Why Business Intelligence Is Becoming A Trend

Published Date: 02 Nov 2017

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INTRODUCTION

Business intelligence (BI) is a system that provides value to the organizations on the basis of data and facts. The success of the entrepreneurs for centuries has been to use business common sense. A modern point of view declares that companies use BI to help in the decision making abilities for management purposes and to make sure that important information is exposed at the correct time. Also, computerized systems enable faster and more reliable work. (Nelson, .n.d).

The first part of this report deals with the introduction to business intelligence, its trends and application. The second section explains the dashboard capabilities and their link with business intelligence. The third section demonstrates the problems and benefits of the application of business intelligence systems. The last section gives the overall analysis, recommendations and conclusion.

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Defining BI

Business Intelligence is the methods of receiving benefits from data by giving answers to important queries like how different clients rank, what is the status of business now and if the business continued on that line what scientific trials should be persisted. Companies having strong BI, very powerful decisions can be made. If the decision is based on facts and supported with powerful computerized systems, confident decisions can be made (Nelson .n.d)

Business Intelligence is a vast branch dealing with a number of applications and technologies used for collecting, storing, analysis, and making data accessible to assist entrepreneurs in achieving better decisions (Rossetti, 2006). The term Business Intelligence was coined in September 1996, when Gartner Group report stated:

"By 2000, Information Democracy will emerge in forward-thinking enterprises, with Business Intelligence information and applications available broadly to employees, consultants, customers, suppliers, and the public. The key to thriving in a competitive marketplace is staying ahead of the competition. Making sound business decisions based on accurate and current information takes more than intuition. Data analysis, reporting, and query tools can help business users wade through a sea of data to synthesize valuable information from it - today these tools collectively fall into a category called "Business Intelligence." (Rossetti, 2006)

Business Intelligence includes different ways of storing and utilizing business information. It comprises of various technologies, applications and ways for gathering, combining, analyzing and representing business data. It is also called BI, Data mining, MIS and decision support system. (Schneider, n.d)

Business Intelligence is an umbrella term that deals with different processes, practices and applications that assist the fact based decision making in organizations. In a nutshell it is defined as a set of approaches for collecting, storing and interpreting and making data accessible to achieve better decisions. (What is Business Intelligence (BI)? 2013)

Business Intelligence Terms

Ad Hoc Query – Capability of creating an instant request to obtain information with the help of analytical reporting system to give answer to particular question of business.

Atomic data – the highest level of information in the data warehouse.

Data – information based in facts for analysis.

Database – A set of data assembled for easy and fast search and recovery.

OLAP – Online Analytical Processing is a type of database software that gives a boundary for the users to quickly access the results in various dimensions of data.

Dashboard – A tool that is used for reporting and represents main indicators on one screen that consist of measurements, scorecards and metrics.

EIS – Enterprise Information System – It is a type of application used to represent and interpret company and outside data for different managerial reasons.

ETL – Extract, Transform and Load –It includes three stages in the middle of data warehousing. The first stage involves taking out data from different sources. The next stage involves its transformation into the correct type. The last stage involves loading data into data warehouse.

Institutional performance management – the procedure of basing the decisions and activities of an organization on real calculated results of performance. It includes presentation measures, aims and benchmarks to get accurate results. (Dave, n.d.)

BI is the combination of collecting and storing data and managing knowledge with investigative tools to represent intricate internal and aggressive information to those making decisions. (Stjerne, n.d.)

"Business intelligence (BI) is a set of methodologies, processes, architectures, and technologies that transform raw data into meaningful and useful information. It allows business users to make informed business decisions with real-time data that can put a company ahead of its competitors. Traditionally, core features like reporting and analytics have been the focus of BI technology choices, but as those features get commoditized, a whole new set of possibilities has emerged. Forrester's BI research shows that the technology is evolving and that enterprises on the cutting edge of these new trends can gain competitive advantage in their industries." (Stjerne, n.d.)

Why Business Intelligence is becoming a trend

A number of companies are now using Business intelligence. For these companies Business intelligence is not only good to have but it has now become necessary in order to excel in the marketplace. These companies cannot even live without business intelligence. (Wixom and Watson, 2010).

The organizations that use business intelligence employ it in their business environment. The working procedures and business intelligence combination are completely independent and have an effect on one another. Business intelligence brings a change to working criteria in groups, individually and in enterprise. People tend to follow the guidelines of business intelligence during work. Business intelligence goes further from the limits of organizations and is used to join and inform clients and suppliers. (Watson, 2010)

Application of Business Intelligence

Companies apply Business intelligence to achieve knowledge that is data driven on all business linked performances. It is utilized to comprehend and enhance performance and scale down costs and find out new business chances. This also includes:

Interpreting behaviors of clients, their patterns of buying and trends of sales.

Quantifying, following and predicting performance on sales and finances.

Planning for finances by making a budget and forecasting.

Keeping a check on the performance of marketing strategies

Enhancing delivery and efficiency in supply chain

Analytics of Internet and e-commerce

Supervising the client relationship

Interpretation of risk (Data visualization, 2013)

DASHBOARD CAPABILITIES AND VISUALIZATION

Definition and Concept

Dashboards are the tools for diagnosing that are used to give busy managers a fast analysis of the performance of a company. As a concept, they are old and reports show that they have been excessively used for businesses. A recent survey done by Gartner Inc. gathered that dashboards are coming in place of reporting and as-hoc analysis in organizations based in West. (Sallam, 2011)

Dashboards are a specific kind of system that supports decision making (Arnott and Pervan, 2005) and can be termed as "a visual and interactive performance management tool that displays on a single screen the most important information needed to achieve one or several individual and/or organizational goals, allowing the user to identify, explore, and communicate problem areas that need corrective action" (Yigitbasioglu and Velcu, 2012, p. 4).

Relationship of Dashboard with BI and its working

The relationship of dashboard with Business Intelligence is that it is a tool used for visualizing data that shows the latest condition of metrics and key performance indicators (KPIs) for a project. Dashboards are used to combine and assemble numbers, metrics and often performance cards on one screen. They can also be used specifically for one role and show metrics aimed for one department. The important characteristics of Business Intelligence dashboard product consists a tailored boundary and capability to drag original data from different sources. (Rouse, 2010)

Some vendors of BI dashboards include Microsoft and Oracle. Also applications like Excel can be used to create BI dashboards. BI dashboards are often called enterprise software too. There is sometimes confusion between the business intelligence dashboard and performance scorecard. The distinguishing feature between them is that business intelligence dashboard is like a dashboard of a car that shows the status at a particular point whereas a performance scorecard shows gradual progress towards particular goals. The designs for business intelligence dashboard and performance scorecards are rapidly converging. A scoreboard is a product that converge scorecards and dashboards. (Rouse, 2010)

Technological Benefits and Challenges for organizations

In the section of accommodation, the challenges of enhancing business intelligence abilities are huge but same is the situation with the potential benefits. Following are the benefits of Intelligence business dashboard capabilities:

Ability to arrange, customize and deal with all types of business intelligence material in a company’s dashboard.

Ability to interpret information on a company’s dashboard and exchange the results

Ability to combine on a company’s dashboard with marginal notes and comments.

Accessibility and dealing with various dashboards irrespective of the variety of language and places

Ability to make interactive dashboards and send them to foreign audience. (Creative interactive dashboards from a variety of data sources, n.d.)

Following are the challenges for organizations using Business Intelligence:

Unsuccessful in identifying the projects of business intelligence as cross-organizational enterprise of business

Business sponsors that are not engaged or sponsor that have no power in enterprise.

Business representatives are not available

Less trained staff available or using sub-optimal workers.

The idea of releasing a software is not present

The structure for breaking down of work is not present i.e. there is no proper method

The activities for consistency and business interpretation are absent.

The effect of fowl data on the profit of a business receives no appreciation.

No comprehension for the need of and utilization of meta-data

Heavily relying on dissimilar techniques and tools. This is called the silver bullet syndrome. (Atre, 2003)

ORGANIZATIONAL IMPACT

Problems of using Business Intelligence systems

Problem 1: Unknown field for users

This problem is quiet new for business intelligence field. The issue is that the last consumers of the results of business intelligence are unaware of the applications and technologies. Such a scenario is not found in other areas. This is because the consumers of CRM process are aware of all the relevant terminologies and tools.

Problem 2: Rate of Prototypes

To eradicate the first issue a number of business intelligence practitioners suggest utilizing 5 to 10% of the budget of the project in order to make a pilot. These pilot needs to be made at the earlier stages of the project. Often they are created before the budget for the project is approved. The reason behind this is that sometimes the quantification of the benefits of the solution of business intelligence is difficult.

Problem 3: Costly Infrastructure

Another problem with business intelligence is that the infrastructure for solutions is too costly. This shows that both the software and work for a simple business intelligence solution is expensive. Even worse is that the fact that users get little or no benefit from the system till the reach the end of the project. This can be compared with constructing a house with a number of resources but no one can gain benefit from it until the construction is complete.

Problem 4: Inflexible Project Methodologies

Another major problem with the business intelligence projects is that the techniques utilized can combine all the previously mentioned problems and make them even worse. Also there are various people working at different areas with hand-offs amongst them. This leads to difficulty in adaptability to change and results in issues of software.

Problem 5: Inertia

When all the issues above combine, it shows that creating a business intelligence solution is not easy. So for projects that require fast results to singular problems, business intelligence is not accurate for them. (The Problem with Traditional Business Intelligence Projects, n.d.)

Strategic, Tactical and Operational Business Intelligence

Strategic

Consistent enhancement of decision making abilities are utilized to lessen down the costs and increase the profits

Interpret, analyze and optimize business activities and relations

Improved apparatus for knowledge workers

Tactical

Multidimensional interpretation

Ad-hoc and What if conditions

Interpretative abilities of "slice and dice" and "drill-down"

Instinctive user boundary

Functional

Sales

Marketing

Finance

Operation

HR

IT

(Tree and Co., n.d.)

CONCLUSION

Recommendations

Plan if you are prepared for Business Intelligence Standardization

If an organization wants to gain success in its business intelligence strategy, it needs to have a proper business maturity. If the users of IT and business know the advantages of BI and have undergone previous projects of BI that were successful then your organization is prepared for business intelligence consistency. But, if there is inactivity on both the sides then there is a need to drive a cultural change at managerial level.

Lessen the Problem

As different business intelligence projects increase various measures can be taken to minimize the cost of Business Intelligence fragmentation:

• Conduct a review of previous projects of business intelligence. Find out the cost and advantages of previous projects of business intelligence.

• Formulate a case for consistency. On the basis of your research, form a powerful business case for consistency to make sure sufficient resources for the project are there.

• Create explicit criteria. Provide a consistent collection of non-overlapping tools to meet the BI requirements of the company.

• Begin implementing the standard. Enforce a system for making sure the utilization of consistent tools, like analysis of project or budget.

Make a long Business Intelligence Plan

To make sure that you get maximum advantage of business intelligence, it is important that you enforce a long term plan with these steps:

• Create a trustworthy relationship between the users of IT and business. At the combining point of IT and business organizations is business intelligence. The reason behind the failure of many BI strategies in companies is due to their history of mistrust.

• A business intelligence center of excellence (COE) should be enforced. A business intelligence COE is used to create and exchange best activities in an organization. Preferably, center’s head should be a business person, and together with the IT and various other departments it should report to the essential business sections. An office for managing the program can be utilized as the initial step to making a complete COE.

• Support the beginning steps of Business intelligence around BI initiatives around a structure. Plot the present Business intelligence functionality with the technological, practical and organizational requirements of the organization.

• Enforce a proper method of business intelligence. Enforce a complete method for implementing business intelligence that explains the duty of various groups giving coverage to the technological as well as user oriented stage of the lifecycle of the entire project.

• Make consumption and purchase procedure. Make sure that the financial inducements are made to endorse the business utilization of COE.

Sell the Strategy

The largest challenge for a business intelligence consistency project is when a company does not put in much effort and time in dealing actively with the aims and status of the project.

• Check and converse the enforcing plan. Continuously foresee the advantages of business intelligence and of the consistency project.

• Evade general hurdles to the business intelligence project. Find out the major problems and utilize them as development chances. (Elliott, nod)

Conclusions

Hence in today’s world the companies have an asset of accumulated information that has been collected for the past decade. Business intelligence seeks to find and expose the value and worth of the information assets but unfortunately it is not enforced is some organizations strategically. By looking forward to all the recommendations mentioned in this report, many companies can create a business intelligence plan on the basis of its standards, COE and a collection of factual methods of the project. In this way the companies can earn huge sums of money for the company with less seller and support prices and efficient utilization of the company’s information assets. (Elliott, nod.)