResponsesSupport Model

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What is the architecture of BI


system?

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A High-level Architecture of BI

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The Architecture of BI
A BI system has four major components:
a data warehouse, with its source data
business analytics, a collection of tools for manipulating,
mining, and analyzing the data in the data warehouse;
business performance management (BPM) for monitoring
and analyzing performance
a user interface (e.g., dashboard)

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Components in a BI Architecture
The data warehouse is the backbone of any
medium-to-large BI system.
Originally, the data warehouse included only historical
data that was organized and summarized, so end
users could easily view or manipulate it.
Today, some data warehouses include access to
current data as well, so they can provide real-time
decision support

Business analytics are the tools that help


users transform data into knowledge (e.g.,
queries, data/text mining tools, etc.).

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Components in a BI Architecture
Business Performance Management (BPM),
which is also referred to as corporate
performance management (CPM), is a portfolio
of applications within the BI framework that
provides enterprises tools they need to better
manage their operations
User Interface (i.e., dashboards) provides a
comprehensive graphical/pictorial view of
corporate performance measures, trends, and
exceptions.
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The Evolution of BI Capabilities

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A Brief History of BI
The term BI was introduced by the Gartner Group in the
mid-1990s
However, the concept is much older

1970s MIS reporting static/periodic reports


1980s Executive Information Systems (EIS)
1990s OLAP, dynamic, multidimensional, ad-hoc
reporting -> coining of the term BI
2005+ Inclusion of AI and Data/Text Mining
capabilities; Web-based Portals/Dashboards
2010s Yet to be seen

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What is Automated
Decision Making?

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Automated Decision Making


A relatively new approach to supporting decision
making
Applies to highly structured decisions
Automated decision systems (ADS)
An ADS is a rule-based system that provides a
solution to a repetitive, operational, managerial
problem in a specific area.
Standard type: used in highly repetitive processes
(e.g., simple-loan approval system) or
Customized: event-driven alerts (unusual events, e.g.
in fraud detection)

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Automated Decision-Making Framework

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Rol van BI
Mission

Strategic decision
making (macro)

Vision

Strategy

Goals

Actions

Operational decision
making (micro)

Operations

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What is BI governance?

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Corporate governance
Corporate governance is the system by which business
corporations are directed and controlled.
The corporate governance structure specifies the distribution
of rights and responsibilities among different participants in
the corporation, such as the board, managers, shareholders
and other stakeholders, and spells out the rules and
procedures for making decisions on corporate affairs.
It provides the structure through which the company
objectives are set, and the means of attaining those
objectives and monitoring performance.
[OECD, Principles of Corporate Governance, 1999]

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Intelligence Creation and Use


Steps Involved
Data warehouse deployment
Creation of intelligence
Identification and prioritization of BI projects
By using ROI and TCO (cost-benefit analysis)
This process is also called BI governance

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BI governance: Intelligence Creation and Use

A Cyclical Process of
Intelligence Creation And
Use

BI practitioners
often follow the
national security
model depicted in
this figure.

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What is the difference


between OLTP and OLAP?

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Transaction Processing vs Analytic Processing


Transaction processing systems are constantly
involved in handling updates (CRUD) to what
we might call operational databases.
ATM withdrawal transaction, sales order entry via an
ecommerce site updates DBs
Online transaction processing (OLTP) handles routine
on-going business
ERP, SCM, CRM systems generate and store data in
OLTP systems
The main goal is to have high efficiency

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Transaction Processing vs Analytic Processing


Online analytic processing (OLAP) systems are
involved in extracting information from data
stored by OLTP systems
Routine sales reports by product, by region, by sales
person, etc.
Often built on top of a data warehouse where the
data is not transactional
Main goal is effectiveness (and then, efficiency)
provide correct information in a timely manner

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What are the CSFs for


BI implementations?

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Successful BI Implementation
Implementing and deploying a BI initiative is a
lengthy, expensive and risky endeavor!
Success of a BI system is measured by its
widespread usage for better decision making
CSFs:
1. Users
2. BI and Business Strategy
3. (nearly) Real-time BI
4. Integration & Security

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1. BI Users
The typical BI user community includes
All levels of the management hierarchy (not just the
top executives, as was for EIS)
Strategic and operational management

A successful BI system must be of benefit to


the enterprise as a whole.

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2. BI and Business Strategy


To be successful, BI must be aligned with the
companys business strategy.
BI cannot/should not be a technical exercise for the
information systems department.

BI changes the way a company conducts


business by
improving business processes, and
transforming decision making to a more
data/fact/information driven activity.

BI should help execute the business strategy


and not be an impediment for it!

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3.Real-time, On-demand BI
The demand for real-time BI is growing!
Is real-time BI attainable?
Technology is getting there
Automated, faster data collection (RFID, sensors, )
Database and other software technologies (agent,
SOA, ) are advancing
Telecommunication infrastructure is improving
Computational power is increasing while the cost for
these technologies is decreasing

Business Activity Monitoring

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4. Other factors for Successful BI


Integration of Systems and Applications
BI must integrate into the existing IS
Often sits on top of ERP, SCM, CRM systems
Integration to outside (partners of the extended enterprise)
via internet customers, vendors, government agencies,
etc.

Security and Privacy


Still an important research topic in BI
How much security/privacy?

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Major BI Vendors
In recent years, the landscape of BI vendors has
changed
Cognos acquired by IBM in 2008
IBM also acquired SPSS in 2009

Hyperion acquired by Oracle in 2008


Business Objects acquired by SAP in 2009

Microstrategy
May be the only independent large BI vendor

Others include Microsoft, SAS, Teradata (mostly


considered a DW vendor)
Swedish/American: Qlikview
Dutch: IBI.com
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Summary

BI definition & motivation


BI history
BI architecture
ADM
BI governance
Success Factors for BI implementation
BI tool vendors & resources

Questions / Comments

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Learning objectives
Understand the current enterprise system landscape
Understand the need for computerized support of managerial decision
making
Describe the business intelligence (BI) methodology and concepts and
relate them to decision support systems (DSS)
Understand the basic definitions and concepts of data warehouses
Learn different types of data warehousing architectures
Describe the processes used in developing and managing data
warehouses
Explain the role of data warehouses in decision support
Understand the all-encompassing nature of performance management
(BPM) and some of the best practices in planning and management
reporting
Understand the objectives and benefits of business analytics and data
mining, recognize the wide range of applications of data mining
Understand the issues in implementing BI and the relations with other
enterprise systems

25/06/16

52

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