 BUSINESS ANALYTICS

Management is a process by which organizational goals are achieved through the use of resources (people, money,
energy, materials, space, time).
The Manager’s Job and Decision Making
Managers have three basic roles (Mintzberg 1973) :
- Interpersonal roles: figurehead, leader, liaison
- Informational roles: monitor, disseminator, spokesperson
- Decisional roles: entrepreneur, disturbance handler, resource allocator, negotiator.
Decisions and Decision making
- Decision refers to a choice that individuals and group make among two or more alternatives.
- Decision making is a systematic process composed of three major phases: intelligence, design and choice
(Simon 1977), with the implementation phase added later.
Problem Structure
- Structured problems are routine and repetitive problems for which standard solutions exist.
- Unstructured problems are fuzzy, complex problems for which there are no cut-and-dried solutions.
- Semistructured problems are problems in which only some of the decision process phases are structured.

Business Intelligence (BI) refers to applications and technologies for consolidating, analyzing, and providing access
to vast amounts of data to help users make better business and strategic decisions.
The Scope of Business Intelligence
- The Development of One or a Few Related BI Applications
- The Development of Infrastructure to Support Enterprise-wide BI
- Support for Organizational Transformation
Business Intelligence Applications for Data Analysis
- Multidimensional Analysis or Online Analytical Processing (OLAP)
o Provides users with a look at what is happening or what has happened.
o Allows users to analyze data in such a way that they can quickly answer business questions.
- Data Mining
o Data mining refers to the process of searching for valuable information in a large database, data
warehouse, or data mart.
o Data mining performs two basic operations:
 Predicting trends and behaviors;
 Identifying previously unknown patterns and relationships.
o Data Mining is Used in:
 Retailing and sales, Banking, Manufacturing and production,
 Insurance, Police work, Healthcare, Marketing
- Decision Support Systems (DSS)
o Decision Support Systems (DSS) are computer-based information systems that combine models and data in
an attempt to solve semistructured and some unstructured problems with extensive user involvement.
o Three types of analysis :
 Sensitivity analysis is the study of the impact that changes in one (or more) parts of a model have on
other parts.
 What-if analysis is the study of the impact of a change in the assumptions (input data) on the proposed
solution.
 Goal-seeking analysis is the study that attempts to find the value of the inputs necessary to achieve a
desired level of output.
 CLOUD COMPUTING
- Cloud Computing Characteristics
o Cloud Computing Provides On-Demand Self-Service
o Cloud Computing Encompasses the Characteristics of Grid Computing
 Grid Computing enables organizations to utilize resources more efficiently
 Grid Computing provides fault tolerance and redundancy
 Grid Computing makes it easy to scale up
 Grad Computing makes it easy to scale down
o Cloud Computing Encompasses the Characteristics of Utility Computing
o Cloud Computing Utilizes Broad Network Access
o Cloud Computing Pools Computing Resources
o Cloud Computing Often Occurs on Virtualized Servers
 Server Farms
 Server Virtualization
- Types
o Public Cloud
o Private Cloud (or Corporate Cloud)
o Hybrid Cloud
o Vertical Clouds
- Services
o Infrastructure-as-a-Service (IaaS)
o Platform-as-a-Service (PaaS)
o Software-as-a-Service (SaaS)
- Benefits
o Benefit 1: Making Individuals More Productive
o Benefit 2: Facilitating Collaboration
o Benefit 3: Mining Insights from Data
o Benefit 4: Reduce Costs
o Benefit 5: Expand the Scope of Business Operations
o Benefit 6: Respond Quickly to Market Changes
o Benefit 7: Customize Products and Services
- Five Categories of Cloud Computing Concerns
o Concern 1: Legacy IT System
o Concern 2: Reliability - Example: Amazon Web Services
o Concern 3: Privacy
o Concern 4: Security
o Concern 5: The Regulatory and Legal Environment
 INFORMATION SYSTEM WITHIN ORGANIZATIONS
- Transaction processing system (TPS) monitors, collects, stores and processes data generated from all
business transactions.
o Batch Processing is when the firm collects data from transactions as they occur, placing them in groups
or batches, then prepares and processes the batches periodically (say, every night).
o Online Transaction Processing (OLTP) is when business transactions are processed online as soon as they
occur.
o Source data automation involves collecting data from sensors (e.g., barcode scanners) and entering the
data directly into a computer without human intervention.
- Functional Area Information Systems are designed to support a functional area by increasing its internal
effectiveness and efficiency.
- Functional area information systems provide information mainly to lower- and middle-level managers in the
functional areas via a variety of reports.
o Accounting and Finance
 Financial planning, Budgeting, Managing financial transaction
o Production/operations and logistics
 Inventory management, Quality control, Materials requirements planning
o Human resources management
 Recruitment, Performance evaluation, Employee records
o Marketing and sales
 Costumer relations, Costumer profiles and preferences
- Enterprise Resource Planning (ERP) systems integrate the planning, management and use of all resources of
the organization. ERP systems are designed to break down the information silos of an organization. Many
information systems were developed for specific functional areas and did not communicate with systems in
other functional areas. Therefore, these systems are referred to as information silos.
- A business process is a set of related steps or procedures designed to produce a specific outcome.
o Core ERP Modules
 Financial Management
 Support accounting, financial reporting, performance management and corporate
governance
 Operations Management
 These modules manage the various aspects of production activities
 Human Resource Management
 Support personnel administration
o Extended ERP Modules
 Customer Relationship Management
 Modules that support all aspects of customer’s relantionship with organization
 Supply Chain management
 Modules that manage the information flows between and among stage in supply
chain activities.
 Business Intelligence
 Modules that collect information used throughout the organization
 E-Business
 Costumer and suppliers demand access to ERP information.
o Benefits of ERP Systems :
 They can make organizations more flexible, agile, and adaptive.
 They can improve managers’ ability to make better, more timely decisions.
 They can improve customer service, production, and distribution.
o Limitations of ERP Systems :
 May require organizations to change existing business processes to fit the predefined
business processes of the ERP software.
 Can be complex, expensive, and time consuming to implement.
 SOCIAL COMPUTING
- WEB 2.0 Underlying Technologies
o AJAX: A web development technique that allows portions of web pages to reload with fresh data
instead of requiring the entire web page to reload
o Tagging: A tag is a keyword or term that describes a piece of information (e.g., blog, picture, article,
video clip)
o Blogs and blogging: A blog is a personal web site, open to the public, in which the site creator
expresses his or her feelings or opinions.
o Really Simple Syndication (RSS)
- WEB 2.0 Applications
o Blogs
o Wikis
o Netcasting  Podcast and Videocast
o Web 2.0 media  Video, music, photographs
o Printing-on-demand
o Crowdsourcing
- Categories of Web 2.0 sites
o Social Networking Sites: Allow users to upload their content to the web in the form of text, voice,
images, and video.
o Aggregators: Provide collection of content from the web (e.g., Technorati, Digg, Simple thred).
o Mashups: A web site that takes content from a number of other web sites and mixes them together
to create a new kind of content (e.g., SkiBonk, Healthmap, ChicagoCrime)
- Enterprise Social Network
o Social Oriented: Socially focused public sites, open to everyone. (Facebook, Google Orkut, G+)
o Professional networking: focused on networking for business professionals (linkedln)
o Media sharing: Netcasting, Web 2.0 media
o Communication: Blogs(blogger, wordpress), Microblogging(Twitter, tumblr)
o Collaboration: Wikis (Wikimedia, Pbworks)
o Social bookmarking: Focused on helping users store, organize, search, and manage bookmarks.
(delicious, google reader, CiteULike)
o Social news: focused on user-posted news story that are ranked by popularity based on
voting(reddit,digg)
o Events: focused on alerts for relevant events.(foursquare, eventful)
o Virtual meeting place: sites that are essentially three-dimensional worlds.
o Online marketplace for microjobs.
 COSTUMER RELANTIONSHIP MANAGEMENT
- Customer relationship management (CRM) is an organizational strategy that is customer-focused and
customer-driven.
o The Need for CRM :
 Tenets of CRM
 One-to-one relationship between a customer and a seller.
 Treat different customers differently.
 Keep profitable customers and maximize lifetime revenue from them.
o Lifetime Customer Value
 The value of a customer to a company depends on three dimensions:
 the duration of the relationship,
 the number of relationships (e.g., the number of products from a company that a
customer purchases), and
 the profitability of the relationship.
- Operational CRM is the component of CRM that supports the front-office business processes. That is, those
processes that directly interact with customers; i.e., sales, marketing, and service.
o Two major components of operational CRM
 Customer-facing applications
 Customer-touching applications
o Customer-facing applications are those applications where an organization’s sales, field service, and
customer interaction center representatives actually interact with customers.
 Customer service and support refers to systems that automate requests, complaints,
product returns, and requests for information.
 Customer Interaction Centers (CIC) – (callcenter, outbound telesales, inbound
telesevices)
 Sales force automation automatically records all the aspects in a sales transaction
process.
o Contact management system
o Sales lead tracking system
o Sales forecasting system
o Product knowledge system
 Marketing (Cross selling, up selling, bundling)
 Campaign management applications
o Customer-Touching Applications -- In customer-touching applications, customers interact directly
with online technologies and applications rather than interact with a company representative.
 Personalized web pages
 FAQs
 E-mail and Automated Response
 Loyalty Programs
- Analytical CRM systems analyze customer behavior and perceptions in order to provide actionable business
intelligence.
- Analytical CRM systems analyze customer data for a variety of purposes, including:
o Designing and executing targeted marketing campaigns
o Increasing customer acquisition, cross selling, and up selling
o Providing input into decisions relating to products and services (e.g., pricing and product
development)
o Providing financial forecasting and customer profitability analysis
- On-demand CRM is a CRM system that is hosted by an external vendor in the vendor’s data center.
- Mobile CRM is an interactive CRM system that enables an organization to conduct communications related
to sales, marketing, and customer service activities through a mobile medium for the purpose of building
and maintaining relationships with its customers.
- Open-source CRM is CRM software whose source code is available to developers and users.
 SUPPLY CHAIN MANAGEMENT
- Supply chain: refers to the flow of materials, information, money, and services from raw material suppliers,
through factories and warehouses, to the end consumers.
o Upstream component of a supply chain: sourcing or procurement takes place.
o Internal component of a supply chain: packaging, assembly, or manufacturing takes place.
o Downstream component of a supply chain: distribution takes place.

- The Flows of the Supply Chain :

o Material flows are the physical products, raw materials, supplies and so forth that flow along the
chain.
o Information flows are all data related to demand, shipments, orders, returns and schedules as well
as changes in any of these data.
o Financial flows are all transfers of money, payments and credit-related data.
- Supply chain management (SCM) is the function of planning, organizing and optimizing the supply chain’s
activities.
- Five Basic Components of Supply Chain Management
o Plan, Source, Make, Deliver, Return
- Basic Component Supply Chain Management:
o Interorganizational Information Systems (IOS)  involves information flows among two or more
organizations.
o The Push Model versus the Pull Model  make-to-stock and make-to-order
o Problems along the Supply Chain
 Two main sources of problems
 Uncertainties
 The need to coordinate multiple activities, internal units, and business partners.
 Demand forecast
 Bullwhip effect
o Solutions to Supply Chain Problems
 Using inventories
 Just-in-time inventory: a system in which a supplier delivers the precise number of
parts to be assembled into a finished product at precisely the right time.
 Information sharing
 Vendor-managed inventory: an inventory strategy where the supplier monitors a
vendor’s Inventory for a product or group of products and replenishes products
when needed.
- Information Technology Support for Supply Chain Management
o Electronic data interchange (EDI) is a communication standard that enables business partners to
exchange routine documents, such as purchase orders, electronically.
o Extranets link business partners to one another over the Internet by providing access to certain
areas of each other’s corporate intranets.
 SYSTEM DEVELOPMENT LIFE CYCLE
- The systems development life cycle (SDLC) is the traditional systems development method that
organizations use for large-scale IT projects.
- Systems Investigation
- Begins with the business problem (or opportunity) followed by the feasibility analysis.
o Feasibility Study  3 Options: Continue with existing system, Modify existing system, develop new
system.
 Technical feasibility: Assessment of whether hardware, software and communications
components can be developed and /or acquired to solve a business problem.
 Economic feasibility: Assessment of whether a project is an acceptable financial risk and if
the organization can afford the expense and time needed to complete it
 Organizational feasibility: Organization’s ability to access the proposed project.
 Behavioural feasibility: Assessment of the human issues involved in a proposed project,
including resistance to change and skills and training needs.
o Deliverable: Go/No-Go Decision
- System Analysis
- The examination of the business problem that the organization plans to solve with an information system.
o Main purpose is to gather information about existing system to determine requirements for the new
or improved system.
o Deliverable is a set of system requirements, also called user requirements.
- Systems Design
- Describes how the system will accomplish this task.
o Deliverable is the technical design that specifies:
 System outputs, inputs, user interfaces.
 Hardware, software, databases, telecommunications, personnel & procedures.
 Blueprint of how these components are integrated.
o Scope creep is caused by adding functions after the project has been initiated.
- Programming & Testing
o Programming involves the translation of a system’s design specification into computer code.
o Testing checks to see if the computer code will produce the expected and desired results under
certain conditions. Testing is designed to delete errors (bugs) in the computer code.
- Systems Implementation.  Implementation or deployment is the process of converting from the old
system to the new system
o Direct conversion. Implementation process in which the old system is cut-off and the new system
turned on at a certain point in time.
o Pilot conversion. Implementation process that introduces the new system in one part of the
organization on a trial basis, when new system is working property, it is introduced in other parts of
the organization.
o Phased conversion. Implementation process that introduces components of the new system in
stages, until the entire new system is operational.
o Parallel conversion. Implementation process in which the old system and the new system operate
simultaneously for a period of time. Rarely used today if at all.
- Operation & Maintenance
- Audits are performed to assess the system’s capabilities and to determine if it is being used correctly.
o Debugging: A process that continues throughout the life of the system.
o Updating: Updating the system to accommodate changes in business conditions.
o Maintenance: That adds new functionally to the system –adding new features to the existing system
without disturbing its operation.
 INTELLIGENT SYSTEM
- Intelligent systems is a term that describes the various commercial applications of AI.
- Artificial intelligence (AI) is a subfield of computer science concerned with:
o studying the thought processes of humans
o recreating those processes via machines, such as computer and robots.
- Artificial Intelligence (AI)
- Behavior by a machine that, if performed by a human being, would be considered intelligent.
o Turing Test
o Artificial Intelligence versus Natural (Human) Intelligence
- Expert System
o Expertise refers to the extensive, task-specific knowledge acquired from training, reading and
experience.
o Expert systems (ESs) attempt to mimic human experts by applying expertise in a specific domain.
Can support decision makers or completely replace them.
- Knowledge acquisition: Knowledge is from experts or from documented sources.
- Knowledge representation: Acquired knowledge is organized as rules or frames (objective-oriented) and
stored electronically in a knowledge base.
- Knowledge inferencing: Given the necessary expertise stored in the knowledge base, the computer is
programmed so that it can make inferences. The reasoning function is performed in a component called the
inference engine, which is the brain of ES.
- Knowledge transfer: The inferenced expertise is transferred to the user in the form of a recommendation.
- The Components of Expert Systems
o Knowledge base contains knowledge necessary for understanding, formulating and solving
problems.
o Inference engine is a computer program that provides a methodology for reasoning and formulating
conclusions.
o User interface enables users to communicate with the computer
o Blackboard is an area of working memory set aside for the description of a current problem.
o Explanation subsystem explains its recommendations.