Introduction to Business Intelligence 2024/2025 PDF

1 INTRODUCTION TO BUSINESS INTELLIGENCE 2024/2025 1BA Dr. Rihab BOUSLAMA  2 BI Warm-Up Challenge Your client is a retail company that wants to create a system to bet...

1 INTRODUCTION TO BUSINESS INTELLIGENCE 2024/2025 1BA Dr. Rihab BOUSLAMA  2 BI Warm-Up Challenge Your client is a retail company that wants to create a system to better understand customer behavior. Define how you would implement the system and what key metrics you'd focus on.  3 Introduction ▪ Example of scenarios for a retail company ▪ Sales were down in October. Sales ▪ To overcome this problem, some decisions should be made. ▪ But to make the right decision, we need to know: Why have sales dropped? In which product line? In which countries or regions? In the customer portfolio of which sales representatives? In which distribution segment? Wasn't there a similar drop in October of each year?  4 Introduction ▪ Motivation: Each company seeks to improve its decision-making performance by responding to the analysis demands of decision-makers. Experts of the domain, business analysts etc.  5 Definition of Business Intelligence ▪ Definition 1: A generic term that encompasses the applications, infrastructure, tools and best practices that enable information to be accessed and analyzed to improve and optimize decisions and performance. Gartner  6 Definition of Business Intelligence ▪ Definition 2: Business Intelligence is a set of methods, processes, architectures, applications, and technologies that gather and transform raw data into meaningful and useful information used to enable more effective strategic, tactical, and operational insights and decision-making. “Topic Overview: Business Intelligence”, 2008  7 Definition of Business Intelligence ▪ Business? The term “business” does not only mean commercial entities and activities. It has become more general and represents many types of entities and activities (organizations, functional areas or domains). These entities may include: Companies (for profit) and financially related Retail, manufacture, real-estate, financial, sports, media, advertising, entertainment, healthcare, publication, energy, etc. Non-profit organizations, institutions, associations, communities, etc. Government: citizen service, city planning, crime, immigration, etc. Individuals: personal health, exercise, learning, eating, power consumption, etc.  8 Why build a BI system? ▪ Serving information considered strategic: ▪ One of a company's most important assets is the wealth of information it gathers on a day-to-day basis. ▪ Most of this information is inaccessible, or distributed in a multitude of systems. ▪ The BI System is the result of a process which consists of extracting data from operational systems and other sources external to the company, transforming it into management information and making it accessible to users.  9 Why build a BI system? ▪ The BI system provides: ▪ Better access to data ▪ Improved quality of information ▪ Integration of data coming from different systems ▪ Common definition of information ▪ Better access to historical data  10 Why build a BI system? ▪ Challenges: ▪ Understanding users’ needs ▪ Data integrity ▪ Data feed costs ▪ Project scope definition ▪ System performance ▪ Common management rules  11 The DIKW pyramid ▪ DIKW stands for Data, Information, Knowledge and Wisdom  12 The DIKW pyramid ▪ Data: ✓ Raw fact, an unprocessed, uninterpreted value ✓ Can be collected by a measurement tool or present in a Database ✓ Does not allow you to decide which action to take. Example: Last month 1.217 incidents were recorded at the service center. 10 new service providers were employed in the IT department.  13 The DIKW pyramid ▪ Information: ✓ Interpreted data with meaning. ✓ Enables the manager to make a decision or take action. Example: Last month saw a 240% increase in the number of incidents compared with the previous month. The employment of 10 contractors is linked to a temporary increase in workload.  14 The DIKW pyramid ▪ Knowledge: ✓ Information understood ✓ Based on the experiences, ideas, values and opinions of those consulted Example: The load manager can establish a correlation between the arrival of new service providers and an increase in the number of incidents, based on a number of factors.  15 The DIKW pyramid ▪ Wisdom: ✓ General state of mind of final discernment on content and common sense judgment. ✓ Enables to launch actions to adopt the organization, people, processes and tools. Example: The senior organization manager makes long-term and strategic decisions for the IT organization.  16 Steps to build a decision making system planning ETL storage analysis restitution  17 Steps to build a decision making system planning ETL storage analysis restitution Planning: ▪ Planning is the first step to construct an integrated business intelligence system. ▪ Such a project requires solid administration. Example: A manager can have access to the salaries of the employees in his team. However, he cannot see his boss’s. The need for a rigorous security strategy.  18 Steps to build a decision making system planning ETL storage analysis restitution ETL: ▪ Extract: extraction of data from one or more data sources (e.g. text files, Excel, databases, etc.) ▪ Transform: transformation of aggregated data. ▪ Load: load data to the data warehouse  19 Steps to build a decision making system planning ETL storage analysis restitution Storage: ▪ There are several ways of storing data in a data Warehouse ▪ Each has its own advantages and disadvantages ▪ The Business Intelligence database administrator can choose between star schema, flake schema etc.  20 Steps to build a decision making system planning ETL storage analysis restitution Analysis: ▪ All the techniques of statistics, econometrics, data mining and operations research ▪ Often requires advanced statistical skills.  21 Steps to build a decision making system planning ETL storage analysis restitution Restituion: ▪ Dashboard generation is the tip of the iceberg: business intelligence. ▪ This is the part that most users see. ▪ These are generally attractive, intuitive interfaces that enable users, depending on their rights, to consult, annotate and even reports, dashboards, annotate them or even create them themselves.  22 Architecture of a BI system