BUSINESS INTELLIGENCE: CONCEPTS, COMPONENTS,

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Journal of Theoretical and Applied Information Technology 2005 - 2009 JATIT. All rights reserved.www.jatit.orgBUSINESS INTELLIGENCE: CONCEPTS, COMPONENTS,TECHNIQUES AND BENEFITSJAYANTHI RANJANInstitute of Management Technology,Ghaziabad, Uttar Pradesh, IndiaEmail: jranjan@imt.eduABSTRACTFor companies maintaining direct contact with large numbers of customers, however, a growing numberchannel-oriented applications (e.g. e-commerce support, call center support) create a new datamanagement challenge: that is effective way of integrating enterprise applications in real time. To learnfrom the past and forecast the future, many companies are adopting Business Intelligence (BI) tools andsystems. Companies have understood the importance of enforcing achievements of the goals defined bytheir business strategies through business intelligence concepts. It describes the insights on the role andrequirement of real time BI by examining the business needs. The paper explores the concepts of BI, itscomponents, emergence of BI, benefits of BI, factors influencing BI, technology requirements, designingand implementing business intelligence, and various BI techniques.A specialized field of business intelligenceknown as competitive intelligence focuses solelyon the external competitive environment.Information is gathered on the actions ofcompetitors and decisions are made based on thisinformation. Little if any attention is paid togathering internal information.INTRODUCTIONBusiness intelligence (BI) has two basic differentmeanings related to the use of the termintelligence. The primary, less frequently, is thehuman intelligence capacity applied in businessaffairs/activities. Intelligence of Business is anew field of the investigation of the applicationof human cognitive faculties and artificialintelligence technologies to the management anddecision support in different business problems.In modern businesses, increasing standards,automation, and technologies have led to vastamounts of data becoming available. Datawarehouse technologies have set up repositoriesto store this data. Improved Extract, transform,load (ETL) and even recently EnterpriseApplication Integration tools have increased thespeedy collecting of data. OLAP reportingtechnologies have allowed faster generation ofnew reports which analyze the data. Businessintelligence has now become the art of siftingthrough large amounts of data, extractingpertinent information, and turning thatinformation into knowledge upon which actionscan be taken.The second relates to the intelligence asinformation valued for its currency and relevance.It is expert information, knowledge andtechnologies efficient in the management oforganizational and individual business. Therefore,in this sense, business intelligence is a broadcategory of applications and technologies forgathering, providing access to, and analyzingdata for the purpose of helping enterprise usersmake better business decisions. The term implieshaving a comprehensive knowledge of all of thefactors that affect the business. It is imperativethat firms have an in depth knowledge aboutfactors such as the customers, competitors,business partners, economic environment, andinternal operations to make effective and goodquality business decisions. Business intelligenceenables firms to make these kinds of decisions.The paper explores the concepts of BI, itscomponents, emergence of BI, benefits of BI,factors influencing BI, technology ligence, cultural imperatives, and various BItechniques. The paper would be useful for60Vol 9. No 1. (pp 060 - 070)1.

Journal of Theoretical and Applied Information Technology 2005 - 2009 JATIT. All rights reserved.www.jatit.orgbudding researchers in the field of BI tounderstand the basic concepts.BUSINESS INTELLIGENCEStackowiak et al. (2007) define Businessintelligence as the process of taking largeamounts of data, analyzing that data, andpresenting a high-level set of reports thatcondense the essence of that data into the basisof business actions, enabling management tomake fundamental daily business decisions. (Cuiet al, 2007) view BI as way and method ofimproving business performance by providingpowerful assists for executive decision maker toenable them to have actionable information athand. BI tools are seen as technology thatenables the efficiency of business operation byproviding an increased value to the enterpriseinformation and hence the way this informationis utilized.(Golfarelli et.al, 2004) defined BI that includeseffective data warehouse and also a reactivecomponent capable of monitoring the timecritical operational processes to allow tacticaland operational decision-makers to tune theiractions according to the company strategy.(Gangadharan and Swamy, 2004) define BI asthe result of in-depth analysis of detailedbusiness data, including database and applicationtechnologies, as well as analysis practices.(Gangadharan and Swamy, 2004) widen thedefinition of BI as technically much broadertools, that includes potentially encompassingknowledge management, enterprise resourceplanning, decision support systems and datamining.Zeng et al. (2006) define BI as “The process ofcollection, treatment and diffusion ofinformation that has an objective, the reductionof uncertainty in the making of all strategicdecisions.”Experts describe Businessintelligence as a “business management termused to describe applications and technologieswhich are used to gather, provide access toanalyze data and information about an enterprise,in order to help them make better informedbusiness decisions.”BI includes several software for Extraction,Transformation and Loading (ETL), datawarehousing, database query and reporting,(Berson et.al, 2002; Curt Hall, 1999)multidimensional/on-line analytical processing(OLAP) data analysis, data mining andvisualization.3.COMPONENTS OF BI.OLAP (On-line analytical processing): Itrefers to the way in which business users canslice and dice their way through data usingsophisticated tools that allow for the navigationof dimensions such as time or hierarchies. OnlineAnalytical Processing or OLAP providesmultidimensional, summarized views of businessdata and is used for reporting, analysis, modelingand planning for optimizing the business. OLAPtechniques and tools can be used to work withdata warehouses or data marts designed forsophisticated enterprise intelligence systems.These systems process queries required todiscover trends and analyze critical factors.Reporting software generates aggregated viewsof data to keep the management informed aboutthe state of their business. Other BI tools areused to store and analyze data, such as datamining and data warehouses; decision supportsystems and forecasting; document t; mapping, information visualization,(Tvrdíková, 2007) describes the basiccharacteristic for BI tool is that it is ability tocollect data from heterogeneous source, topossess advance analytical methods, and theability to support multi users demands.Zeng et al. (2006) categorized BI technologybased on the method of information delivery;reporting, statistical analysis, ad-hoc analysisand predicative analysis.The concept of Business Intelligence (BI) isbrought up by Gartner Group since 1996. It isdefined as the application of a set ofmethodologies and technologies, such as J2EE,DOTNET, Web Services, XML, data warehouse,OLAP, Data Mining, representation technologies,etc, to improve enterprise operation effectiveness,support management/decision to achievecompetitive advantages. Business Intelligence bytoday is never a new technology instead of an61Vol 9. No 1. (pp 060 - 070)2.integrated solution for companies, within whichthe business requirement is definitely the keyfactor that drives technology innovation. How toidentify and creatively address key businessissues is therefore always the major challenge ofa BI application to achieve real business impact.

Journal of Theoretical and Applied Information Technology 2005 - 2009 JATIT. All rights reserved.www.jatit.organd dash boarding; management informationsystems, geographic information systems; TrendAnalysis; Software as a Service (SaaS).data mart should look like and each department'sdata mart is peculiar to and specific to its ownneeds. Similar to data warehouses, data martscontain operational data that helps businessexperts to strategize based on analyses of pasttrends and experiences. The key difference isthat the creation of a data mart is predicated on aspecific, predefined need for a certain groupingand configuration of select data. There can bemultiple data marts inside an enterprise. A datamart can support a particular business function,business process or business unit.Advanced Analytics: it is referred to as datamining, forecasting or predictive analytics, thistakes advantage of statistical analysis techniquesto predict or provide certainty measures on facts.Corporate Performance Management (Portals,Scorecards, Dashboards): this general categoryusually provides a container for several pieces toplug into so that the aggregate tells a story. Forexample, a balanced scorecard that displaysportlets for financial metrics combined with sayorganizational learning and growth metrics.A data mart as described by (Inmon, 1999) is acollection of subject areas organized for decisionsupport based on the needs of a given department.Finance has their data mart, marketing has theirs,and sales have theirs and so on. And the datamart for marketing only faintly resemblesanyone else's data mart.Real time BI: It allows for the real timedistribution of metrics through email, messagingsystems and/or interactive displays.Data Warehouse and data marts: The datawarehouse is the significant component ofbusiness intelligence. It is subject oriented,integrated. The data warehouse supports thephysical propagation of data by handling thenumerous enterprise records for integration,cleansing, aggregation and query tasks. It canalso contain the operational data which can bedefined as an updateable set of integrated dataused for enterprise wide tactical decision-makingof a particular subject area. It contains live data,not snapshots, and retains minimal history. Datasources can be operational databases, historicaldata, external data for example, from marketresearch companies or from the Internet), orinformation from the already existing datawarehouse environment. The data sources can berelational databases or any other data structurethat supports the line of business applications.They also can reside on many different platformsand can contain structured information, such astables or spreadsheets, or unstructuredinformation, such as plaintext files or picturesand other multimedia information. A data martas described by (Inmon, 1999) is a collection ofsubject areas organized for decision supportbased on the needs of a given department.Finance has their data mart, marketing has theirs,and sales have theirs and so on. And the datamart for marketing only faintly resemblesanyone else's data mart. Perhaps mostimportantly, (Inmon, 1999) the individualdepartments own the hardware, software, dataand programs that constitute the data mart. Eachdepartment has its own interpretation of what aBI tools are widely accepted as a newmiddleware between transactional applicationsand decision support applications, therebydecoupling systems tailored to an efficienthandling of business transactions from systemstailored to an efficient support of businessdecisions. The capabilities of BI include decisionsupport, online analytical processing, statisticalanalysis, forecasting, and data mining. Thefollowing are the major components thatconstitute BI.Data sources can be operational databases,historical data, external data for example, frommarket research companies or from the Internet),or information from the already existing datawarehouse environment. The data sources can berelational databases or any other data structurethat supports the line of business applications.They also can reside on many different platformsand can contain structured information, such astables or spreadsheets, or unstructuredinformation, such as plaintext files or picturesand other multimedia information.4.ISSUES IN BIExperts View: Experts view BI in differentways. Data warehousing experts view BI assupplementary systems and is very new to them.These experts treat BI as technology platform fordecision support application. The author is ofopinion that to data mining experts BI is set of62Vol 9. No 1. (pp 060 - 070)Data Sources

Journal of Theoretical and Applied Information Technology 2005 - 2009 JATIT. All rights reserved.www.jatit.orgadvanced decision support systems with datamining techniques and applications of algorithms.To statisticians BI is viewed as a forecasting andmultidimensional analysis based tool.analysis relating to their business, particularly infrontline operations. They will come to expect upto date and fresh information in the same fashionas they monitor stock quotes online. Monthlyand even weekly analysis will not suffice. In thenot too distant future companies will becomedependent on real time business information inmuch the same fashion as people come to expectto get information on the internet in just one ortwo clicks.Approaches in Data Warehousing: The mainkey to successful BI system is consolidating datafrom the many different enterprise operationalsystems into an enterprise data warehouse. Veryfew organizations have a full-fledged enterprisedata warehouse. This is due to the vast scope ofeffort towards consolidating the entire enterprisedata. (Berson et.al, 2002) emphasizes that inview of emerging highly dynamic businessenvironment, only the most competitiveenterprises will achieve sustained market success.The organizations will distinguish themselves bythe capability to leverage information about theirmarket place, customers, and operations tocapitalize on the business opportunities.Also in the near future business information willbecome more democratized where end usersfrom throughout the organization will be able toview information on their particular segment tosee how it's performing.So, in the future, the capability requirements ofbusiness intelligence will increase in the sameway that consumer expectations increase. It istherefore imperative that companies increase atthe same pace or even faster to stay competitive.Analysis of right information: Several surveysincluding Gartner, Forrester and InternationalData Centre report that most of the firmsthroughout the globe are interested in investingin BI. It is to be noted that despite majorinvestments in enterprise resource planning(ERP) and customer relationship management(CRM) over the last decade businesses arestruggling to achieve competitive advantage. It isdue to the information captured by these systems.Any corporate would look forward for one goalcalled ‘right access to information quickly’.Hence, the firms need to support the analysis andapplication of information in order to makeoperational decisions. Say for marking ns to customers, firms need rightaccess to information quickly. Implementingsmarter business processes is where businessintelligence influences and influences the bottomline and returns value to any INESSBusiness Intelligence enables organizations tomake well informed business decisions and thuscan be the source of competitive advantages.This is especially true when firms are able toextrapolate information from indicators in theexternal environment and make accurateforecasts about future trends or economicconditions. Once business intelligence isgathered effectively and used proactively thenthe firms can make decisions that benefit thefirms.The ultimate objective of business intelligence isto improve the timeliness and quality ofinformation. Timely and good qualityinformation is like having a crystal ball that cangive an indication of what's the best course totake. Business intelligence reveals:BUSINESS In this rapidly changing world consumers arenow demanding quicker more efficient servicefrom businesses. To stay competitive companiesmust meet or exceed the expectations ofconsumers. Companies will have to rely moreheavily on their business intelligence systems tostay ahead of trends and future events. Businessintelligence users are beginning to demand Realtime Business Intelligence] or near real time 63The position of the firm as incomparison to its competitorsChanges in customer behavior andspending patternsThe capabilities of the firmMarket conditions, future trends,demographic and economic informationThe social, regulatory, and politicalenvironmentVol 9. No 1. (pp 060 - 070)5.6.

Journal of Theoretical and Applied Information Technology 2005 - 2009 JATIT. All rights reserved.www.jatit.org What the other firms in the market aredoingBusinesses realize that in this very competitive,fast paced and ever-changing businessenvironment, a key competitive quantity is howquickly they respond and adapt to change.Business intelligence enables them to useinformation gathered to quickly and constantlyrespond to changes.The Fig.1 presents an understanding of BI. A BIsystem in other words is a combination of datawarehousing and decision support systems. Thefigure also reveals how data from disparatesources can be extracted and stored to beretrieved for analysis. The basic BI functions andreports are shown in fig 1.Fig 1. A basic understanding of BIThe primary activities include gathering,preparing and analyzing data. The data itselfmust be of high quality. The various sources ofdata is collected, transformed, cleansed, loadedand stored in a warehouse. The relevant data isfor a specific business area that is extracted fromthe data warehouse. A BI organization fullyexploits data at every phase of the BIarchitecture as it progresses through variouslevels of informational metamorphosis. The rawdata is born in operational environments, wheretransactional data pours in from every source andevery corner of the enterprise. Therefore, that isthe business intelligent organization vision: Anatural flow of data, from genesis to action. Inaddition, at each step in the flow, the data is fullyexploited to ensure the increase of informationvalue for the enterprise. The challenge for BI, ofcourse, is to build any organization’s vision.7.BENEFITS OF BIBI provides many benefits to companies utilizingit. It can eliminate a lot of the guesswork withinan organization, enhance communication amongdepartments while coordinating activities, andenable companies to respond quickly to changesin financial conditions, customer preferences,and supply chain operations. BI improves theoverall performance of the company using it.The firms have recognized the importance ofbusiness intelligence for the masses has arrived.Some of them are listed below. 64With BI superior tools, now employeescan also easily convert their businessknowledgeviatheanalyticalintelligence to solve many businessissues, like increase response rates fromVol 9. No 1. (pp 060 - 070)Information is often regarded as the second mostimportant resource a company has (a company'smost valuable assets are its people). So when acompany can make decisions based on timelyand accurate information, the company canimprove its performance. BI also expeditesdecision-making, as acting quickly and correctlyon information before competing businesses docan often result in competitively superiorperformance. It can also improve customerexperience, allowing for the timely andappropriate response to customer problems andpriorities.

Journal of Theoretical and Applied Information Technology 2005 - 2009 JATIT. All rights reserved.www.jatit.org valuable market share. Business Intelligence tellswhat a

Business intelligence (BI) has two basic different meanings related to the use of the term intelligence. The primary, less frequently, is the human intelligence capacity applied in business affairs/activities. Intelligence of Busine

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