1.1 Fundamentals of Business Intelligence

Business Intelligence (BI) is a game-changer for companies. It's all about using data to make smarter choices and stay ahead of the competition. BI helps businesses collect, analyze, and visualize information from various sources.

From sales to HR, BI touches every part of a company. It's not just for tech whizzes - everyone from CEOs to marketing teams can use BI to spot trends, solve problems, and boost performance. BI turns raw data into valuable insights that drive success.

Introduction to Business Intelligence

Concept and scope of BI

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• Encompasses processes, technologies, and tools used to collect, integrate, analyze, and present business information
• Enables data-driven decision making improves business performance and gains competitive advantages
• Includes data sourcing and integration from multiple systems (ERP, CRM, databases)
• Involves data warehousing and data management
• Utilizes data analysis using statistical methods, data mining, and machine learning
• Presents data through visualization and reporting via dashboards, scorecards, and ad-hoc queries
• Covers wide range of business domains and functions
  • Sales and marketing analysis (customer segmentation, campaign effectiveness)
  • Financial analysis (budgeting, forecasting, profitability analysis)
  • Operations and supply chain analysis (inventory optimization, logistics performance)
  • Human resources analysis (workforce planning, employee performance)

Goals and objectives of BI

• Supports data-driven decision making at all organizational levels
  • Provides timely, accurate, and relevant information to decision makers
  • Enables fact-based decisions rather than relying on intuition or guesswork
• Improves business performance and outcomes
  • Identifies opportunities for revenue growth, cost reduction, and process optimization
  • Monitors key performance indicators (KPIs) and takes corrective actions when needed
• Gains competitive advantages through better insights and faster decision making
  • Analyzes market trends, customer behavior, and competitor activities
  • Identifies new business opportunities and innovates products or services
• Enhances organizational efficiency and productivity
  • Automates data collection, integration, and reporting processes
  • Reduces time spent on manual data manipulation and analysis
  • Enables self-service BI for business users to access and explore data independently

Stakeholders and users of BI

• Executive management and decision makers
  • C-level executives (CEO, CFO, COO) use BI for strategic planning and performance monitoring
  • Business unit managers use BI for tactical decision making and operations management
• Business analysts and data scientists
  • Perform advanced data analysis, data mining, and predictive modeling
  • Develop and maintain BI solutions, including data models, dashboards, and reports
• Functional area specialists
  • Marketing analysts use BI for customer analysis, campaign management, and market research
  • Financial analysts use BI for budgeting, forecasting, and financial reporting
  • Supply chain analysts use BI for inventory management, demand planning, and logistics optimization
• IT professionals
  • Manage data infrastructure, including databases, data warehouses, and BI platforms
  • Ensure data quality, security, and performance of BI systems
• End-users and self-service BI consumers
  • Business users across various departments access BI tools for ad-hoc reporting and data exploration
  • Executives and managers use BI dashboards and scorecards to monitor business performance

Data, information, and knowledge in BI

• Data: raw, unprocessed facts and figures collected from various sources
  • Structured data: organized and stored in databases or spreadsheets (sales transactions, customer records)
  • Unstructured data: not organized in a pre-defined manner (text documents, social media posts, images)
  • Semi-structured data: mix of structured and unstructured data (XML, JSON)
• Information: data that has been processed, organized, and given context to make it meaningful and useful
  • BI transforms raw data into actionable information through data integration, cleansing, and analysis
  • Presented in various formats such as reports, dashboards, and visualizations
• Knowledge: understanding and insights gained from analyzing information
  • BI enables users to discover patterns, trends, and relationships in the data
  • Supports decision making, problem-solving, and strategic planning
• Relationship between data, information, and knowledge in BI
  1. Data provides the raw material for analysis
  2. Information results from processing and analyzing data, giving it context and meaning
  3. Knowledge comes from interpreting and applying information, leading to insights and decision making