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Chapter 10

BUS 252 Chapter Notes - Chapter 10: Data Warehouse, Data Mart, Online Analytical Processing

Course Code
BUS 252

of 3
Chapter 10: Business Intelligence
Business Intelligence involves the use of computer techniques to analyse a wide array of data so as to
convert those data into useful information that can be used to enhance decision making.
Business Intelligence (BI) has emerged as a powerful tool that enables businesses to capture, analyze,
interpret, and report on data- this creating valuable information for the enterprise.
Implementing BI remains one of the top technology initiatives in many enterprises.
BI supports the analysis of data from any source (internal or external) to provide valuable information
for making operating, tactical, or strategic decisions.
BI differs from these other tools in that it is completely integrated approach to data management and
has been made possible by advances in technology such as the internet, ERP, and database systems.
Bi applications can be closely related to CRM strategies, because BI is often used for extended analysis
of data gathered by CRM systems. BI is more comprehensive than CRM, however, because it deals with
a wider variety of data.
BI applications can be used to identify potential operating problems based on historical data in the
system and deploy additional service and upkeep in that area. Essentially, it can be used anytime an
organization wants to better understand its data to improve decision making.
ERP vs. BI
The main reason ERP systems do not provide the analysis offered by BI system is that they were devised
as transaction-processing system.
ERP only contain data arising from transactions, while BI draws data from diverse sources, including
industry data, news reports and trade journals.
While ERP systems have succeeded in integrating the transaction systems of business, they have been
unable to satisfy all of the information needs, leaving a place for BI strategies.
ERP limitations in the intelligence area include the difficulty in incorporating additional data.
Benefits of BI
Some of the key benefits of BI include continuous rather than periodic management, improved
management of diverse business functions, improved collaboration, and improved understanding of
Continuous Rather Than Periodic Management
BI gives managers an opportunity to manage based on a continuous flow of information that is current
and accurate. In addition, the information can be correlated with other data at any time. BI can
contribute new insights on business performance to managers and improve their understanding of
business operations, reduce delays in decisions processes, and help them respond quickly to changes in
market conditions
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Chapter 10: Business Intelligence
Improved Management of Diverse Business Functions
A simple BI structure can help businesses monitor different functions including marketing, HR, and
finance at the same time. Marketing managers can use the data to analyze which products are profitable
and which should be eliminated. HR managers can use metrics and criteria to help identify highest-
quality employees, reduce employee turnover, and measure the effectiveness of training programs.
Fiae aagers a get a lear ie of the opay’s fiaial perforae, aalyze urret fiaial
conditions, and undertake financial forecasts.
Improved Collaboration
BI enables different divisions to share common data resource, which can produce a collaborative work
culture among employees. Working on the same database helps the company to more easily make
consistent decisions in a shorter period of time.
Improved Understanding of Customers
BI solutions enable usiesses to oitor ustoers’ purhasig ehaiour. Data arehouse gather
iforatio o ustoers’ ehaiours. The BI solutios help usiesses to lassify ad aalyze this
information according to a variety of criteria.
BI functions
BI tools should be considered an extension of the power of the ERP systems and focus on data
integration and organizations, data analysis, performance analysis, information dissemination, and
Data Integration and Organization
The source of data for BI can be numerous, including both internal and external data sources.
The BI application serves to integrate all of these data sources in a manner optimized for reporting and
A data warehouse is a central data repository used to organize, store, analyze, and report on data for
decision-making purposes.
In some organization, data warehouse are also divided into smaller, dedicated database known as data
Whether the BI system is based upon a data mart or data warehouse is of little significance when
considering the importance of BI. In either case, the data in the system will be structured around
Metadata: - is a structured definition of data.
Extraction, transformation, and loading (ETL) is the process of gathering data from a system, such as an
ERP system, which can be simplified and stored within data warehouse.
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Chapter 10: Business Intelligence
Data Analysis
The levels of data analysis may range from basic reporting on pre-configured of data cubes. Data cubes
are multi-dimensional database structures that allow quick drill-down and reformatting of data.
Many BI applications make sure of data cubes. Essentially, a data cube packages data into a cube-like
format that has data elements as blocks and data fields within each block.
BI allow users to have access to information that previously resided only in the information systems
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