Unit 2 - Business Intelligence

Business intelligence (BI) moves past raw data.  It is a collection of decision support technologies for the organization with the purpose of making more informed decisions.  It allows for businesses to analyze their raw data and use it to make improved decisions which achieve strategic goals.  It is incredibly helpful to businesses because the organization can have a much deeper understanding of the customer. BI systems will not only aid in the ease of tracking a customer’s dollar purchases but will also track other things like what types of items the customer usually purchases and what they might purchase in the future. BI used to be limited to select groups that had the financial capital to afford it. Now that the cost of acquiring and storing large amounts of data has decreased, many businesses have been taking advantage of the benefits that BI systems provide.

Benefits

If used correctly, BI can save money by allowing a company to effectively meet its customer’s needs. The business is able to not only identify what the customer wants but how often the customer will want it. It can also help with other aspects of the company such as logistics. Companies can truly see what is going on with the company.  For example, Pfizer uses an Informix Corp.'s ETL tool, Ardent Datastage, to create a distributed database that allows it to see and evaluate sales and product trends (McGeever, 2000).  The access to this information is almost immediate and it allows for quick adjustments to solve problems identified in the data (McGeever, 2000).  With BI, traditional and non-traditional sources of data can be used.  For example, Dallas Teachers Credit Union (DTCU) was able to use geographical data analysis to increase its customer base of potential clients by identifying areas that would likely need the services of a credit union. (McGeever, 2000). 

Another benefit of BI is the ability to create ad-hoc reporting (LogiAnalystics, 2013). “Ad-hoc reporting is a model of BI in which reports are built and distributed by nontechnical end-users” (LogiAnalystics, 2013). While running a company there are many times when answers to questions like, “why have orders dropped from last year versus current year” or “what is our average selling price for XYZ product for ABC customer?” need to be derived quickly.  BI assists companies answer questions like these and give insight as to how to improve business operations as well as the company’s bottom line (LogiAnalystics, 2013).

Costs

Business intelligence is very expensive and high risk.  A single report may cost the business upwards of $20,000 (Standen, 2010) According to Deloitte, some companies actually see BI as a threat to their business (6 Real Life Examples of Successful Business Intelligence Systems, 2014).  To have a successful BI system, the right applications and technologies will need to be utilized. Teams have to be formed and employees are taken away from their primary work load in order to help identify the scope of the BI project, its primary purpose, needs of the end-users, and test the reports for accuracy. Since employees are taken away from their primary responsibilities the company is losing efficiency from their employees to work on business operations (Linthicum, 2013).

Cultural issues

In developed countries, one can easily see the value of BI.  In less developed countries, where some companies are still using paper and pen to record information, it is much more difficult to see the use of these systems. An example would be in Jamaica where sometimes simple data records are not even up to date.  In local law enforcement, some Jamaican citizens are on the roads with as many as thirty citations due to the lack of an adequate data system to keep track of traffic violations. At the Jamaican department of motor vehicles, it is also difficult to understand the archaic ways the organization. The customer is still expected to complete the paperwork by hand and the desk clerk then inputs this information into a computer. This would be an excellent starting point to use a BI system but the culture is just behind the technology curve. To make things more automated and then to move towards BI in Jamaica, the mindset has to change and people will have to be trained.  At the same time, people will be hesitant since they know that technology means a possibility of less human labor is needed.  It will be difficult culturally to move towards BI in environments where simple things like using an ATM machine or paying with debit cards are looked at with suspicion by some citizens.

Implementation issues

It is difficult to get companies to adopt BI.  Creating business intelligence systems does not necessarily mean that they will be utilized.(Tichenor, 2013).  To try to increase adoption, the business should involve employees in every stage of the business intelligence process (Tichenor, 2013).  One example is involving research conducted concerning the adoption of BI systems in Taiwan. It was found that for a BI system to really be effective, the system needs to provide convenient and flexible functions for all users. There should be a transparency of information.  Employees should feel a sense of empowerment and ownership.

It is not easy to justify the expenses of BI to employees.  It is very expensive and may not at first work as expected (Tichenor, 2013).  It is also a process that can take quite a long time to install, build, and deploy. For some larger BI systems, it can take as long as six months. A lack of acceptance by the end user is an issue that can actually cause an increased workload which is the exact opposite of its intended purpose. A way to overcome this is to show how it has worked and how it has improved the organization and thus is beneficial to the organization (Tichenor, 2013). Ensuring that employees can visually see the improvements due to business intelligence is important and can ultimately motivate employees to effectively use the tools developed for the organization’s success.

References:

6 Real Life Examples of Successful Business Intelligence Systems. (2014, June 17). Retrieved from Matillon: http://www.matillion.com/insight/6-real-life-examples-of-successful-business-intelligence-systems/

Chaudhuri, S., Dayal, V., Narasayya, V., (2011). An Overview of Business Intelligence Technology. Communications of the ACM, 54(8), 88-98..

Hou, C., (2014). User Acceptance of Business Intelligence Systems in Taiwan’s Electronic Industry. Social Behavior and Personality, 42(4), 583-596.

Linthicum, D. (2013, August 20). The true cost of integration in the world of BI. Retrieved from http://tdwi.org/Articles/2013/08/20/True-Cost-of-Integration.aspx?Page=1

McGeever, C. (2000, June 24). Business Intelligence. Retrieved from http://www.computerworld.com/s/article/47371/Business_Intelligence?taxonomyId=120&pageNumber=2

N.a. “BI Encyclopedia: Ad-hoc Reporting.” LogiAnalytics. 2013. June 22, 2014.  Retrieved from http://www.logianalytics.com/bi-encyclopedia/ad-hoc-reporting>

Standen, J. (2010, February 8). Estimating the cost of Business Intelligence. Retrieved from http://www.datamartist.com/estimating-the-cost-of-business-intelligence

Tichenor, M. (2013, Septemeber 12). 4 BI Implementation Challenges and How to Overcome Them Retrieved from http://www.logianalytics.com/blog/4-bi-implementation-challenges-and-how-overcome-them

Zeng, L., Ling, L., Duan, L., (2012). Business Intelligence in Business Computing Environment. Information Technology Management, 13, 297-310