Business Intelligence Literature Review

Running head: BUSINESS INTELLIGENCE 1

Business Intelligence

Liberty University

Audrey Dodson

May 10, 2013

BUSINESS INTELLIGENCE 2

Abstract

The business environment is constantly changing and organizations need reliable, accurate, and

effective business information to meet consumer’s needs for growth and sustainability. Business

intelligence is a method employed by companies to assist in analyzing and presenting data for

more informed decision making. The term business intelligence is relatively new, but the system

evolves from decision support systems (DSS), executive information systems (EIS), and

management information systems (MIS) over a period of forty years. Business intelligence

refers to applications and technologies for consolidating, analyzing, and providing access to vast

amounts of data to help users make better operational and strategic decisions. A business

intelligence system will help facilitate better business decisions and improve business

performance optimizing value for the organization.


Business Intelligence

With the advancement of technology, consumers have become more sophisticated. The

expectations of consumers’ needs for service and products are creating new challenges and

growth opportunities for companies. The business environment is constantly changing and

organizations need reliable, accurate, and effective business information to meet consumer’s

needs for growth and sustainability. Business intelligence is one method employed by

companies to assist in analyzing and presenting data for more informed decision making.

What is Business Intelligence?

The term business intelligence is relatively new, but the system evolves from decision

support systems (DSS), executive information systems (EIS), and management information

systems (MIS) over a period of forty years (Negash, 2004). Business intelligence refers to

applications and technologies for consolidating, analyzing, and providing access to vast amounts

of data to help users make better operational and strategic decisions. Business intelligence is a

computer-based system that combines data gathering, data storage, and knowledge management

with analytical tools to make complex internal information and competitive information readily

available to planners and decision makers. A business intelligence system will help facilitate

better business decisions and improve business performance optimizing value for the

organization (Paladino & Williams, 2008). Being data driven, the technology combines data

gathering, data storing, with analysis to provide input in the form of reports. The reports are

used for decision making, identification of new opportunities, estimating and predicting, and

operational inefficiencies. Typical uses for business intelligence are financial budgeting,

planning and forecasting, sales and marketing, performance management, service and support,

risk analysis, E-Commerce, predictive monitoring, cost reduction. The essential components of


business intelligence are real-time data warehousing, business analytics, and user interface

(Negash, 2004).

Data Warehousing

Data warehousing is the heart of the business intelligence system. The data warehouse

holds data that has been extracted from operational systems and made available as historical

information for ad-hoc queries and reports. Within the data warehouse relevant information

(data) is clustered together for easier access, and grouped according to time periods. Once the

data is placed in the data warehouse, it is not updated; the data remains as historical records.

Included in the data warehouse are organized and summarized historical data and current data.

Combined, this information provides real-time decision support. The data warehouse handles the

integration of data from all data sources. The following diagram illustrates the process of

extracting, transforming, and loading data from other data sources to the data warehouse for

reporting and analysis (Sastry, 2013).

(Diagram1: Data Warehouse Overview, 2013)


End users generate reports and create queries to retrieve information from the data warehouse.

(Zangaglia, 2006). The benefits of the data warehouse are:

Improved end-user access to relevant data

Increased data consistency

Lower computing costs/increased productivity

Single source combining data from separate sources

Infrastructure supports changes in computer systems and business structures

End-users can perform ah-hoc queries and reports without impacting the performance of

operational systems

Business Analytics

Technological advances have impacted the world at large, particularly the business

world. Massive amounts of data are being gathered and stored, and technology has been

developed to transform data into useable information for better decision making. It is now

possible to apply advanced analytical methods to business matters that were not possible two

decades ago. Business analytics refers to skills and technologies that enable end-users to explore

current and past business performance to make better decisions. Business analytics allows

business-end users-to work with the data and information in a data warehouse by using various

tools and techniques. The tools and techniques that are available to end users are reports and

queries, advanced analytics, and data mining. With reports and queries end users are able to

generate various adhoc reports, and build queries that allow them to drill down to details.

Advanced analytics includes financial, statistical, and mathematical tools used to analyze

information and data. With data mining end users are able to search for information in the data

warehouse using predictive analytics or statistics (Lim, Chen, & Chen, 2013).


User Interface

User interface refers to parts of a computer that the end-user see, hear, touch, or talk to.

Overall, the user interface allows communication between the computer and the end-user. With

the business intelligence system, end users are able to utilize dashboards to view performance

indicators, trends, and exceptions. They are able to integrate information from business units in

different areas or locations. With the dashboard, end users are able view graphs of actual

performance compared to metrics to see the health of the company (Isik, Jones, & Sidorova,

2011).

Rationale for Business Intelligence

There are numerous reasons why businesses employ business intelligence. Four of the

most common reasons why businesses implement business intelligence are to inform, engage,

align, and optimize value. Businesses need information that is readily available for decision

making, growing revenue, predicting outcomes, and remaining competitive (Ranjan, 2008).

Inform

Information is one of the most important assets of a business. With advanced technology,

access to information is crucial due to the growth of the internet, consumer sophistication and

needs, and competition. Reliable and accurate information is also needed for understanding,

operating, and increasing business performance. Business intelligence delivers the much needed

information through reports that can be customized, dashboards, maps, charts, and graphics.

Thus reliable and accurate information is delivered to the right person at the time it is needed

(Jones, Ramakrishnan, & Sidorova, 2012).


Engage

Delivering relevant information timely is important, but the key to receiving relevant

information promptly are the users of the information. End-users must be engaged in exploring,

analyzing and using the information; they must know what to look for, where to obtain the

information, and understand the strategic implications of the information. Business intelligence

gives users the ability to analyze situations immediately and consider possible outcomes (Isik,

Jones, & Sidorova, 2011).

Align

The overall goal of business intelligence is to help organizations implement a better

decision support system. The decision support system should align tactical and strategic goals,

and combine business processes across organizational boundaries. This requires alignment of

executive management with functional departments (Isik, Jones, & Sidorova, 2011).

Optimize

A business intelligence system should be constructed to address both current and future

requirements of the organization. With the right architecture, the solution can evolve with the

needs of the organization, without placing extra burden on IT departments and additional costs

(Herring, 1988).

Business Intelligence Implementation

Before business intelligence can be implemented five important areas-solution

requirements, organizational structure and executive sponsorship, project scope and risk

tolerance, information technology capability, and source system-must be addressed. These

issues must be addressed in the planning process of project. Once all areas have been addressed,

http://www.businessintelligencestrategy.com.au/what-is-business-intelligence/why-use-it/


the best way to implement the project is explored. Finally, the areas are consolidated to align

with the strategy of the organization and implementation (Zangaglia, 2006).

Solution Requirements

Information gathering is based on business objectives and measures important to the

entire organization; this includes the company, business units, departments, and functional areas.

These measures are taken to ensure that the technology is in line with the requirements of the

project and risks are mitigated (Jones, Ramakrishnan, & Sidorova, 2012).

Sponsorship and Organizational Structure

Addressing this requirement is very important because of the overall impact to the

organization. Executive sponsorship is important due to cash flow and budgets; and support of

the project from the top down. Other levels of management and employees are apt to support the

project also. The IT function is also important to the success of the project due to IT capabilities

and decision making-centralized or decentralized (Jones, Ramakrishnan, & Sidorova, 2012).

Project Scope and Risk

The scope of the business intelligence project can be limited due to budget restraints.

And as shown in the “solutions requirements” section, it is important and necessary to plan for

success. Planning concerns the scope of the project-duration, budget, risk, and organizational

participation. If the solution requirements are not adequate, there is the risk of not meeting the

needs of the business and the scope of the project; and risks in designing, implementing, and

maintaining the business intelligence system (Zangaglia, 2006).

Information Technology Capability

The staffing requirements for building and maintaining a BI system must be considered

by the organization. Because the IT staff will handle many of the roles in implementing the BI


system, it is necessary for the organization to ensure that their IT staff is equipped to handle the

job; and that training is available if necessary. Consistent and accurate information from the BI

system will be used to make critical decisions; therefore, the BI system must be reliable and

dependable (Negash, 2004).

Source System

Implementation of the BI system is impacted by the number, size, and types of source

systems that will be integrated. The more data sources to be integrated the more complex data

standardization, extraction, conformance, and transformation. Consideration is also given to the

various file formats of the source systems. It is detrimental for source systems to be addressed in

the “solution requirements” section and planned for accordingly (Negash, 2004).

Business Intelligence Objectives

The objectives in implementing BI are to provide a new approach to data management,

presentation, and analytics. Business intelligence will enable AT&T to:

Access and retrieve financial, sales, customer, employee, vendor, distributor, marketing,

and functional data from a single source.

Give secure access of relevant data to all levels of management and business units.

Dedicate time to data analysis and decision making to increase revenue growth and retain

customers, and employees.

Make pertinent data, reports, and analysis available to end users.

Have access to external factors-tracking customer satisfaction and buying patterns.

Improve internal processes.

Have the tools and information pertinent to job performance.


Research and explore the relationships among data to extract data and new insights in

operating the company.

A business intelligence team will implement and roll out the new system. The team will ensure

that data conversion and data warehousing are consistent with the needs of current and future

goals of the company. Clean current data and historical data will be stored in data warehousing.

For reporting, end users will have access to dashboards, adhoc reports, and queries. End users

will have access to data analysis tools. Extensive training will be provided for all end users.

Each of these enhancements to data management will increase reporting accuracy and timeliness,

allow and enable predictive analysis and data modeling. Decision makers will have readily

available information that is accurate and integrated-a single source (Zangaglia, 2006).

Implementing business intelligence will enable an organization to collect and effectively

use information to improve the value of the company. The new system will give the end users

easy access to the information they need and the ability to analyze and share this information

with others. BI will provide insights that will help the company make better decisions. It allows

scrutiny of business operations to find new opportunities enhancing the company’s competitive

advantage; and for eliminating or amending expenses (Ranjan, 2008).

There are not many organizations that have embraced the potential that business

intelligence offers. When aligned with the strategic goals of the organization, the data retrieved

from the business intelligence system optimizes the value of the company and creates an

advantage (Paladino & Williams, 2008). Implementing business intelligence will enable an

organization to become proactive and enhance the company’s ability to change with the business

as external factors-society, economy, environment, and market-change (Ranjan, 2008). Overall,

business intelligence will help companies understand their internal capabilities, trends, future


directions in the markets, technologies, regulatory environment, actions of its competitors and

what the actions imply. The business intelligence system allows management to see detailed and

current data on all aspects of the business. This information helps them to make decisions based

on fact. The system provides real-time reports that identify sales trends, product improvements,

customer preferences, and opportunities; and is a valuable asset for negotiations with vendors,

suppliers, and distributors. Business intelligence converts data into useful information, and

through human analysis, into knowledge. The following tasks are performed by a business

intelligence system (Isik, Jones, & Sidorova, 2011)

Creating forecasts based on historical data, current and past performance, and predictions

about the future.

Analytics “what if” of the impacts of changes and alternatives.

Queries and adhoc reporting to answer non-routine questions.

Implementing the new business intelligence system will help organizations create better

knowledge environments for assessing revenue growth, eliminating and amending expenses to

reduce costs, identifying opportunities for innovation, training to increase employee retention,

and market share. Business intelligence offers easy creation and consumption of reports,

reliable, accurate, and secure delivery of information, and a user friendly interface. By using this

management technique, an organization will have a single source for information for

international and domestic business units. The collaborated information helps organizations

understand the company capabilities, performance and position in the market, and customers,

and competitors creating a competitive advantage, revenue growth, and sustainability (Negash,

2004).


Application of Business Intelligence

Business intelligence provides useful insight, supports decision-making, and drives

performance of the organization. Some industries that currently use business intelligence are

retail, insurance, banking, finance, telecommunications, manufacturing, restaurants, and

healthcare. Hardee’s, Wendy’s, and T.G.I. Friday’s use business intelligence in making

decisions of what new products to add to their menus, which products to remove, and which

stores to close. Continental Airlines and First American Corporation implemented business

intelligence to increase the return on their investments and to improve customer loyalty (Jones,

Ramakrishnan, & Sidorova, 2012). Another company, Hess, an oil and gas company uses

business intelligence to facilitate collaboration among its global employees. The company uses a

tool that integrates digital elevation models, digital satellite imagery, and GPS data of different

geographic locations. The tool takes the data and shows end users the areas where the company

is considering construction, processing, and oil and export facilities. This technology saves the

development department time and money because it eliminates the need for site visits (Nash,

2008).

Revenue Growth

With the advancement of globalization, organizations have domestic and international

business units; utilizing business intelligence provides and improves the timeliness and quality of

information for decision making and operations. Business intelligence provides solutions to

gather the data necessary for optimal performance. Instead of being dependent on the IT

department to run special reports on a monthly basis, end users will be able to run reports

whenever the reports are needed with real-time data (Paladino & Williams, 2008).


Costs Reduction

Conducting business internationally is different than conducting business domestically.

Each country has its own business and country culture. It is important for companies to

understand the norms and culture of the country it does business in and make readily available

real time information that will assist with day to day operations, and decision making. With

business intelligence, companies will be able to extract data from all data sources. End users at

each business unit will have access to the same data to run reports and queries as needed. Cash

deficits can be identified early on and can be adjusted to lessen the impact on cash flow.

Analysis of inflows and outflows of cash can be readily viewed to see how the company utilizes

it resources; and to assess expenses that can be amended or eliminated (Paladino & Williams,

2008).

Market Share

Consumers have become more sophisticated and their immediate need for services and

products are creating new challenges and opportunities for growth. An understanding of

consumer or customer preferences is critical to revenue growth and customer satisfaction and

retention. With business intelligence, dashboards can be created and used to collect information

from other applications or data sources giving a more in depth view of financial, marketing,

sales, billing, accounts receivable, accounts payable, and other functions within the company.

Changes in performance can be identified and rectified (Paladino & Williams, 2008).

Innovation

Revenue growth is dependent on sales; therefore companies must create value for

customers by creating new products and increasing or amending product lines and services.

Business intelligence imports internal and external data. Companies will be able to generate


reports on the usage patterns of customers that can be used to enhance current strategies, and to

track consumer buying behavior and trends. The analysis will help the company create new

products to meet consumer demands (Zangaglia, 2006).

Employee Retention

Employee retention is vital to companies because it lowers expenses, helps attract quality

new hires, and it enhances productivity and employee morale. High employee turnover increases

recruitment and training expenses of the company. Employee retention also boosts the image

and brand of the company. Business intelligence will enable employees to share information

across departments, and to have information needed to perform jobs and increase productivity

(Harison, 2012).

Source Selection

The sources for the literature review of Business Intelligence were selected based on the

following questions:

1. What is business intelligence?

2. Why do organizations implement business intelligence systems?

3. What are the business justifications for business intelligence?

4. What barriers are attributable to organizations’ reluctance to implement business

intelligence?

5. What are the requirements for implementation and deployment of business intelligence

systems?

6. What are the core components of business intelligence?

7. What are the benefits of business intelligence?


8. What risks are involved in developing, implementing, and deploying business

intelligence?

9. How does business intelligence help with the decision making process?

10. Is globalization supported by business intelligence?

These questions, when answered, should allow a deeper understanding of the subject; how it

evolved, who uses it, why it is used, and how it is used by organizations. All of these factors will

justify why companies implement business intelligence to enhance decision making.

Questions for Further Research

Several questions of interest sparked by the literature review of business intelligence are:

1. One of the contemporary business management techniques is business intelligence.

What is the difference in the business intelligence management technique and the

business intelligence system?

2. Will the advent of business intelligence systems, require employees to be have more

technical and analytical skills?

3. Because business intelligence systems release employees from dependency on the IT

department, will IT jobs be lost or outsourced?

4. How are global organizations affected by real-time information with the difference in

time zones? Will what is real-time information for a domestic company today be real-

time information for the global business unit today (their today is our tomorrow or vice

versus)?

5. Can business intelligence be used with other business management techniques to

optimize company value?


6. What is the relationship of business intelligence, cloud computing, and mobile

computing?

7. What is the future outlook for business intelligence?

As a result of the review, the above questions will be researched in hopes of finding answers,

measured against findings in the literature review information to better understand how business

intelligence is used and its future. The literature review on business intelligence was informative

and interesting.

Conclusion

Faster decision cycles, competitive pressures to capture new opportunities, customer

sophistication, the continuing need to adjust to an ever changing business environment, and

globalization are driving demand for business intelligence and analytics that better support

decision making. BI systems deliver vital data and provide the raw material for standard and

adhoc reporting and analytics (Harison, 2012).

Professionals responsible for designing, developing, and deploying business intelligence

systems, must make sure that BI, analytics, and data warehousing (DW) systems are aligned with

the organization strategy, and are responsive to business needs. The business intelligence

systems should also release end-users from being dependent on the IT department.

Business intelligence should address and enable effective decision making at operational,

tactical, and strategic levels (Isik, Jones, & Sidorova, 2011).

Data is an integral element of business intelligence of which business decisions are based.

The best decision cannot be made if organizations do not know the history of the business, where

the business currently stands, and where the business is going. Business intelligence can be used

to eliminate guesswork. Accurate and reliable information and analysis of data eliminates the

http://tdwi.org/Articles/2013/01/04/Achieving-Greater-Agility-with-Business-Intelligence-Executive-Summary.aspx?Page=1


need to guess, providing companies real time trends or updates which are necessary for

predictive analysis (Nandi, 2012).

Business intelligence helps business leaders stay informed of the progress toward

organizational goals through metrics to measure or benchmark the performance of the business

and of employees. With business intelligence (tools), companies are able to see customer buying

behavior. This information can be leveraged for innovation; offering products and services that

customers need. The information can also be used to eliminate or change products or services

that can no longer be sold (Jones, Ramakrishnan, & Sidorova, 2012).

By integrating data from all data sources into a single source, relevant data is accessible

to all business units, departments, or functional areas. Communications are smoother; processes

are simplified, and operational efficiency is improved. Successful implementation and

deployment of business intelligence systems are dependent on leadership and managerial

support, organizational culture or structure, preparation and planning, and IT capabilities. The

major value from the use of business intelligence is the ability of end-users to process and

analyze existing data in new ways, and gain insight about the current conditions and activities of

the company. The system directly supports decision making within the organization, and helps

to evaluate operations effectiveness (Harison, 2012).

Utilization of a Business Intelligence system has helped companies improve their return

on investments. Business intelligence has been used to identify cost cutting measures, discover

new business opportunities, create a single data source for reporting and predictive analysis, and

enabled companies become more innovative by quickly reacting to consumer demands and

optimizing pricing. Besides having readily available data, business intelligence helps leverage

company negotiations by making it easier to quantify the value of supplier and customer


relationships. Business intelligence also aids companies in focusing on decisions by optimizing

business processes-discovering inefficiencies and making adjustments for improvement.

Organizations that identify and make adjustments to inefficient processes are in a much better

position to remain competitive (Harison, 2012).

The keys to having a successful business intelligence system are preparing and planning

for the new system by gathering all relevant information. Relevant information should be based

on business objectives or critical success factors of the organization. Executive support is

necessary so that other management levels and functional departments will also support the

project. Consideration should be given to the IT department’s staffing capabilities. If staffing is

not adequate, training and development of the team should take place, or hiring consultants who

are qualified to work in conjunction with the team will be necessary. These measures will help to

make sure that the business intelligence system is reliable and dependable. The data retrieved by

end-users must be accurate for better decision making. Because of the enormous volume of data

from various sources, consideration should be given to the number of sources, size, and type. All

of the data has to be standardized, extracted, conformed, and transformed before it can be used

by end-users. Other measures that should be considered prior to developing a business

intelligence system are to analyze how management executives make decisions; to assess what

information is needed by management to make better decisions; the quality of the data, and to

assess performance metrics relevant to the business. The successful use of business intelligence

has the potential to transform businesses by improving decision making, providing a single data

source for reporting, identifying inefficient business processes, cost savings, and new business

opportunities (Sastry, 2013).


References

Diagram1: Data Warehouse Overview. (2013). Retrieved from

http://www.opensourcebc.com/enterprise-data-management/data-warehouse

The diagram of a data warehouse is beneficial in giving the reader a visual

to go with the written business intelligence review literature.

Harison, E. (2012). Critical success factors of business intelligence system implementations:

evidence from the energy sector. International Journal of Enterprise Information

Systems, 8(2), 1. doi:http://dx.doi.org.ezproxy.liberty.edu/10.4018/jeis.2012040101

This source is useful in identifying the pros and cons of implementing a business

intelligence system. Possible technical, personal, and organizational factors can inhibit

the successful development, implementation, and use of the business intelligence system.

Herring, J. P. (1988). Building a business intelligence system. Journal of Business Strategy, 9(3),

4-9. Retrieved from http://www.emeraldinsight.com.ezproxy.liberty.edu:2048

This article shades light on the requirements and considerations of constructing a

business intelligence system. It also addresses the risks of building an inadequate

infrastructure.

Isik, O., Jones, M., & Sidorova, A. (2011). Business intelligence (BI) success and the role of BI

capabilities. Intelligent Systems in Accounting, Finance & Management, 18(4), 161-176.

doi:10.1002/isaf.329

This resource focuses on one of the main reasons for failure of the business

intelligence system. It addresses the critical success factors that define the success of the

project and offers findings of successful applications of business intelligence.

http://www.opensourcebc.com/enterprise-data-management/data-warehouse


Jones, M., Ramakrishnan, T., & Sidorova, A. (2012). Factors influencing business intelligence

(BI) data collection strategies: An empirical investigation. Decision Support Systems,

52(2), 486-496. Retrieved from

http://sciencedirect.com/science/article/pii/S0167923611001722

There are many internal and external factors that influence the purpose of an

organization’s selection of business intelligence and how it is developed to fit the

strategic goals of the company. This resource will help in understanding business

intelligence selection, and how data is collected, retrieved, and used in decision making,

reporting, and communication.

Lim, E., Chen, G., & Chen, H. (2013). Business intelligence and analytics: Research directions.

ACM Transactions on Management Information Systems (TMIS), 3(4).

doi:10.1145/2407740.2407741

The majority of the literature for business intelligence states the current status of

business intelligence. This resource looks to the future to show how business intelligence

will answer the needs of enterprises, computing industry, and the research community.

Nandi, V. T. (2012). Maintaining database: Business intelligence tool for competitive advantage.

Business Intelligence Journal, 5(2), 352-357.

This resource is helpful in giving information to maintain the business

intelligence system after implementation. The business intelligence system must be

accurate, reliable, and flexible. It should be constructed so that the costs of updates and

new construction of components are minimized.

Nash, K. (2008). Gas prices: How oil companies use business intelligence to maximize profits.

CIO. Retrieved from


http://www.cio.com/article/375365/Gas_Prices_How_Oil_Companies_Use_Business_Int

elligence_to_Maximize_Profits

The literature from this resource profiles how oil companies use business

intelligence, how long the oil companies have been using business intelligence, and the

success of business intelligence for oil companies. This resource helps to confirm the

preparations and considerations that must be addressed in order for a company to

successfully deploy and use business intelligence.

Negash, S. (2004). Business intelligence. Communications of the Association for Information

Systems, 13(1), 177-195. Retrieved from http://aisel.aisnet.org/cais/col13/iss1/15

This resource is helpful in understanding the objective-to improve the timeliness

and quality of inputs for decision making-of business intelligence. Data is the key

ingredient for decision making and must be accurate and reliable for userability.

Paladino, B., & Williams, N. (2008). Moving strategy forward: Merging the balanced scorecard

and business intelligence. Business Performance Management Magazine, 6(2), 12-17.

Retrieved from http://search.proquest.com/docview/218349922?accountid=12085

This resource shows how business intelligence can be used in conjunction with

the balanced scorecard management technique for trend analysis, predictive analytics,

customr data integration, scorecards, and data mining for better performance

optimization.

Ranjan, J. (2008). Business justification with business intelligence. Vine, 38(4), 461-475.

doi:10.1108/03055720810917714

This resource is important in understanding the various business environment

changes which impacts justification of businesses turning to business intelligence.


Utilizing it as a means for improved decisions making, predictive analytics, and reporting

for continuous growth, sustainability, and competitive advantage.

Sastry, H. (2013). Implementing a successful business intelligence framework for enterprises.

Journal of Global Research in Computer Science, 4(3), 55-59. Retrieved from

http://www/jgrcs.info/index.php/jgrcs/article/view/619

This resource is useful in assessing the various tasks that are necessary in

designing and deploying business intelligence, requirements and risks.

Zangaglia, P. (2006). Business intelligence deployment strategies: A pragmatic pattern-based

appoach. Business Intelligence Journal, 11(3), 52-63. Retrieved from

http://search.proquest.com/docview/222624782?accountid=12085

This resource is helpful in understanding that business intelligence is not a one

size fit all application. Guidelines for developing and deploying the business intelligence

system are based on specific organizational constraints. Evaluating issues and constraints

are important for the planning process of the project.

Documents

Business Intelligence Literature Review