Business intelligence is defined as the set of tools and technology that allow end users to quickly and easily access and analyze information to make business decisions to improve company performance.
Business intelligence or Business intelligence is a business strategy that aims to increase company performance or business competitiveness, intelligently organizing its historical data (transactions or daily operations), usually residing in a corporate Data Warehouse.
The concept of business intelligence was introduced in the mid-1960s and since then it has continued to evolve into more effective solutions adapted to the prevailing new technological environment and the needs of the company. With increasingly cheaper hardware and software, the creation of much more powerful processors, the hegemony of the Internet-Web and more efficient management software, the concept of business intelligence (BI) is placed within the reach of many Modern organizations who are interested in maximizing their investments in the IT area.
It all started with DSS (Decision Support Systems), then similar concepts such as EIS (Executive Information Systems) appeared, until reaching the current state of the art, BIs and BI-Web. (Lopez, sf)
In this article we will review the concepts related to business intelligence and its applications.
What is business intelligence?
Business intelligence is called the ability of companies to transform data into information and at the same time information into knowledge, in order to help decision-making. Business intelligence also known as Business intelligence is a set of processes and technologies that allow everyone in the organization to access the data necessary to obtain valid and useful information.
Business intelligence can be defined as the set of methodologies, applications and technologies that allow gathering, debugging and transforming data from transactional systems and unstructured information (internal and external to the company) into structured information, for direct exploitation (reporting, OLTP / OLAP analysis, alerts…) or for analysis and conversion into knowledge, thus giving support to business decision-making.
Business Intelligence (Knowledge, Information, Data)
If a company makes good use of business intelligence, it can serve as a strategic factor that turns it into a potential competitive advantage, in order to provide privileged information to respond to business problems: entering new markets, promotions or product offers, elimination of information islands, financial control, cost optimization, production planning, analysis of customer profiles, profitability of a specific product, etc… (Sinnexus, sf)
Business intelligence integrates company-wide data into a single warehouse from where users can make any type of query to extract and analyze existing data. This means that the objective of business intelligence is to preserve data so that end users have access to it and make their decisions based on their analysis. Business intelligence alone is not useful if the people who have access to the data do not make good use and analysis of it to make sound decisions. (Petrovic, 2008)
Data and information
A data refers to the symbolic representation of an entity that by itself has neither value nor meaning and does not have any effect on the person who receives it. However, if you process him properly, he can provide important information to aid decision making. The data can be associated and grouped with others in the same context to offer a meaning and useful message to the person who receives it. Example of data are the numbers, the letters of the alphabet, the drawings, the points, etc… (Izamorar, sf)
On the other hand, the organized data set that transmits a meaning with the purpose of reducing uncertainty and increasing knowledge is called information. The information is made up of a group of supervised and ordered data, which help to construct a message based on a certain topic. Information helps to solve problems since it allows adequate decision making.
| T able 1
D if erence between data and information |
|
| FACT | I NFORMATION |
| They are a Symbolic representation | Processed and organized data set |
| They have no semantic meaning | It has a meaning |
| They don't convey a message on their own | Transmit a message |
| Describe facts and situations | Helps solve problems |
Business intelligence tools
Business intelligence originates from information systems whose purpose was to collect information on a certain topic to make decisions. As new software and hardwares emerged, organizations became computerized and information systems began to support basic company processes such as sales, production, human resources, and others, which are called Management Information Systems.. Over time and after the need for companies to have a base that helps them make decisions, tools that knew these needs emerged called DSS (Decision support system) such as EIS and OLAP as well as the different technical tools of mining of data.
EIS (Executive information systems) are a set of tools and information systems that allow company executives to have access to the status of activities and their management. They allow to immediately report any change that occurs in the company, for this it analyzes the daily state of the organization using key indicators. The type of information that is regularly requested is usually weekly sales, partial balances and the level of stocks and at the same time it is represented by graphs in spreadsheets. (Perez Lopez & Santín González, 2007)
OLAPs (Online analytical processing) provide ease to manage and transform data to produce new data. The objective of OLAP is to speed up the consultation of large amounts of data.
Data mining tools aim to extract patterns and trends in order to predict future behaviors. Data mining analyzes the data, while OLAP and EIS facilitate access to information so that a more effective analysis can be made, which means that they support data mining.
The use of each tool will depend on the objective of the organization, for this it must start from a basic question, as we can see in the following table: (Braga, Valencia, & Carvajal, 2009)
Business Intelligence Tools
For the aforementioned systems to work, there must be a data warehouse or Warehouse which is a collection of internal or external historical data, which describes a context or domain-oriented study area that allows tools to be applied in order describe, summarize, and analyze data to aid decision making.
To load or feed the data, a system called ETL (Extraction, transformation, Load) is used, which is responsible for reading the data, incorporating new data, creating keys, etc. The following image explains how these systems work. (Perez Lopez & Santín González, 2007)
Introduction to data mining
Using BI business intelligence
Business intelligence provides managers with the information they need to know what's going on in the market. The type of information for this is:
- Follow up on local, national or international sales according to their presence in the market, keeping track of expenses and whether they go according to a previously established budget, if sales go according to the projections made
By measuring any aspect in the company using business intelligence, it can be detected if the planned is not being fulfilled or if the measurements are outside of what is established, and then investigate the causes and take the respective measures. Timely access to information, especially when there are unexpected changes, allows managers to implement changes almost immediately to avoid long-term consequences. In other words, if business intelligence is used efficiently, it can contribute to improving the performance of the company. For this, it must make use of management indicators such as income, profitability, service costs, etc.
Business intelligence can help companies track campaigns created to capture new customers or increase sales; If it is detected in time that said campaign is not giving the desired results, you can save millions of dollars by withdrawing on time. This is done by monitoring sales and customer feedback. In the accounting area, business intelligence can be used to reduce the number of past due accounts to be paid by identifying delinquent customers. It can also help identify the performance of a plant.
But for business intelligence to be effective, it is not enough just to have the necessary technology and information, it is vitally important that the people who are going to use it have the ability to make decisions that are in favor of the company.. Which means that business intelligence is not in itself a solution, in fact, what is going to improve the performance of the company is the ability of its managers and executives to make decisions based on business intelligence.
Business intelligence also plays a very important role in the daily activities of the company, since access to detailed information and you will see it at the right time can be vital to the completion of a specific task. Among the cases in which business intelligence is used for the day-to-day operations of the company is:
- Travel intelligence is used by business agencies to monitor flights to detect delays and to accommodate passengers on a new flight. In hospitals, business intelligence can be used to detect needs staff at peak times In restaurants, business intelligence can help detect waiting time at tables according to the number of people who attend and the time it takes to eat.The Walt Disney World's magic kingdom park uses the intelligence of businesses to know the waiting time to go to the games and in this way control the sale of tickets in order to avoid long lines.
Business intelligence is also of great help to improve the company's processes, this by identifying possible delays in daily operation before the customer detects it. This can prevent the problem from reaching the customer and making a complaint. Business intelligence in processes can be applied as follows:
- In a courier company dedicated to the collection and delivery of courier packages, workers can monitor packages and letters every hour to identify if there have been any delays and make the respective changes. This also allows them to inform the client about the progress of their delivery. It also allows to detect the delivery of the invoice once the service has been provided, thus identifying if there are delays and improving the situation.
On the other hand, business intelligence tools can help improve the customer service process by efficiently managing orders, expediting loans and other activities that directly affect the degree of customer satisfaction. Examples of companies that use business intelligence to manage their customer service include:
- Whirlpool applies business intelligence to manage product warranties, thereby improving customer satisfaction. Continental Airlines applies business intelligence to detect how full business-class cabins are and ensure that customers get more. valuable have access to them depending on the available places
Lastly, companies apply business intelligence to detect new business opportunities, such as knowing what kind of needs customers have that complement the service they provide. (Howson, 2009)
conclusion
Business intelligence is a set of tools and techniques whose purpose is to analyze the information that the company has collected in its day-to-day history in order to make decisions that allow it to improve its performance. It is very useful at the commercial level, at the process level and in the customer service area. Business intelligence alone does not offer any solution, only the ability of the people who are part of the company to use the information extracted to make sound decisions is what will determine the true value of the use of intelligence of business.
Bibliography
Howson, C. (2009). Business Intelligence strategies for a successful implementation.
Mexico: MacGrawHill.
Izamorar. (sf). Ishmael Zamora. Obtained from http://izamorar.com/cual-es-la-diferencia- entre-dato-e-informacion /
Lopez, P. (sf). IT Madrid. Obtained from http://www.itmadrid.com/blog/que-es-inteligencia- de-Negocios-Business-Intelligence /
Petrovic, D. (2008). SQL Server 2008. Mexico: McGraw Hil.
Sinnexus. (sf). Sinnexus. Obtained from
Thanks
To the Technological Institute of Orizaba for giving me the opportunity to train professionally and to Professor Fernando Aguirre y Hernández for all the knowledge he has shared with us on his subject Fundamentals of Administrative Engineering for
learn and hone my abilities to write quality scientific articles.
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