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JENNIFER ESPANOL

INTELLIGENCE

MIT

ASSIGNMENT

NO.2

BUSINESS

1. Describe business analytics (BA) and its importance to organizations


Business Analytics refers to the skills, technologies, applications and
practices for the continuous exploration of data to gain insight that drive
business decisions. Business Analytics is multi-faceted. It combines multiple
forms of analytics and applies the right method to deliver expected results. It
focuses on developing new insights using techniques including, data mining,
predictive analytics, natural language processing, artificial intelligence,
statistical analysis and quantitative analysis. In addition, domain knowledge is
a key component of the business analytics portfolio. Business Analytics can
then be viewed as the combination of domain knowledge and all forms of
analytics in a way that creates analytic applications focused on enabling
specific business outcomes. (http://frankdiana.wordpress.com/2011/03/19/theevovling-role-of-business-analytics/)
According to Raut, S (2011) Business Analytics is an extremely important
area going across all the business domains. If you know in advance, which of
the customers are likely to leave you, you can take measures to hit only those
customers with right campaigns to retain them. there is no need for machine
gun firing but a sniper is required in this case. By looking at the future,
Organizations can take proactive decisions and plan their business for
maximum success. So Business Intelligence can give you "Information" but
Business Analytics gives you the "Knowledge" - TO ACT UPON !!!
Explanation:
In business industry nowadays, business strategies are very important so that
firms will be more competitive and be able to stay on the top. With this,
Business Analytics plays an important role in every industry. Through
Business Analytics, the management will hire business experts to produce
solutions in every company dilemma. These experts should have a deep
knowledge regarding all the concerns and transactions within the company.
With Business Analytics, profound analysis will be required. A variety of team
brainstorming will occur upon the organization to decipher certain issues.
Example in the academe setup, Systems Plus College Foundation in year
2013 had a decrease in enrollment, in this scenario the management needs to
practice business analytics. Investigation and data gathering will occur. The

management needs to study the reasons why there is a decline in the


enrollment. Data mining will also be used. Through a deep examination with
the problem, assumptions and hypothesis will be produced. Based from my
personal view and analysis in this matter increase of tuition fees, unfavorable
learning environment that includes the school facilities and teachers lack of
teachers performance and professionalism might be the cause to reduction of
enrollees. All the way through Business Analytics, experts and management
will be able to provide relevant solutions to companys predicament and could
also predict the companys future progress. There are also tools and software
that can help the management in resolving company issues.
2. List and briefly describe the major BA methods and tools
According to Cadle J. et al (2010) BUSINESS ANALYSIS
TECHNIQUES
There are two techniques that may be used to define organisational strategy:
SWOT analysis and PESTLE analysis.
Strategy implementation (Techniques 89)
When the strategy has been defined, it is important to consider the range of
issues associated with implementing it. One of the key problems here is
recognising the range of areas that need to be coordinated if the business
changes are to be implemented successfully.
The approaches that support the implementation of strategy are McKinseys
7-S model and the four-view model.
Performance measurement (Techniques 1012)
All organisations need to monitor performance. This section explains two
techniques used to identify performance measures and carry out the
evaluation. These are critical success factors/key performance indicators, and
the Balanced Business Scorecard technique.
STRATEGY ANALYSIS EXTERNAL BUSINESS ENVIRONMENT
Technique 1: PESTLE analysis
Variants/Aliases
There are several similar approaches used to investigate the global business

environment within which an organisation operates. The most commonly used


approaches to external environment analysis are:
PEST (political, economic, socio-cultural, technological); PESTEL (political,
economic, socio-cultural, technological, environmental
(or ecological), legal);
PESTLIED

(political,

economic,

socio-cultural,

technological,

legal,

international, environmental (or ecological), demographic);


STEEPLE (socio-cultural, technological, environmental (or ecological),
economic, political, legal, ethical).
Description of the technique

PESTLE analysis provides a framework for investigating and analysing the


external environment for an organisation. The framework identifies six key
areas that should be considered when attempting to identify the sources of
change.

EXPLANATION:
SWOT Analysis focuses on the companys Strength, Weakness,
Opportunities and Threat. SWOT analysis is being done by the top
management to oversee the companys current status. In SWOT analysis, it
will include issues such as the Strong points of the company, drawback of the
company which needs to be lessened or eliminated, chances that can be
grabbed for the development of the company and the competitors or the firm.
Also in SWOT analysis future projects will be overviewed. Usually in top
management meeting in SWOT they prepare their plan for the next 5 years for
the company. This method is really useful and effective. In PESTLE analysis
all the relative data coming from the representatives or department of the
company are included. Factors within the organization will be summarized to
identify what are the possible causes that affect the organization. Additionally,
in PESTLE analysis internal and external influences are highlighted to make
the examination of the companys eminence wider.

3.Describe how online analytical processing (OLAP), data visualization, and


multidimensionality can improve decision making.
Based from Hyland P. et al. managers see information as a critical
resource and require systems that let them exploit it for competitive
advantage. One way to better use organizational information is via online
analytical processing and multidimensional data- bases. OLAP and MDDBs
present summarized information from company databases. They use
multidimensional structures that let managers slice and dice views of
company performance data and drill down into trouble spots. For over a
decade, proponents have touted these tools as the ultimate executive
information system, but most of the hype comes from product vendors themselves. Based on our experience with several OLAP tools, we have developed
a more pragmatic approach to the design of multidimensional information
systems that lets managers make the most of their companies information
asset
EXPLANATION:
OLAP is an important system that can help make the company
reaching its success. Through OLAP, summarized aggregated data will be
used for creating companys decision. Example in Systems Plus College
Foundation, the president requested a report presenting if the company is
earning and still stable. To know the current status of the school, simply the
management will use OLAP where in the number of students will be examined
based from the time frame the company started until the current year.
Consolidation of data, drill down viewing of details and viewing of the
companies different prospective will be done so the decision will be given. If
the statistic result is downfall it means the school is not meeting its quota. In
multidimensionality, the management knowledge with its companys asset is
very important. In multidimensionality it will also include cube analysis where
in several data from the system will be analyzed to make decisions and
inquiries. With this phase, I.T experts are not that needed. Also in
multidimensionality, decision makers can predict the future status of the
company.

Moreover,

multidimensionality.

relational

database

management

is

used

in

As Thomas H. Davenport, senior adviser to Deloitte Analytics, explains


dedication to common and well-understood data displays shows what is
possible when senior managers are able to stop spending so much time
discussing whose data is correct, what data should really be used, and how it
should best be displayed. Consensus on the information that is relevant to
make decisions saves time and avoids misunderstanding. They can spend
that much more time devising ways to address the problems and
opportunities. Its the creativity that is exercised on those fronts that really
drives the success of businesses, he concludes in the end, graphical display
of information should help take action and effectively provide valuable
insights. In order to achieve this, data visualization should be interpretable,
pertinent and fresh. (http://www.shopperception.com/blog/the-power-of-datavisualization-in-decision-making-processes/)

EXPLANATION:
Company needs highly visual business intelligence tools that can help
them

make

the

right

decisions

quickly

through

data

visualization.

Representing data is more effective in examining the variables in a company.


In the new era of technology today, Dashboards are used as a presentation
tool. A good example of tool used in visualization is through basic charts. With
this virtualized material, the management will be able to analyze the issues
concerning the company.

4. Describe advanced analysis methods


AccordingtoQualtrics the following are the theory behind some common data
analysis methods.
ANOVA
Cluster Analysis
Discriminant Analysis
Factor Analysis
Multidimensional Scaling Overview

Regression Analysis
Sampling
Requirements
ONEWAY ANOVA tests the equality of group means for a single specified
variable. For example, The F ratio tests the statistical significance between
means.
The Analysis
The ANOVA is done with the Ho: 1 = 2 = 3 = ..= k
Next, using the tables, the F-value with degrees of freedom v1 (v1 = D.F. of
the numerator i.e. of MS(Treatment) = k-1) and v2 (v2 = D.F. of the
denominator i.e. of MS(Error) = n-k), and for the significance level used in the
analysis, is obtained.
http://www.qualtrics.com/university/researchsuite/research-resources/dataanalysis-guides/advanced-analysis-methods/anova/
EXPLANATION: This method includes mathematical formulas to derive with
the assumption in collecting and analysis of data, which includes the total
number of all observations in a sample and the variance. Through this
advance method, the management will be able to know if there is sufficient
evidence to accept or reject the experts hypothesis.
b. Cluster Analysis1
Cluster analysis, like reduced space analysis (factor analysis), is concerned
with data matrices in which the variables have not been partitioned
beforehand into criterion versus predictor subsets. In reduced space analysis
our interest centers on reducing the variable space to a smaller number of
orthogonal dimensions, which maintains most of the informationmetric or
ordinal contained in the original data matrix. Emphasis is placed on the
variables rather than on the subjects (rows) of the data matrix. In contrast,
cluster analysis is concerned with the similarity of the subjectsthat is, the
resemblance of their profiles over the whole set of variables. These variables

may be the original set or may consist of a representation of them in reduced


space (i.e., factor scores). In either case the objective of cluster analysis is to
find similar groups of subjects, where similarity between each pair of
subjects is usually construed to mean some global measure over the whole
set of characteristicseither original variables or derived coordinates, if
preceded by a reduced space analysis.
http://www.qualtrics.com/university/researchsuite/research-resources/dataanalysis-guides/advanced-analysis-methods/anova/

EXPLANATION:
In clustering method, it focuses more on grouping the variables or the
participants with the same profile then the results will be examined. Example
the researcher is studying computer games, through conducting a survey
he/she can evaluate if more of the teenagers today are used to playing
computer games. To be able to do this, clustering method will be used. The
researcher needs to include the profile of the respondents such as their age
and gender. Example with the result of the survey from 100 respondents 30 of
the female teenagers answered that they are not used to playing computer
games. With this result of clustering, it will provide additional insights to the
programmers such as focusing more on developing games that will be used
by male teenagers.
c.Factor Analysis
Factor analysis is a data reduction technique for identifying the internal
structure of a set of variables. Unlike other techniques like Regression
analysis or ANOVA, factor analysis does not require that predictor and
criterion variables be defined. Factor analysis attempts to identify the
relationship between all variables included in the analysis set.
Factor analysis is decompositional in nature in that it identifies the underlying
relationships that exist within a set of variables. Factor analysis creates
groups of metric variables (interval or ratio scaled) called factors. A factor is
an underlying quality found to be characteristic of the original variables. Two

types of factors exist. Common factors have effects shared in common with
more than one observed variable. Unique factors have effects that are unique
to a specific variable.
http://www.qualtrics.com/university/researchsuite/research-resources/dataanalysis-guides/advanced-analysis-methods/anova/

EXPLANATION:
A good example of factor analysis in the academe is the result of the students
grades. Given the data below lets compare the performance of the students
using factor analysis.
Math

Physics

English

STUDENT A

90

90

75

STUDENT B

75

95

90

Based form the students grade, can we say that student A is smarter
than students B since math and science are the one of the difficult subjects?
In factor analysis, it focuses more on the subject. In the given example we will
not focuses on their grades but instead the total performance of the student
and factors that can be considered in getting the results. Certain factors can
be cogitated, students get high grades in some subjects because it is their
interest. In the given example student B got 95 in physics on the other hand
student B only got 75 in math. Physics and Math both have computations so
how come students B got low grade in math. This means that the
performance of the students is not consistent it depends on various factors.
Do they belong in the same section? Do they have the same teacher?
Analysis with these questions can give you idea that there are a lot of factors
to be considered in analyzing a certain issue.

5. Explain OLAPs role in BI


Based form the presentation of Upadhay R. (2010) OLAP IN
BUSINESS INTELLIGENCE. Online Analytic Processing tool is to store and
manage datas that can be effectively used to generate information from
Business Intelligence Architecture view, OLAP sits between the Data
Warehouse and End-user tools.
To analyze and report on the health of a business and plan future activity,
many variable groups or parameters must be tracked on a continuous basis
which is beyond the scope of any number of linked spreadsheets. These
variable groups or parameters are called Dimensions in the On-Line Analytical
Processing (OLAP) environment.
Nowadays, many spreadsheet users have heard about OLAP technology, but
it is not clear to them what OLAP means. Unlike relational databases, OLAP
tools do not store individual transaction records in two-dimensional, row-bycolumn format, like a worksheet, but instead use multidimensional database
structures known as Cubes in OLAP terminology to store arrays of
consolidated information. The data and formulas are stored in an optimized
multidimensional database, while views of the data are created on demand.
Analysts can take any view, or Slice, of a Cube to produce a worksheet-like
view of points of interest. (http://olap.com/w/index.php/OLAP_Education_Wiki)
EXPLANATION:
OLAP helps analyze business data and generate reports that fit in
every level of management and companys requirements. In OLAP, the main
process involved is to analyze the data stored from the data warehouse of an
industry. Through the analyzed data, reports can be produced that allow
decision makers to analyze the data multidimensional in quick manner and
interactively in accordance with the business management needs.

6. Distinguish between OLAP and OLTP


The following are the differences between OLAP and OLTP systems.
a. Users: OLTP systems are designed for office workers while the OLAP
systems are designed for decision makers. Therefore while an OLTP
system may be accessed by hundreds or even thousands of users in a
large enterprise, an OLAP system is likely to be accessed only by a select
group of managers and may be used only by dozens of users.

(http://csbdu.in/econtent/Data%20Mining%20&%20Warehousing/Unit%20
V.pdf)

EXPLANATION: This only means that OLAP limits its users wherein it will
only include the management and decision makers. Approval for every
transaction is required for OLAP while in the OLTP, it is designed for the
users who manipulate and control the whole transaction in a company.

b.Functions: OLTP systems are mission-critical. They support day-to-day


operations of an enterprise and are mostly performance and availability
driven. These systems carry out simple repetitive operations. OLAP systems
are management-critical to support decision of an enterprise support functions
using analytical investigations. They are more functionality driven. These are
ad

hoc

and

often

much

more

complex

operations.

http://csbdu.in/econtent/Data%20Mining%20&%20Warehousing/Unit%20V.pd
f
EXPLANATION: In functionality, OLTP is mostly used, because OLTP
includes the daily transaction of the company. While in OLAP it focuses more
on additional inquiries, issues that needs a deep analysis of the transaction
from the decision makers. Example in a school, OLTP is the online viewing of
grades while the OLAP occurs when there are discrepancies with the grade
being posted in the online grading system. With this dilemma, the teacher
needs to justify and make report of the reason of the changes in the grades.
Changes will not be made immediately, approval to the department head and

registrar is necessary. If approved, then the registrar will make changes in the
online site.

c. Nature: Although SQL queries often return a set of records, OLTP


systems are designed to process one record at a time, for example a
record related to the customer who might be on the phone or in the
store. OLAP systems are not designed to deal with individual customer
records. Instead they involve queries that deal with many records at a
time and provide summary or aggregate data to a manager. OLAP
applications involve data stored in a data warehouse that has been
extracted from many tables and perhaps from more than one
enterprise
database.
http://csbdu.in/econtent/Data%20Mining%20&%20Warehousing/Unit%
20V.pdf
EXPLANATION: OLTP and OLAP are dissimilar in the nature of processing
of records. In OLTP it only needs to process one record at a time to process
the quiry while in OLAP all the records are deemed necessary to produce a
summary of the transaction. With this bulk of data will be needed in OLAP and
it needs to have a high storage of data because past records will also be
included in OLAP
d.Design: OLTP database systems are designed to be applicationoriented while OLAP systems are designed to be subject-oriented.
OLTP systems view the enterprise data as a collection of tables
(perhaps based on an entity-relationship model). OLAP systems view
enterprise
information
as
multidimensional).
http://csbdu.in/econtent/Data%20Mining%20&%20Warehousing/Unit%
20V.pdf
EXPLANATION: The interface design of OLTP are objective based in
the daily transaction of the company. While in OLAP, the design and
usage of the system interface is wider because the system can also
view and process the history records of the company. OLAP has more
complex system compare to OLTP.

5. Data: OLTP systems normally deal only with the current status of
information. For example, information about an employee who left
three

years

ago

may

not

be

available.

http://csbdu.in/econtent/Data%20Mining%20&%20Warehousing/Unit%
20V.pdf

EXPLANATION: In terms of data, OLAP has more data stored in the data

warehouse because all the previous records are included while in OLTP it just
need the current data of the transaction
7. Explain the concept of multidimensionality and how can it improve
decision making
EXPLANATION: Multidimensional analysis is being used by most of the
companies nowadays to examine the companys progress and status. In
multidimensional, all factors are considered including the time constraints,
assets, product category, components, customers, sales measures etc. With
these data being consolidated, the management can study the current
condition of the company and make decisions for the growth of the firm.

8.Explain the concept of cube in multidimensionality

A cube is a multidimensional structure that contains information for analytical


purposes; the main constituents of a cube are dimensions and measures.
Dimensions define the structure of the cube that you use to slice and dice
over, and measures provide aggregated numerical values of interest to the
end user. As a logical structure, a cube allows a client application to retrieve
values, of measures, as if they were contained in cells in the cube; cells are
defined for every possible summarized value. A cell, in the cube, is defined by
the intersection of dimension members and contains the aggregated values of
the measures at that specific intersection. http://technet.microsoft.com/enus/library/ms175641.aspx
Through cube multidimensionality, it will hold all the related values and
variable in the company. In cube multidimensionality, certain methods can be
used like slice and dice to make investigation. Additionally, it is a high-quality
technique to improve the users understanding on how they may want to query
on the data stored. Moreover, the concept of cube in multidimensionality
includes extracting of information to create assumption. Tools will be used to

find what's relevant and what's important and to explore different scenarios
related for the success of the company.
9.Explain GIS. GIS and Business Intelligence: The Geographic Advantage
An ESRI White Paper September 2006
Historically, business intelligence (BI) and geographic information system
(GIS) technology have followed separate development and implementation
paths. Customer requests for a more complete operational picture and the
ability to be more proactive have led to the combination of these two
technologies. Regulatory requirements have also raised the visibility of both
technologies within many organizations. In response to BI and GIS users,
leading BI providers have been integrating the two technologies and providing
innovative solutions to a growing number of end users. The users are
responding with new applications that leverage the synergy of the combined
technologies.
This white paper describes the purpose and benefits of both GIS and BI, the
technological advancements that have fostered their integration, and the
synergistic benefits of integrated applications that can benefit the entire
organization without disrupting existing IT environments.
GIS is a mature technology that began in university computer science
departments in the late 1960s. The seminal idea was associating data with
geographically referenced map graphics to allow an understanding of the
influence of geography on behaviors and outcomes.
Today's GIS recognizes the location component of data and associates data
with geographic features maintained in a GIS. Features in a GIS are graphic
representations of actual features, such as roads, rivers, and forests, and
conceptual features such as political boundaries or service areas. Associating
data with features lets users organize data based on the geographic location
of each record in the data. This geographic organization, presented as a map,
reveals spatial relationships and influences that cannot be identified in
traditional tabular views of data.
Explanation: In our generation today Geographic information systems are
now in the trend. For example in municipalities, they can use GIS system to
map and locate the addresses of barangay floodplain boundaries. With this
information, they can estimate the total financial impact on reserves from a
potential catastrophic flood. Moreover in private cars, GIS is deemed
necessary to help the traveler map his destination in an easier and fastest
way.