Introduction to Business Intelligence

Introduction to

Business Intelligence

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Centrum för Affärssystem

Gruppen för Ekonomistyrning

Agenda

I t

t i BI

• Interest in BI

• Definitions

• Drivers

Business Intelligence (BI) as process

BI – from a single dimension to multiple

dimensions definitions…

• Data is gathered and stored, transformed to information by analysis and then to knowledge to support decisions

Business Intelligence (BI) as product

• BI is relevant information and knowledge that enables

organizations to predict the behavior of their internal and external environment with a degree of certainty

Business Intelligence (BI) as product and process

• A combination of the above

Business Intelligence (BI) as a set of technologies

• Technology used in the BI processes that create the product BI

Source: Shollo & Kautz, 2010

Business Intelligence (BI) is a broad term

Gartner derived definitions…

Business Intelligence (BI) is a broad term

• applications, technologies and infrastructure and • best practices which are used to

• gather, provide access to, and analyze data and information about company operations.

BI is analysis of information which enable

BI is analysis of information which enable

• Decision Making

• Performance Management and Control

BI is a business development issue

Action

Action

The aim of BI is to help you to build

relevant knowledge for decision making and action

Knowledge

Knowledge

Decision

Decision

Action

Action

Data

Data

Information

Information

Knowledge

Knowledge

Scorecards and

Scorecards and

Dashboards

Dashboards

Scorecards and

Scorecards and

Dashboards

Dashboards

Why did it happen? Why did it happen?

Analytics

Analytics

Why did it happen? Why did it happen?

Analytics

Analytics

Reporting

Reporting

Reporting

Reporting

What will happen? What will happen?

Forecasting

Forecasting

What will happen? What will happen?

Access Layer WEB Portal and Scorecard

Example of architecture for BI

Analysis Reporting Data Warehouse Internal Data Sources External Data Sources Extract , Transform and Load Data Layer

BI is not only technology and applications

Business Business CentricCentric

Business Strategy Performance Management Analytic Applications - Strategy driven - Analyst driven Process People Business Business CentricCentric

Driving Forces of BI

1. Change of profession and more users of BI

Th l f t ll h i

• The role of controllers are changing

• More users of Business Intelligence increases demand for knowledge

2. Business Intelligence fragmentation

• ERP and/or BI alone is not the solution • Integration of the subject area and IT

• Holistic approaches to business control – Corporate Performance Management

3. Strategic Performance Management Emerging

• Balanced Scorecard and Management Accounting innovations are becoming widely used in organizations

4. Technology drives development

The Controllers’ focus must change…

Has to manage time...

A continuous shift towards value creation

Cost Control

and

Follow-up

Control

and

Value Creation

g

Book-keeping Reporting Follow-up/ Control

Decision support

Business

Development Strategy

Increasing number of users…

Source: TDWI, 2010

More users of BI

Improving organizations

by providing business

y p

g

insights to all employees

leading to better, faster,

more relevant decisions

ANALYSIS a ctiv it y Advanced Analysis & Ad Hoc OLAP Analysis • Ad Hoc Analysis • Predictive Analysis • Data Mining

• Slice & Dice Investigative Analysis

Different users have different needs

REPORTING MONITORING s in g A n al y tics & User Inter a OLAP Analysis Enterprise Reporting Scorecards & Dashboards

• Slice & Dice Investigative Analysis

• Root Cause Determination

• Page-perfect Operational Reporting

• Pixel-perfect Business Reporting

• Print-perfect Statements & Invoices

• Operational Dashboards • Dynamic Scorecards • Metrics Management Increa s Alerting & Proactive Notification

Increasing Number & Range of Users

Information Analysts • Business Managers • All Workers • Extranets • Customers

• Metrics Management

• Massive Report Distribution

• Exception-based Alerts

Source: MicroStrategy

Companies are standardizing on fewer vendors

BI Fragmentation

• Average number of BI tools in the enterprise is ~13 • 2 out of 3 companies plan to move to enterprise BI solutions

Strategy Execution is problematic

Only 5% of the work force understands the strategy

The Vision Barrier

understands the strategy

60% of organization don’t link budgets to strategy Only 25% of managers have

incentives linked to strategy

85% of executive teams spend less than one hour per

month discussing strategy

9 of 10 companies fail

to execute strategy

The People Barrier The Management Barrier

The Resource Barrier

Source: Presentation av David Norton, 1999:The Balanced Scorecard: Translating Strategy into Action Today’s Management Systems Were Designed to Meet The Needs of

Stable Industrial Organizations That Were Changing Incrementally You Can’t Manage Strategy With a System Designed for Tactics

Strategy - important input for

performance management

Vision

Perspective

Measure

Strategy

Objective

BI = technology driven development

2002

2009

Source: Gartner Group

Technology drives BI

• The standardization of IT architectures across the organization and the centralization of software platforms amplify the benefits of Web-based applications.

Software as a Service (SaaS)

• Business units that lack strong IT infrastructures should consider a SaaS model where data warehousing and data management are outsourced. WEB GUI for presentation.

Open Source BI Open Source BI

• Sharing of technology, applications and tools over the WEB that you can use for free to build you own BI solutions.

Web 2.0

Web based technology drive BI

Source: Information Builders, 2006

Importance of emerging technologies

The vendors and their focus

•

Mega vendors

Mega vendors

• Integration ERP and BI…

• BI as add on to ERP or BI where ever you are

•

Pure play vendors

• Integration of the BI solution to cover more

• Complementing with new functionality and/or technology • Unstructured data text analysis

• Unstructured data – text analysis

•

Niche vendors

• Exploiting competitive advantage from functionality and/or technology – e.g. in-memory analytics

• Moving to cover more

• Third party solutions and candidates for takeover

The market and the vendors

Source: Gartner, 2011

Predicts of the BI area

• By 2012, business units will be responsible for at least 40% of the BI budget

• Packaged analytic applications – on premise ones and SaaS - will shift power from IT-organizations to business units

• Through 2012, more than 35% of the 5.000 top global companies will fail to make insightful decisions on significant changes in their business

• The financial crisis will reveal which companies that have sound information infrastructure

• By 2010, 20% of organizations will have an industry specific analytic application delivered via SaaS as a standard component in their BI-solution

• Collaborative decision making will emerge as a new product category – combining social software with the BI platform

Predicts of the BI area - cont.d

•

Traditional BI stack versus Data Discovery

• Data discovery tools based on in-memory analytics is delivered by most vendors

• Complement for business users – IT still seem to prefer a single BI platform

•

Shift from measurement to analysis, forecasting and

optimization

• Large vendors are integrating statistical functions and simulation, e.g. IBM Cognos and SAS Institute

• Consumerization of BI

• Mobile solutions with intuitive and fun interfaces, e.g. iPad • Easier for business users to develop mash ups (WEB 2.0)

•

Improved decision making continues to be a strong driver

for investment in BI

Source: Gartner, 2011

Characteristics of the BI area

Rational man

Th i f ti th b tt d i i ki • The more information – the better decision making

Too a large extent, the BI area is supply side driven

• Vendors drive development of BI solutions – often far ahead of regular users…

• Analyst firms are very influential and control what is going to be done (creating bandwagon-effects)

• Many consulting firms wants a piece of the cake

Mega vendors have their R&D activities in North America

g

and use of BI

• Demo cases are normally not adapted to other management models

People put their faith in the “new system”

Technology and infrastructure is in place

Take away…

Technology and infrastructure is in place

• Supply side driven area with vendors investing in technology • Best practice experience is pre packaged

Some barriers for pervasive use of BI

• People

• Lack of user adoption

• Little cooperation between the business and IT people

• Processes

• Unclear business requirements and mis-alignment of BI and business

• Integration issues

• Business areas and decentralization