TABLE OF CONTENTS

TABLE OF CONTENTS ................................................................................................................ 1

CHAPTER 1-INTRODUCTION .................................................................................................... 2
1.1 RESEARCH BACKGROUND ........................................................................................ 2
1.2 PROBLEM STATEMENT ............................................................................................... 3
1.3 RESEARCH QUESTIONS .............................................................................................. 5
1.4 RESEARCH OBJECTIVES ............................................................................................. 5
1.5 RESEARCH SCOPE ........................................................................................................ 5
1.6 RESEARCH SIGNIFICANCE ......................................................................................... 5
1.7 ORGANIZATION OF RESEARCH REPORT ................................................................ 6
CHAPTER 2- LITERATURE REVIEW ........................................................................................ 7
2.1 INTRODUCTION ............................................................................................................ 8
2.2 BUSINESS INTELLIGENCE .......................................................................................... 8
2.3 BUSINESS INTELLIGENCE TOOLS ............................................................................ 8
2.4 DECISION-MAKING PROCESS IN MANUFACTURING ORGANIZATION ......... 11
2.3 CONCEPTUAL FRAMEWORK ................................................................................... 12
CHAPTER 3-RESEARCH METHODOLOGY ........................................................................... 14
3.1 INTRODUCTION .......................................................................................................... 14
3.2 RESEARCH PARADIGM AND APPROACH ............................................................. 14
3.3 RESEARCH DESIGN .................................................................................................... 14
3.3.1 RESEARCH OPERATIONAL FRAMEWORK ......................................................... 15
REFERENCES ..................................................................................................................... 17

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 CHAPTER 1-INTRODUCTION

1.1 RESEARCH BACKGROUND

Main focus on this paper examines on how Business Intelligence support in decision making
process in organization in manufacturing industries. This paper identifies four main components
of Business Intelligence systems and their descriptions in a Business Intelligence system to support
decision making process in the organization. The four main Business Intelligence components are
ETL tools, data warehouses, OLAP techniques, and data-mining. This paper is also describe the
roles of each BI tools component and how they are used to support selected managerial decision-
making process. Selected decision-making process are acquiring/gathering information, searching
information, analyzing information and delivering information which are four most common
components of managerial decision making actions as described by Olszak and Ziemba (2003).
Besides that, this paper is also describe how each BI components is used to facilitate managerial-
decision-making at three level of organizational management which are operational, tactical and
strategic decision level. (Olszak & Ziemba, 2007).

In every organization, management decision making play crucial impact to the organization
success. Therefore according to Shimizu, et...al., 2006, the decision should be planned and resolve
comprehensively, reliable and transparent, managers used information on their organization
cultures, knowledge transfer able to improve their knowledge management strategies toward
effective organization strategies. Thus decision-making process is important for organization
success. BI is more than just a technology. It provides organization with support for better
decision-making.

According to Arnott et al. (2004), the role of business intelligence is to extract the information
deemed central to the business and to present or manipulate that data into information that is useful
for the managerial decision support through the use of business intelligence systems. Business
Intelligence (BI) systems provides analysis of data from various sources. This data are combine
from internal data systems of an organization and they also can consolidate with data from external

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sources such as internet. According to Olszak & Ziemba, 2007, those data reflects enough and
accurate real time information on each organizational activities. BI systems can support decision
making in term of providing reliable data for analysis in an organization. BI values help to make
changes in an organization such as producing new product, expand market. This was confirmed
by Chaudhary, 2004; Olszak, & Ziemba, 2007; Reinschmidt, & Francoise, 2002 in their studies.
Reinschmidt, & Francoise, 2000 has concluded that BI systems are integrated set of tools,
technologies and applications to be used to collect data, integrate data, analyze data and make data
ready. BI systems support decision making in every management levels.

The importance of understanding business intelligence systems can enable organization to

implement an analytical approach that able to transforms data into information, information into
knowledge and then knowledge into decisions (Olszak and Ziemba, 2007). In short, BI is about
delivering the right information to the right people at the right time in order for it to be used to
support effective decision making (Miller, Brutigam & Gerlach, 2006). It is different from
traditional Management Information systems because it able to analyze semi-structured data from
different sources and they produce multi-dimensional visualization. Main BI systems contribution
to an organization are optimizing business processes, increase profits and improving management
decision-making.

1.2 PROBLEM STATEMENT

Business Intelligence (BI) system is not a new technology in the business world, as Business
Intelligence is the mixture of the gathering, cleaning and integrating data from various sources,
and introducing results in a mode that can enhance business decisions making and decisions
support (Karim, 2011). Continental Airlines (Waston et al., 2006), Pilot Flying J, Super 8 Hotels
Co. Ltd. and Towne Park (Microsoft Case Study, 2012), Wal-Mart, Harrahs, Marriot and Capital
One (Viaene, 2008), have succeeded and benefitted from the system. Businesses especially in
manufacturing industries become more and more competitive, there is need for technology that
can help them to make accurate decision sufficient and reliable data or information.

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The ability of an organization to take advantage of all available information through the decision-
making process is a critical component for its success (Cody, Kreulen, Krishna & Spangler, 2002).
Corporations use business intelligence systems mainly for corporate management, monitoring of
business activities, reporting, planning and decision-making support, as well as optimization of
customer relations (Olszak & Ziemba, 2007). More than ever, information supports all critical
business decisions (Matei, 2010). Therefore it is proven that organization in manufacturing
industries need to make use of Business Intelligence (BI) systems to help and support their business
decision-making.

Therefore, nowadays organizations need BI systems to assess and evaluate their assets into
Business Intelligence systems, which involve an accurate evaluation to the business value and
distinguish it from other organizations using comparable systems. In addition, organization
nowadays faces with huge amount of data daily and manager mostly not familiar with BI process.
Managers need the right information at the right time and the right place to make a good decision.
Business decisions are complex process and consumes time and the data management get always
are not accurate and not reliable thus lead to inaccurate business decision.

Organization facing lack of reliable, timely information cause profit loss in an organization. If
management unable to have reliable information, the have lacks of ability to analyze current
business situations based on previous situation and therefore unable to produce strategic planning
for short and long time. Therefore the need for information systems that can proves information to
normal user without need to have high level of knowledge in Information Technologies are needed.
So that they can analyze reliable information and produce good and right decision at the right time.
Very little research has been carried out to investigate the how BI can support in an organization
decision making and their benefits to the organization in manufacturing industries.

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1.3 RESEARCH QUESTIONS

The research question of this thesis is:

1. How Business Intelligence (BI) system can support decision-making process in an
organization.

1.4 RESEARCH OBJECTIVES

The objectives of this thesis are:

1. To study the decision-making process in manufacturing organization.
2. To identify Business Intelligence (BI) tools that support decision-making process in
manufacturing organization.

1.5 RESEARCH SCOPE

The focus of this study is on how Business Intelligence tools support decision making process in
manufacturing industries. The main subjects for this research are top management in selected
organization which involves in decision-making process which are Chief Executive Officer
(CEO), Vice Presidents (VPs), Department Managers and also selected employees which involves
in data preparation for decision making process.

1.6 RESEARCH SIGNIFICANCE

The outcome of this study is structured as a set of set guidelines to enable IT to better improve the
decision making process with Business Intelligence tools support in their organization. It will also
increase the job satisfaction among the employee as they able to make better and quality decisions.
When organizations have improve their decision making process, it will give significance impact
to our country. This will help to improve the productivity and income of the country.

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1.7 ORGANIZATION OF RESEARCH REPORT

Chapter 1 provides the reader with the background of the thesis, the problem statement, research
questions, research objectives, research scope and significance of the study.
Chapter 2 presents overview of relevant literature within the context of this master thesis.
Chapter 3, this chapter presents the research paradigm, research approach, and research design.

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 CHAPTER 2- LITERATURE REVIEW

Decision Making

Operational Level
Decisions

Level of Tactical Level

DECISION MAKING
Decision Decisions
PROCESS
Making
Strategic Level
Decisions

BI Concepts

BUSINESS
INTELLIGENCE (BI)
Data Warehouse
BI Main
Components
Extract,
BI Benefits Transform, Load
(ETL)

Data Mining

OLAP

Figure 1: Literature Review Conceptual Map

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2.1 INTRODUCTION

This chapter covers the background knowledge that has contributed to the present study. A review
of decision making process and Business Intelligence (BI) features and components that can
support decision making process are discussed.

2.2 BUSINESS INTELLIGENCE

According to Gibson, et al., 2004; Ranjan, 2008, both of them defined that BI systems is group of
tools and technologies intended to assist decision makers in the organization to produce more
efficient and effective fact-based decisions. In BI system, information from internal and external
are stored as stated by Pirttimaki, 2007. Haag, Baltzan & Phillips, 2008; Venter & Tustin, 2006
stated that BI are also can be defined as a process of changing the data into information and then
into knowledge.

The concept of Business Intelligence (BI) is brought up by Gartner Group since 1996. It is defined
as the application of a set of methodologies and technologies, such as J2EE, DOTNET, Web
Services, XML, data warehouse, OLAP, Data Mining, representation technologies, etc., to
improve enterprise operation effectiveness, support management/decision to achieve competitive
advantages. Business Intelligence by today is never a new technology instead of an integrated
solution for companies, within which the business requirement is definitely the key factor that
drives technology innovation. How to identify and creatively address key business issues is
therefore always the major challenge of a BI application to achieve real business impact.

2.3 BUSINESS INTELLIGENCE TOOLS

Business intelligence refers to the use of technology to collect and effectively use information to
improve business effectiveness. An ideal BI system gives an organization's employees, partners,
and supplier's easy access to the information they need to effectively do their jobs, and the ability
to analyze and easily share this information with others (KMBI, 2005). According to (Shi, Z.,
Wang, M., Wu, W., Xu, L., & Zeng, L. (2006), Business Intelligence (BI) is sets of powerful tools

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and approaches to improving business executive decision-making, business operations, and
increasing the value of the enterprise. The technology categories of BI mainly encompass Data
Warehousing, OLAP, and Data Mining.

A data warehouse is a collection of relevant business data that is organized and so that it can be
analyzed to support business decision making. Data warehouses are populated with data that has
been extracted from distributed databases, often heterogeneous and, in some cases, external to the
organization which is using it. Data warehouses are subject oriented databases that are integrated
into an information system. They are time relevant, meaning that they are snapshots of a point of
time within the information system and they are not updatable so as to maintain the integrity of
the historical point in which the snapshot of data is taken. (Cody et al. 2002). The data is historical,
a summary of prior transactions that when analyzed can provide a wealth of knowledge in which
managerial decisions can be made. These decisions are based on the history of the business that a
data warehouse is holding (Schink, 2009).

ETL tools and processes are responsible for the extraction of data from one or many source
systems, as they transform data from many different formats into a common format and then load
that data into a data warehouse (Schink, 2009). ETL tools are tasked with extracting information
deemed central to the business. They manipulate and present that data into information that is then
used for managerial decision making (Arnott et al., 2004). The ETL process can do low level
analysis and transformation in this data warehouse prior to loading it into the enterprise data
warehouses (Castellanos et al., 2009). ETL tools can be written to have more emphasis on one
particular aspect of the ETL process over the other.

Generally there are four categories that ETL tools fall under (Olszak & Ziemba, 2006):
1. Tools that address the extraction and loading aspects of the ETL process.
2. Tools that provide a preference for the data type and format to be extracted and loaded.
3. Tools that offer a balance across all tool functions; the lack of emphasis may cause this aspect
to result in poorer handling of a large volume of data formats.
4. Tools that emphasize the integration of data into data warehouses.

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Online Analytical Processing (OLAP) analyze complex data in real time on a database that is
constantly updated with transactional data. The OLAP optimizes the searching of huge data files
by means of automatic generation of SQL queries (Olszak & Ziemba, 2006). OLAP allows user
access, analysis and modeling of business problems and sharing of information that is stored in
data warehouses (Olszak & Ziemba, 2007). As noted by Olszak and Ziemba (2007), OLAP offers
techniques for data analysis and drilling data and the tools are mainly used for interactive report
generations. Matei (20010) states that OLAP tools use data mining techniques and statistical
methods to create readable, fast report generation that is used for forecasting that can further assist
in strategic decision making. These reports are generated based on a managers pre-defined criteria
(dimensions).

Data mining techniques are designed to identify relationships and rules within a data warehouse,
then create a report of these relationships and rules (Hevner & March, 2005). The data mining
process involves discovering various patterns, generalizations, regularities and rules in data
resources. Knowledge from data mining may be used to predict an outcome of a decision and can
also describe reality. The predictions generated by data mining use known variables to predict the
outcome of a situation, while reality is measured by graphing, tabling, and creating formulas based
on the existing data (Olszak & Ziemba, 2007). There are several basic strategies for data mining.
The most common are: classification, estimation, prediction, time series analysis, and market
basket analysis (Shi et al. 2006). These strategies can be aligned with the needs of an organization
and help decision making by discovering various patterns, generalizations, regularities and rules
in data resources.

Olszak and Ziemba (2003) present a framework for the actions a manager takes in order to make
business decisions. The decision-making process are acquiring/gathering information, searching
information, analyzing information and delivering information which are four most common
components of managerial decision making actions. Acquiring information has become
increasingly more difficult as modern organizations adopt more distributed information systems
in which to store their business critical data (Hevner & March, 2007).This action is used to find
the business issue. Searching information action are when the data are extracted from operational
databases (Castellanos et al., 2009), the newly loaded high quality data are mined using data

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mining techniques and processes. This action is performed at different levels of data quality. In
analyzing information process, Managers need to create data models to understand and address
business issues. Through data preprocessing and applying OLAP and data mining techniques
managers can analyze information from multiple dimension at varying degrees of granularity, and
tasked with a different level of analysis (Shi et al., 2006). In delivering information process, OLAP
creates ad hoc report generation using simpler data mining techniques by summarizing data
without the pattern matching that is unique to the data mining process (Matei, 2010). As Olszak
and Ziemba (2003).

The business intelligence system extracts this data from various data sources, transforms it into
specified formats, and then loads the newly formatted data into specially designated data
warehouses that are available to all three levels of decision making within the organization:
operational, strategic, and tactical (Negash, 2004).

At the operational level, decisions affect or are related to the ongoing operations of an
organization. These decisions are generally based on up-to-date financial data, sales and co-
operation with suppliers and customers (Olszak & Ziemba, 2007). Operational level decisions are
noted as being the decisions that allow an organization to run its day-to-day activities (Esat et al.,
2007). The information provided by the business intelligence system is at a summary level and the
data feed into the business intelligence system from the operational level of an organization is
analyzed and combined with other external information to create direction and allow for strategic
planning to occur.

2.4 DECISION-MAKING PROCESS IN MANUFACTURING ORGANIZATION

Decisions made at the tactical level are related to planning and rely on real-time data and
forecasting to direct the future actions of marketing, sales, finance and capital management.
Tactical decisions are often used to support strategic decisions (Olszak & Ziemba, 2007). The
information derived through these activities allows for optimizing future actions and for modifying
organizational aspects of the company's performance.

11
Strategic level decisions set objectives as well as ensure that those objectives are realized. Business
intelligence systems provide information in support of strategic decision related to the
development of future results based on historical results, profitability of offers (made or received)
and the effectiveness of distribution channels (Olszak & Ziemba, 2007).

The benefits that BI will deliver are different for each organization as the intelligence within the
organization is unique (Moss & Atre, 2003). The value of having access to information used to
make a decision may not be apparent until the impact of the decision is known which may only
be after a prolonged period of time (Bannister & Remenyi, 2000). BI is not just IT, although IT
plays an important role as an enabler of BI (Venter & Tustin, 2006). Like IT, BI has no inherent
value and the value is derived from the actions initiated based on it (Lonnqvist & Pirttimaki, 2006).
Pirttimaki (2007) suggests that BI is more like a management philosophy or managerial tool and
technology is indeed an enabler of BI. Justification for BI initiatives must be business-driven, not
technology driven (Moss & Atre, 2003). In the same way that the value realized from IT investment
is dependent on how the resources are utilized, the business value of BI is dependent on
management processes existing to ensure that operational processes utilize the information
delivered (Williams & Williams, 2007).

The works cited previously describe highlight the use of Business Intelligence and its benefits
alone. The differential of this proposal is to study on how BI support decision making process in
and its benefits to the organization in manufacturing industries based on four main components of
Business Intelligence (BI) tools.

2.3 CONCEPTUAL FRAMEWORK

The conceptual framework in figure 2 was generated using the findings from an extensive literature
study on Business Intelligence (BI) tools to support decision making. This research conducted to
propose integrated framework that specifies decision making process, Business Intelligence (BI)

12
components and output. The framework provides an overall view of decision making process and
how Business Intelligence (BI) components can support the decision making process.

BI
COMPONENTS

DATA ETL, DATA WAREHOUSE

INFORMATION OLAP

KNOWLEDGE DATA MINING

QUALITY
DECISION
MAKING

Figure 2: Conceptual Framework

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CHAPTER 3-RESEARCH METHODOLOGY

3.1 INTRODUCTION

In this chapter, research methodology and methods adopted to solve the research problem has been
explained. This proposal uses interpretivist paradigm. The purpose for using interpretivist
paradigm is related to the objectives of research. Furthermore, it is necessary to investigate current
decision making process through interview.

3.2 RESEARCH PARADIGM AND APPROACH

Therefore, interpretivist paradigm has been used in this research in investigating how Business
Intelligence (BI) components can support decision making process in manufacturing industries.
Research paradigm: interpretivist
Research Approach: Qualitative
Strategy of inquiry: case study (focus an in-depth description and analysis of multiple cases).

3.3 RESEARCH DESIGN

The mapping of Research Question, Research Objectives, with Research Methodology and
Research Output.

Research Questions Research Objectives Research Research

Methodology Output
How Business 1. To investigate current Interpretivist Paradigm Guideline
Intelligence (BI) tools decision-making ( interview)
support decision- process.
making in an 2. To identify benefits of
organization? Business Intelligence
(BI) system in decision-
making process

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3.3.1 RESEARCH OPERATIONAL FRAMEWORK

Phase 1: Planning and Literature Review

Objective Activities Methods Deliverables
To study on the i. Literature Review i. Journals, online i. Problem
problem: ii. Preliminary study database, case study statement
1. To investigate ii. Interviews ii. Research
current Question
decision- and research
making objectives
process. iii. Conceptual
2. To identify framework
benefits of
Business
Intelligence
(BI) tools in
decision-
making
process.

Phase 2: Strategy of Enquiry

Objective Activities Methods Deliverables
i. Develop an in-depth i. Case study
description
and analysis of
multiple cases

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 Phase 3: Data Collection
i. Interview i. Using interview:
(unstructured, Interview framework,
focus group) interview protocol,
ethical consideration,
field notes, validation
online database
Phase 4: Data Analysis
i. Validate the i. Writing report
accuracy of persuasively,
analysis convincingly

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