Business Intelligence and
Analytics: Systems for Decision
Support
(10th Edition)
Chapter 1:
An Overview of Business
Intelligence, Analytics, and
Decision Support
Plan of the Book
Part I - Decision Making and
Analytics: An Overview
(Chapters 1 & 2)
Part II - Descriptive Analytics
(Chapters 3 & 4)
Part III - Predictive Analytics
Chapters 5 - 8
Part IV - Prescriptive Analytics
Chapter 9 - 12
Part V - Big Data and Future
-2 Directions for Business Analytics
Copyright © 2014 Pearson Education, Inc.
Changing Business Environmen
Computerized Decision Support
Companies are moving aggressively
to computerized support of their
operations Business Intelligence
Business Pressures–Responses–
Support Model
Business pressures result of today's
competitive business climate
Responses to counter the pressures
Support to better facilitate the process
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Business Pressures–
Responses–
Support Model
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The Business Environment
The environment in which
organizations operate today is
becoming more and more complex,
creating
opportunities, and
problems.
Example: globalization.
Business environment factors:
markets, consumer demands,
technology, and societal…
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Business
Factors Environment
FACTOR DESCRIPTION
Markets 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
Consumer Desire for customization
demand Desire for quality, diversity of products, and speed of delivery
Customers getting powerful and less loyal
Technology More innovations, new products, and new services
Increasing obsolescence rate
Increasing information overload
Social networking, Web 2.0 and beyond
Societal 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
-6 Greater Copyright
emphasis© on sustainability
2014 Pearson Education, Inc.
Organizational Responses
Be Reactive, Anticipative, Adaptive,
and Proactive
Managers may take actions, such as
Employ strategic planning.
Use new and innovative business models.
Restructure business processes.
Participate in business alliances.
Improve corporate information systems.
… more [in your book]
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Closing the Strategy Gap
One of the major objectives of
computerized decision support is to
facilitate closing the gap between
the current performance of an
organization and its desired
performance, as expressed in its
mission, objectives, and goals, and
the strategy to achieve them.
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Managerial Decision Making
Management is a process by which
organizational goals are achieved
by using resources.
Inputs: resources
Output: attainment of goals
Measure of success: outputs / inputs
Management Decision Making
Decision making: selecting the best
solution from two or more
alternatives
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The
WorkNature of Managers’
Mintzberg's
Roles 10 Managerial
Interpersonal
1. Figurehead
2. Leader Decisional
3. Liaison االتصال 7. Entrepreneur
واالرتباط 8. Disturbance handler
9. Resource allocator
Informational 10. Negotiator مفاوض
4. Monitor
6. Spokesperson
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Decision-Making Process
Managers usually make decisions
by following a four-step process
(a.k.a. the scientific approach)
1. Define the problem (or opportunity)
2. Construct a model that describes the
real-world problem.
3. Identify possible solutions to the
modeled problem and evaluate the
solutions.
4. Compare, choose, and recommend a
potential solution to the problem.
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Information Systems Support
for Decision Making
Group communication and
collaboration
Improved data management
Managing data warehouses and Big
Data
Analytical support
Overcoming cognitive limits in
processing and storing information
Knowledge management
Anywhere, anytime support
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The Concept of DSS
DSS - interactive computer-based
systems, which help decision makers
utilize data and models to solve
unstructured problems
(Gorry and Scott-Morton, 1971)
Decision support systems couple the
intellectual resources of individuals with
the capabilities of the computer to
improve the quality of decisions.
DS as an Umbrella Term
Evolution of DS into Business Intelligence
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Definition of BI
BI is an umbrella term that combines
architectures, tools, databases, analytical
tools, applications, and methodologies
BI is 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 analysis
BI helps transform data, to information
(and knowledge), to decisions, and finally
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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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A
BI High-Level Architecture of
Data Warehouse Business Analytics Performance and
Environment Environment Strategy
Data Technical staff Business users Managers / executives
Sources Built the data warehouse Access
Data
ü Organizing Warehouse BPM strategy
ü Summarizing Manipulation
ü Standardizing Results
User Interface
Future component - browser
intelligent systems - portal
- dashboard
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