Business intelligence. what it is and its implementation

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Business Intelligence Background

The term Business Intelligence or business intelligence is not so recent, the truth is that it is a concept that has been talked about, directly or indirectly, for 59 years.

The first person to speak of the term was Hans Peter Luhn, an IBM researcher, who, in his article "A Business Intelligence System" published in 1958, mentions the term and provides the following definition:

Hans was the first to address this issue, however it did not have much relevance at that time, although later add-ons emerged that would help improve business intelligence.

Edgar F. Codd, creator of the database concept. Twelve rules for its creation. Development of the first databases and the first applications (data) in systems, increasing the information available, but not business, which allowed data entry (input from were able to offer quick and easy access to such information Creation of the Datawarehouse concept and reporting (Ralph Kimball, Bill

1980 Inmon)

There were relatively powerful database systems but there were no applications to facilitate their exploitation.Introduction to the term Business Intelligence, Howard Dresner. 1989 • Decade of popularization of the concept, various applications are created that create access to the database and structured information generated by companies.

As can be seen, the term needed other elements to reinforce the scope that Business Intelligence intended to obtain, so it was in accordance with the evolution of technologies and information systems tools that allow today to have the notion of all the benefits that can be achieved. get by applying it.

What is business intelligence?

Business Intelligence is understood to be the set of methodologies, applications, practices and capabilities focused on the creation and management of information that allows users of an organization to make better decisions. (Curto Díaz & Conesa Caralt, 2012)

What business intelligence allows is practically to have a better overview through structured data so that the characteristics of problems or opportunities are known, thus generating knowledge so that they can be exploited or corrected.

It is a set of information systems that work in a coordinated way.

Some of the technologies that are part of Business Intelligence:

Data warehouse systems Reporting Data mining systems On-line Analytical Processing tools

OLAP), visual and predictive analytics

Knowledge management systems (KBS) Data mining Dashboards Data query and reporting tools Information dashboards (Dashboards)

It is important to know that to apply BI it is necessary to consider the magnitude of the information problems that the company may face, as this can lead to the failure of its implementation.

How to implement Business Intelligence?

Currently a new concept called Agile BI Governance is being proposed, which proposes architectures, methods and tools necessary to implement an infrastructure for BI.

It allows to know how to control a system of these characteristics, what policies should be applied, what control methods should be implemented and how BI systems should be governed. (Fernández 2008)

Agile BI Governance establishes 4 basic values, but depending on each organization it can include those that are related to its own strategy.

Continued adaptability. Uncertainty and continuous change are the natural state of decision-making systems, but it seems that many organizations are not yet aware of them. In this type of project the analytical point of view is always changing. Joint Work. The operational user of the software must be an active part within the information technology groups that develop the BI systems. Flexible hierarchies. The working groups within Agile BI Governance should be structured with flexible hierarchies that promote the exchange of information. People before processes. Prioritize the delivery of information to the people who control the processes and not so much in defining the processes that people have to control. (Fernández 2008)

When is business intelligence necessary?

There are various situations in the company that give evidence of the need to implement tools that allow improving decision-making in general, for example, according to (Rosado Gomez & Rico Bautista, 2010) there is a study carried out in Europe by Information Builders Ibéric, which shows the cost of the lack of decision-making systems in organizations.

According to these data, the average European employee spends an average of 67 minutes daily searching for company information, which is equivalent to 15.9% of their working day. For an organization of 1000 employees that earns about 50,000 euros a day this equates to 7.95 million euros a year of lost salary, all this for the search for information to make a decision. (Zumel, 2008) Although they do not represent statistics especially from Mexico, this example serves to really show the true relevance of obtaining reliable, proven, updated and fast information to reduce the problems that may arise and even increase effectiveness of the fulfillment of operations.

To complement and further clarify the situations in which it is necessary to implement a BI, the following list taken from (Curto Díaz & Conesa Caralt, 2012) is gathered:

Decision-making is carried out intuitively in the organization Identification of information quality problems Use of Excel as repositories of corporate or user information, known as Excel chaos Need to cross information in an agile way between departments.Avoid information silos. Marketing campaigns are not effective because of the base information used. There is too much information about an organization to be analyzed in a virtual way. A critical mass of data has been reached. It is necessary to automate the processes of information extraction and distribution.

How to detect that there is no strategy?

If there are some of the points mentioned below in the organization, it means that it is necessary to apply BI

Users identify IT as the source of their business intelligence problems Management sees business intelligence as another cost center Information technology department continues to ask end users about reporting needs It is not possible to measure the return on investment of projects There is no plan to develop, hire, retain and grow the BI team It is not known if the company has a strategy for BI There are multiple solutions in organization distributed in different departments that repeat functionality. There is no real and consistent training plan for using the tools.Someone believes that it is a success that the information consolidated this disposition of the end users after two weeks or after its stipulated date of delivery. (Curto Díaz & Conesa Caralt, 2012).

The development of a business strategy is a long-term process that includes multiple activities, among which it is worth highlighting:

Create a BI Competency Center. It has the objective of combining knowledge in technologies, methodologies and strategies with the presence of a sponsor at the executive level and with analysis of the businesses involved and that have shared responsibility for successes and failures Establish BI standards in the organization to rationalize both technologies existing as future acquisitions Identify which business processes need different analytical applications that work continuously to ensure that there are no silos of functionality Include the results of analytical applications (data mining or others) in the business processes with the objective to add value to all kinds of decisions. (Curto Díaz & Conesa Caralt, 2012).

Business Intelligence strategy

Data Warehouse

It is the process of extracting data from different applications (internal and external), so that once they are purified and specially structured, they are stored in a consolidated data warehouse for business analysis. It requires a combination of methodologies, techniques, hardware and software components that together provide the infrastructure to support the information processing (Stackowiak et al. 2007).

The structure that is defined must reflect the needs and characteristics of the business, its departments, work teams and managers, this will allow answering questions generated when trying to make decisions (Witten 2000) and over time it becomes the corporate memory (Wang 2009); describing the past and present of the company. Data Warehouse breaks down, summarizes, orders, and compares, but does not discover or predict. (Flowers 2004)

For the construction of a Data Warehouse three stages are established; the first is dedicated to examining the Entity Relationship schema of the operational database, generating the candidate multidimensional schemas.

The second stage consists of collecting user requirements through interviews, to obtain information about their analysis needs, and the third stage, contrasts the information obtained in the second stage, with the candidate multidimensional schemes formed in the first stage thus generating a solution that reflects user requirements (Zenaido 2008).

OLAP

Online analytical processing enables you to access organized and aggregated data from business data sources, organizes subsets of data with a multidimensional structure in a way that represents special meaning or answers a particular question. (Roussel 2006)

Types of OLAP systems

Traditionally, this system is classified according to the following categories:

An implementation that stores data in a relational engine. Typically, the data is detailed, avoiding aggregations and the tables are normalized. This implementation stores the data in a multidimensional database. To optimize response times, the summary of the information is usually calculated in advance: HOLAP (Hybrid OLAP). Stores some data in a relational engine and some in a multidimensional database.

Balanced scorecard

The Balanced Scorecard is a tool that allows aligning the objectives of the different areas or units with the company's strategy and monitoring its evolution.

The use that can be given to a Balanced Scorecard is so diverse that it is possible to contemplate staff self-evaluations (Martínez 2008), up to the definition of purely organizational concepts such as; the mission, the quality policy; communication plan, corporate image, training actions, catalog of services; preparing a client portfolio and taking actions to better understand their opinions and preferences, as well as to personalize the presentation of the service offer for the most important clients. In short, the execution of a scorecard is so broad and generous that it can change the way a service is provided in public entities.

Data Mining

It is the process of selecting, exploring, modifying, modeling and evaluating large amounts of data in order to discover knowledge (Pérez 2006).

The process must be automatic or semi-automatic. The models found must be significant demonstrating a certain pattern or rule of behavior. The most used applications are those that need some kind of prediction.

Data mining, allows effective real-time management, is a tool applicable to any type of company. A wide range of companies can have successful applications with it (Ángeles et al. 2010).

Benefits associated with data mining (López 2004):

Increase in results as a consequence of the increase in market share. Customer loyalty given a better response to their requirements. Performance improvement. Risk factor reduction. Optimization of strategies and decision-making. Optimization of management, maximizing returns

Business Intelligence Maturity Model

To implement a business intelligence project it is necessary to have effective coordination of the technologies and processes of the company

There is a model that allows classifying the degree of maturity of an organization. Business Intelligence Maturity Model consists of seven phases, which allow identifying which company is in for the application of Business Intelligence.

Phase 1. There is no BI. The data is found in online transaction processing systems (OLTP, Online Transaction Processing) scattered on other media or even only contained in the know-how of the organization. Decisions are based on intuition in experience but not on consistent data. The use of corporate data in decision-making has not been detected and neither has the use of adequate tools for the facts

Phase 2. There is no BI, but the data is accessible. There is no formal data processing for decision making, although some users have access to quality information and are able to justify decisions with said information. This process is often done using Excel or some type of reporting. It is felt that there must be solutions to improve this process, but the existence of BI is unknown.

Phase 3. Emergence of formal data-based decision-making processes. It is a team that controls the data and that allows to make reports against it that allow fundamental decisions to be made. The data is extracted directly from the transactional systems.

Phase 4 Data Warehouse. The negative impact against OLTP systems leads to the conclusion that a data repository is necessary for the organization is perceived. The Data Warehouse is perceived as a desired solution for the report.

Phase 5 Data Warehouse crisis and reporting is formalized. The Data Warehouse works and we want everyone to benefit from it so that corporate reporting is formalized. There is talk of OLAP but only a few really identify its benefits.

Phase 6 OLAP deployment. After a certain time, neither the reporting nor the way of accessing the Data Warehouse is satisfactory to answer sophisticated questions. OLAP is displayed for these profiles the decisions. Decisions begin significantly impact business processes throughout the organization.

Phase 7 Business Intelligence is formalized. There is a need to implement other business intelligence processes such as Data Mining, Balanced ScoreCard. Data quality processes impact processes, a corporate culture is established that clearly understands the difference between OLTP and DSS systems. (Curto Díaz &

Conesa Caralt, 2012)

Benefits of a business intelligence system

By managing to implement a BI allows different benefits and advantages.

It simplifies access to information and saves time in the preparation of reports. Standardizes processes allowing the elimination of manual processes for the generation of information. Provides unified and homogeneous information for all functional areas. Comprehensive view of the organization. Allows to create, Manage and maintain metrics and key performance indicators in key indicators of fundamental goals for the company Provide updated information both at aggregate level and in detail Improve the competitiveness of the organization as a result of being able to differentiate what is relevant and superfluous Access faster information and have greater agility  Detailed monitoring of the organization. Analysis flexibility. It allows detecting trends, opportunities and risks that can be translated into competitive advantages.Decision-making is based on reliable and accurate information Enables comprehensive communication with employees Enables the detection of criminal or fraudulent patterns Provides key performance indicators

conclusion

Thanks to modernization and especially to constant innovation in technologies, it was possible to reinforce and apply intelligence in business, since when it first appeared it was not given the importance it deserved because it was thought that the results would not be achieved. desired due to all the scope I needed to structure.

However, thanks to tools such as the data warehouse, data mining and online analytical processing, they allowed to improve the information processing of a company.

Really managing and systematizing all the information of an organization is not an easy task, but thanks to Business Intelligence it allows to know what is the best way to implement it and above all to be prepared with all the elements that make up the company to do it in the best way possible.

It is important to consider that this tool generates costs for the elements that are needed to implement it, but a cost-benefit analysis should be considered to recognize if its application is viable in the desired company.

Thesis topic: Business intelligence implementation for ADO group.

Objective: To improve the management of routes in the Veracruz region of the ADO group.

Thanks

To my dad and mom for always trusting in me and supporting me despite any adversity, to reach this new challenge of Mastery.

To my son and husband for giving me all the affection, love and patience that every day is my great motivation to get ahead.

Bibliography

Curto Díaz, J., & Conesa Caralt, J. (2012). Introduction to Business Intelligence. UOC Publishing.

Intelligence, B. (June 21, 2009). Easy Business Intelligence. Retrieved from

Manager, T. (July 31, 2017). Time Manager. Obtained from

www.timemanagerweb.com/2017/01/31/breve-historia-del-businessintelligence/

Pereira, E. (2017). Marketing. Obtained from

www.mercadeo.com/blog/2013/01/%C2%BFque-es-el-know-how/