Chapter 3 Business Analytics and Data Visualization

Chapter 3Chapter 3

Business Analytics Business Analytics and Data Visualizationand Data Visualization

Learning ObjectivesLearning Objectives

Describe business analytics (BA) and its Describe business analytics (BA) and its importance to organizationsimportance to organizations

List and briefly describe the major BA List and briefly describe the major BA methods and toolsmethods and tools

Describe how online analytical processing Describe how online analytical processing (OLAP), data visualization, and (OLAP), data visualization, and multidimensionality can improve decision multidimensionality can improve decision makingmaking

Describe advanced analysis methodsDescribe advanced analysis methods


Describe geographical information Describe geographical information systems (GIS) and their support to systems (GIS) and their support to decision makingdecision making

Describe real-time BADescribe real-time BA Describe how business intelligence (BI) Describe how business intelligence (BI)

supports competitive intelligencesupports competitive intelligence Describe automated decision support Describe automated decision support

(ADS) systems and their benefits(ADS) systems and their benefits


Explain how the Web relates to BAExplain how the Web relates to BA Describe Web intelligence and Web Describe Web intelligence and Web

analytics and their importance to analytics and their importance to organizationsorganizations

Describe implementation issues related to Describe implementation issues related to BA and success factors for BABA and success factors for BA

Business intelligence (BIBusiness intelligence (BI))

The use of analytical methods, either The use of analytical methods, either manually or automatically, to derive manually or automatically, to derive relationships from data relationships from data

The Business Analytics (BA) Field: The Business Analytics (BA) Field: An OverviewAn Overview

The Essentials of BAThe Essentials of BA Analytics Analytics

The science of analysis.The science of analysis. Business analytics (BA) Business analytics (BA)

The application of models directly to business The application of models directly to business data. BA involves using MSS tools, especially data. BA involves using MSS tools, especially models, in assisting decision makers; models, in assisting decision makers; essentially a form of OLAP decision support essentially a form of OLAP decision support


The Business Analytics (BA) Field: An The Business Analytics (BA) Field: An OverviewOverview

MicroStrategy’s classification of BA MicroStrategy’s classification of BA tools: The five styles of BItools: The five styles of BI

1.1. Enterprise reportingEnterprise reporting

2.2. Cube analysisCube analysis

3.3. Ad hoc querying and analysisAd hoc querying and analysis

4.4. Statistical analysis and data miningStatistical analysis and data mining

5.5. Report delivery and alertingReport delivery and alerting


The Business Analytics (BA) Field: An The Business Analytics (BA) Field: An OverviewOverview

SAP’s classification of strategic SAP’s classification of strategic enterprise managemententerprise management

Three levels of supportThree levels of support1.1. OperationalOperational

2.2. Managerial Managerial

3.3. StrategicStrategic


Executive information and support Executive information and support systemssystems

Executive information systems (EIS)Executive information systems (EIS)Provides rapid access to timely and relevant Provides rapid access to timely and relevant information aiding in monitoring an information aiding in monitoring an organization’s performance organization’s performance

Executive support systems (ESS)Executive support systems (ESS)Also provides analysis support, Also provides analysis support, communications, office automation, and communications, office automation, and intelligence support intelligence support


Drill-downDrill-down

The investigation of information in detail The investigation of information in detail (e.g., finding not only total sales but also (e.g., finding not only total sales but also sales by region, by product, or by sales by region, by product, or by salesperson). Finding the detailed salesperson). Finding the detailed sourcessources


Online analytical processingOnline analytical processing (OLAP) (OLAP)

An information system that enables the An information system that enables the user, while at a PC, to query the system, user, while at a PC, to query the system, conduct an analysis, and so on. The conduct an analysis, and so on. The result is generated in seconds result is generated in seconds

Online Analytical Processing (OLAP)Online Analytical Processing (OLAP)

OLAP versus OLTPOLAP versus OLTP OLTP concentrates on processing repetitive OLTP concentrates on processing repetitive

transactions in large quantities and transactions in large quantities and conducting simple manipulationsconducting simple manipulations

OLAP involves examining many data items OLAP involves examining many data items complex relationshipscomplex relationships

OLAP may analyze relationships and look OLAP may analyze relationships and look for patterns, trends, and exceptionsfor patterns, trends, and exceptions

OLAP is a direct decision support method OLAP is a direct decision support method


Types of OLAPTypes of OLAP Multidimensional OLAP (MOLAP)Multidimensional OLAP (MOLAP)

OLAP implemented via a specialized OLAP implemented via a specialized multidimensional database (or data store) multidimensional database (or data store) that summarizes transactions into that summarizes transactions into multidimensional views ahead of time multidimensional views ahead of time


Types of OLAPTypes of OLAP Relational OLAP (ROLAPRelational OLAP (ROLAP))

The implementation ofThe implementation of an OLAP database an OLAP database on top of an existing relational database on top of an existing relational database

Database OLAP and Web OLAP (DOLAP Database OLAP and Web OLAP (DOLAP and WOLAP)and WOLAP)

Desktop OLAPDesktop OLAP



1.1. Multidimensional Multidimensional conceptual view for conceptual view for formulating queriesformulating queries

2.2. Transparency to the userTransparency to the user3.3. Easy accessibility: batch Easy accessibility: batch

and online accessand online access4.4. Consistent reporting Consistent reporting

performanceperformance5.5. Client/server architecture: Client/server architecture:

the use of distributed the use of distributed resourcesresources

6.6. Generic dimensionalityGeneric dimensionality

7.7. Dynamic sparse matrix Dynamic sparse matrix handlinghandling

8.8. Multiuser support rather Multiuser support rather than support for only a than support for only a single usersingle user

9.9. Unrestricted cross-Unrestricted cross-dimensional operationsdimensional operations

10.10. Intuitive data manipulationIntuitive data manipulation11.11. Flexible reportingFlexible reporting12.12. Unlimited dimensions and Unlimited dimensions and

aggregation levelaggregation level

Codd’s 12 Rules for OLAP


Four types of Four types of processing that are processing that are performed by analysts in an organization:performed by analysts in an organization:

1.1. Categorical analysis Categorical analysis

2.2. Exegetical analysis Exegetical analysis

3.3. Contemplative analysis Contemplative analysis

4.4. Formulaic analysis Formulaic analysis

Reports and QueriesReports and Queries ReportsReports

Routine reports Routine reports Ad hoc (or on-demand) reports Ad hoc (or on-demand) reports Multilingual support Multilingual support Scorecards and dashboards Scorecards and dashboards Report delivery and alertingReport delivery and alerting

• Report distribution through any touchpoint Report distribution through any touchpoint • Self-subscription as well as administrator-based Self-subscription as well as administrator-based

distribution distribution • Delivery on-demand, on-schedule, or on-event Delivery on-demand, on-schedule, or on-event • Automatic content personalization Automatic content personalization

Reports and QueriesReports and Queries

Ad hoc queryAd hoc query

A query that cannot be determined prior to A query that cannot be determined prior to the moment the query is issued the moment the query is issued

Structured Query Language (SQLStructured Query Language (SQL))

A data definition and management A data definition and management language for relational databases. SQL language for relational databases. SQL front ends most relational DBMS front ends most relational DBMS

MultidimensionalityMultidimensionality


The ability to organize, present, and The ability to organize, present, and analyze data by several dimensions, such analyze data by several dimensions, such as sales by region, by product, by as sales by region, by product, by salesperson, and by time (four dimensions)salesperson, and by time (four dimensions)

Multidimensional presentationMultidimensional presentation Dimensions Dimensions Measures Measures Time Time


Multidimensional databaseMultidimensional database

A database in which the data are A database in which the data are organized specifically to support easy and organized specifically to support easy and quick multidimensional analysis quick multidimensional analysis

Data cubeData cube

A two-dimensional, three-dimensional, or A two-dimensional, three-dimensional, or higher-dimensional object in which each higher-dimensional object in which each dimension of the data represents a dimension of the data represents a measuremeasure of interest of interest


CubeCube

A subset of highly interrelated data that is A subset of highly interrelated data that is organized to allow users to combine any organized to allow users to combine any attributes in a cube (e.g., stores, products, attributes in a cube (e.g., stores, products, customers, suppliers) with any metrics in customers, suppliers) with any metrics in the cube (e.g., sales, profit, units, age) to the cube (e.g., sales, profit, units, age) to create various two-dimensional views, or create various two-dimensional views, or slicesslices, that can be displayed on a , that can be displayed on a computer screen computer screen



Multidimensional tools and vendorsMultidimensional tools and vendors Tools with multidimensional capabilities often Tools with multidimensional capabilities often

work in conjunction with database query work in conjunction with database query systems and other OLAP tools systems and other OLAP tools



Limitations of dimensionalityLimitations of dimensionality The multidimensional database can take up The multidimensional database can take up

significantly more computer storage room than a significantly more computer storage room than a summarized relational databasesummarized relational database

Multidimensional products cost significantly more than Multidimensional products cost significantly more than standard relational productsstandard relational products

Database loading consumes significant system Database loading consumes significant system resources and time, depending on data volume and resources and time, depending on data volume and the number of dimensionsthe number of dimensions

Interfaces and maintenance are more complex in Interfaces and maintenance are more complex in multidimensional databases than in relational multidimensional databases than in relational databases databases

Advanced Business AnalyticsAdvanced Business Analytics

Data mining and predictive analysisData mining and predictive analysis Data miningData mining Predictive analysisPredictive analysis

Use of tools that help determine the probable Use of tools that help determine the probable future outcome for an event or the likelihood of future outcome for an event or the likelihood of a situation occurring. These tools also identify a situation occurring. These tools also identify relationships and patternsrelationships and patterns

Data VisualizationData Visualization Data visualizationData visualization

A graphical, animation, or video A graphical, animation, or video presentation of data and the results of data presentation of data and the results of data analysis analysis The ability to quickly identify important trends The ability to quickly identify important trends

in corporate and market data can provide in corporate and market data can provide competitive advantagecompetitive advantage

Check their magnitude of trends by using Check their magnitude of trends by using predictive models that provide significant predictive models that provide significant business advantages in applications that drive business advantages in applications that drive content, transactions, or processes content, transactions, or processes

Data VisualizationData Visualization

New directions in data visualizationNew directions in data visualization In the 1990s data visualization has moved In the 1990s data visualization has moved

into:into: Mainstream computing, where it is integrated Mainstream computing, where it is integrated

with decision support tools and applicationswith decision support tools and applications Intelligent visualization, which includes data Intelligent visualization, which includes data

(information) interpretation (information) interpretation




New directions in data visualizationNew directions in data visualization Dashboards and scorecardsDashboards and scorecards Visual analysisVisual analysis Financial data visualizationFinancial data visualization

Geographic Geographic Information Systems (GIS)Information Systems (GIS)

Geographical information system (GIS)Geographical information system (GIS)

An information system that uses spatial An information system that uses spatial data, such as digitized maps. A GIS is a data, such as digitized maps. A GIS is a combination of text, graphics, icons, and combination of text, graphics, icons, and symbols on maps symbols on maps


As GIS tools become increasingly As GIS tools become increasingly sophisticated and affordable, they help sophisticated and affordable, they help more companies and governments more companies and governments understand:understand: Precisely where their trucks, workers, and Precisely where their trucks, workers, and

resources are locatedresources are located Where they need to go to service a customerWhere they need to go to service a customer The best way to get from here to there The best way to get from here to there


GIS and decision makingGIS and decision making GIS applications are used to improve decision making GIS applications are used to improve decision making

in the public and private sectors including:in the public and private sectors including:• Dispatch of emergency vehiclesDispatch of emergency vehicles• Transit managementTransit management• Facility site selectionFacility site selection• Drought risk managementDrought risk management• Wildlife management Wildlife management

Local governments use GIS applications for used Local governments use GIS applications for used mapping and other decision-making applications mapping and other decision-making applications


GIS combined with GPSGIS combined with GPS Global positioning systems (GPS)Global positioning systems (GPS)

Wireless devices that use satellites to enable Wireless devices that use satellites to enable users to detect the position on earth of items users to detect the position on earth of items (e.g., cars or people) the devices are attached (e.g., cars or people) the devices are attached to, with reasonable precision to, with reasonable precision


GIS and the Internet/intranetsGIS and the Internet/intranets Most major GIS software vendors provide Most major GIS software vendors provide

Web access that hooks directly to their Web access that hooks directly to their software software

GIS can help the manager of a retail operation GIS can help the manager of a retail operation determine where to locate retail outletsdetermine where to locate retail outlets

Some firms are deploying GIS on the Internet Some firms are deploying GIS on the Internet for internal use or for use by their customers for internal use or for use by their customers (locate the closest store location) (locate the closest store location)

Real-Time BI, Automated Decision Support, Real-Time BI, Automated Decision Support,

and Competitive Intelligenceand Competitive Intelligence Real-time BIReal-time BI

The trend toward BI software producing real-The trend toward BI software producing real-time data updates for real-time analysis and time data updates for real-time analysis and real-time decision making is growing rapidlyreal-time decision making is growing rapidly

Part of this push involves getting the right Part of this push involves getting the right information to operational and tactical information to operational and tactical personnel so that they can use new BA tools personnel so that they can use new BA tools and up-to-the-minute results to make and up-to-the-minute results to make decisions decisions

Real-Time BI, Automated Decision Real-Time BI, Automated Decision Support, and Competitive IntelligenceSupport, and Competitive Intelligence

Real-time BIReal-time BI Concerns about real-time systemsConcerns about real-time systems

• An important issue in real-time computing is that An important issue in real-time computing is that not all data should be updated continuously not all data should be updated continuously

• when reports are generated in real-time because when reports are generated in real-time because one person’s results may not match another one person’s results may not match another person’s causing confusionperson’s causing confusion

• Real-time data are necessary in many cases for Real-time data are necessary in many cases for the creation of ADS systems the creation of ADS systems


Real-time BIReal-time BI Automated decision support (ADS) or Automated decision support (ADS) or

enterprise decision management (EDM)enterprise decision management (EDM)

A rule-based system that provides a solution A rule-based system that provides a solution to a repetitive managerial problem. Also to a repetitive managerial problem. Also known as enterprise decision management known as enterprise decision management (EDM) (EDM)


Real-time BIReal-time BI Business rulesBusiness rules

Automating the decision-making process is Automating the decision-making process is usually achieved by encapsulating business usually achieved by encapsulating business user expertise in a set of user expertise in a set of business rulesbusiness rules that that are embedded in a rule-driven workflow (or are embedded in a rule-driven workflow (or other action-oriented) engine other action-oriented) engine


Real-time BIReal-time BI Characteristics and benefits of ADSCharacteristics and benefits of ADS

ADS are most suitable for decisions that must ADS are most suitable for decisions that must be made frequently and/or rapidly, using be made frequently and/or rapidly, using information that is available electronically information that is available electronically


Capabilities of ADSsCapabilities of ADSs Rapidly builds rules-based applications and deploys Rapidly builds rules-based applications and deploys

them into almost any operating environment them into almost any operating environment Injects predictive analytics into rule-based applicationsInjects predictive analytics into rule-based applications Provides services to legacy systems Provides services to legacy systems Combines business rules, predictive models, and Combines business rules, predictive models, and

optimization strategies flexibly into state-of-the-art optimization strategies flexibly into state-of-the-art decision-management applicationsdecision-management applications

Accelerates the uptake of learning from decision criteria Accelerates the uptake of learning from decision criteria into strategy design, execution, and refinement into strategy design, execution, and refinement


ADS applicationsADS applications Product or service configurationProduct or service configuration Yield (price) optimizationYield (price) optimization Routing or segmentation decisionsRouting or segmentation decisions Corporate and regulatory complianceCorporate and regulatory compliance Fraud detectionFraud detection Dynamic forecastingDynamic forecasting Operational controlOperational control


Implementing ADSImplementing ADS—software companies —software companies provide these components to ADS: provide these components to ADS: Rule enginesRule engines Mathematical and statistical algorithms Mathematical and statistical algorithms Industry-specific packages Industry-specific packages Enterprise systems Enterprise systems Workflow applications Workflow applications


Competitive intelligenceCompetitive intelligence Many companies continuously monitor the Many companies continuously monitor the

activities of their competitors to acquire activities of their competitors to acquire competitive intelligencecompetitive intelligence

Such information gathering drives business Such information gathering drives business performance by increasing market knowledge, performance by increasing market knowledge, improving knowledge management, and improving knowledge management, and raising the quality of strategic planning raising the quality of strategic planning

BA and the Web: Web BA and the Web: Web Intelligence and Web AnalyticsIntelligence and Web Analytics

Using the Web in BAUsing the Web in BA Web analyticsWeb analytics

The application of business analytics The application of business analytics activities to Web-based processes, activities to Web-based processes, including e-commerce including e-commerce


Clickstream analysisClickstream analysis

The analysis of data that occur in the Web The analysis of data that occur in the Web environment.environment.

Clickstream dataClickstream data

Data that provide a trail of the user’s Data that provide a trail of the user’s activities and show the user’s browsing activities and show the user’s browsing patterns (e.g., which sites are visited, patterns (e.g., which sites are visited, which pages, how long) which pages, how long)


Usage, Benefits, Usage, Benefits, and Success of BAand Success of BA

Usage of BAUsage of BA Almost all managers and executives can use Almost all managers and executives can use

some BA systems, but some find the tools too some BA systems, but some find the tools too complicated to use or they are not trained complicated to use or they are not trained properly. properly.

Most businesses want a greater percentage of Most businesses want a greater percentage of the enterprise to leverage analytics; most of the enterprise to leverage analytics; most of the challenges related to technology adoption the challenges related to technology adoption involve culture, people, and processes involve culture, people, and processes


Success and usability of BASuccess and usability of BA Performance management systems (PMS) Performance management systems (PMS) are are

BI tools that provide scorecards and other BI tools that provide scorecards and other relevant information that decision makers use relevant information that decision makers use to determine their level of success in reaching to determine their level of success in reaching their goals their goals


Why BI/BA projects failWhy BI/BA projects fail 1.1. Failure to recognize BI projects as cross-Failure to recognize BI projects as cross-

organizational business initiatives and to organizational business initiatives and to understand that, as such, they differ from understand that, as such, they differ from typical standalone solutionstypical standalone solutions

2.2. Unengaged or weak business sponsorsUnengaged or weak business sponsors

3.3. Unavailable or unwilling business Unavailable or unwilling business representatives from the functional areasrepresentatives from the functional areas


Why BI/BA projects failWhy BI/BA projects fail 4.4. Lack of skilled (or available) staff, or Lack of skilled (or available) staff, or

suboptimal staff utilizationsuboptimal staff utilization

5.5. No software release concept (i.e., no No software release concept (i.e., no iterative development method)iterative development method)

6.6. No work breakdown structure (i.e., no No work breakdown structure (i.e., no methodology)methodology)


Why BI/BA projects failWhy BI/BA projects fail 7.7. No business analysis or standardization No business analysis or standardization

activitiesactivities

8.8. No appreciation of the negative impact No appreciation of the negative impact of “dirty data” on business profitabilityof “dirty data” on business profitability

9.9. No understanding of the necessity for No understanding of the necessity for and the use of metadataand the use of metadata

10.10. Too much reliance on disparate methods Too much reliance on disparate methods and toolsand tools


System development and the need for System development and the need for integrationintegration

Developing an effective BI decision support Developing an effective BI decision support application can be fairly complex application can be fairly complex

Integration, whether of applications, data Integration, whether of applications, data sources, or even development environment, is sources, or even development environment, is a major CSF for BI a major CSF for BI

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Chapter 3 Business Analytics and Data Visualization