a IBS Gurgaon

Introduction
The term Business Intelligence was coined in 1989 by

Howard Dresner of Gartner, Inc.

It was used more like a catchphrase that supported

various other related fields like data warehousing, decision support, forecasting, and data mining.

 Business intelligence is a set of tools, technologies,

applications, processes, and practices that aids in converting this data into useful knowledge.
It involves taking in raw data and transforming it into

useful information that will lead to better decisionmaking in business.

 These days, with data warehousing, organizations are

able to store huge quantities of data.

The collection of data has accelerated due to ETL

(extract, transform, load), and EAI tools.

Report generation has also speeded up due to OLAP

tools which are used for data analysis.

 Business intelligence is used for processing huge

quantities of data, digging out useful information from the data, and transforming that information into useful knowledge which can be used for taking effective decisions and actions.

Need for BI
An organization uses BI to: Enhance the quality of information and its appropriateness Understand the conditions in the marketplace and anticipate future trends Understand the changing consumer behavior and spending patterns Assess its position in relation to its competitors Understand the environment in which the organization is operating

 find

out what the competitors and the other organizations are doing Reduce the risk of making decisions based on guesswork or speculation Understand the potential and competencies of the organization Analyze and enhance the performance of various business processes in the organization

 Build strong coordination and communication within

and among various departments in the organization Gain quick access to real-time information that would help the organization to efficiently carry out the processes of budgeting, inventory management, branding, customer segmentation, customer retention, production planning, recruitment, career development, employee retention, etc. Reduce costs and maximize revenues

Tools of BI
BI tools include Forecasting Knowledge management Data warehousing Data mining

Forecasting
Although there are many different forecasting tools

and methods, they can be split into four general categories:

Judgment methods Market research methods Time-series methods Causal methods

Judgment Methods
Panels of experts can be assembled in order to reach

a consensus.
The Delphi Method is a structured technique for

reaching a consensus with a panel of experts without gathering them in a single location.

Market Research Methods

Market testing and market surveys can be valuable

tools for developing forecasts, particularly of newly introduced products.

In market testing, focus groups of potential customers

are assembled and tested for their response to products, and this response is extrapolated to the entire market to estimate the demand for products.

 Market surveys involve gathering these data from a

variety of potential customers, typically through interviews, telephone-based surveys, and written surveys.

Time-Series Methods
Time-series methods use a variety of past data to

estimate future data.

Some common time-series methods: Moving average: Each forecast is the average of some number of previous demand points. The key here is to select the number of points in the moving average so that the effect of irregularities in the data is minimized.

 Exponential smoothing: Each forecast is a weighted

average of the previous forecast and the last demand point. Thus, this method is similar to the moving average, except that it is a weighted average of all past data points, with more recent points receiving more weight.
Methods for data with trends: Regression analysis fits

a straight line to data points.

Causal Methods
Causal methods generate forecasts based on data other

than the data being predicted. More specifically, the forecast is a function of some other pieces of data. For example, the causal sales forecast for the next quarter may be a function of inflation, GNP, the unemployment rate, the weather or anything besides the sales in the quarter.

Selecting the Appropriate Forecasting Technique

What is purpose of the forecast? How is it to be

used? gross figures or exact figures What are the dynamics of the system for which the forecast will be made? How important is the past in estimating the future?

Knowledge Management System

Creating knowledge
Discovering and codifying knowledge Sharing knowledge

Distributing knowledge

Knowledge Management Definition

The system and managerial approach to collecting,

processing, and organizing enterprise-specific knowledge assets for business functions and decision making.

Knowledge Management Challenges

making high-value corporate information and

knowledge easily available to support decision making at the lowest, broadest possible levels Personnel Turn-over
Organizational Resistance
Manual Top-down Knowledge Creation Information Overload

Knowledge Management Perspectives

Process perspective (management and behavior):

consulting practices, methodology, best practices, elearning, culture/reward, existing IT new information, old IT, new but manual process Information perspective (information and library sciences): content management, manual ontologies new information, manual process Knowledge Computing perspective (text mining, artificial intelligence): automated knowledge extraction, thesauri, knowledge maps new IT, new knowledge, automated process

KM Perspectives

Databases
ePortals

Cultura l

Human Resources

Best Practices Learning / Education

Tech Foundation
Email

Consulting Methodology

Content/Inf o KMS Analysis Structure

Content Mgmt Ontology

Infrastructure

Notes
Search Engine

User Modeling
Web Mining Data/Text Mining

Dataware Technologies
(1) Identify the Business Problem (2) Prepare for Change (3) Create a KM Team (4) Perform the Knowledge Audit and Analysis (5) Define the Key Features of the Solution (6) Implement the Building Blocks for KM (7) Link Knowledge to People

Anderson Consulting
(1) Acquire (2) Create (3) Synthesize (4) Share (5) Use to Achieve Organizational Goals (6) Environment Conducive to Knowledge Sharing

Ernst & Young

(1) Knowledge Generation (2) Knowledge Representation (3) Knowledge Codification (4) Knowledge Application

Data Warehousing
A

data warehouse is the data (meta/fact/ dimension/aggregation) and the process managers (load/warehouse/query) that make information available, enabling people to make informed decisions. Data warehousing solutions are fundamentally different from operational systems because they have to evolve and grow as the business requirement for information changes over a period of time.

 Data warehouses are never static, in the same way that

business needs are never static.

In order to respond to todays requirement for

instantaneous access to any corporate information, the data warehouse must also be designed to provide that information in a performant way.

 In practice, this means that data warehouses must be

designed to change constantly.

As the business grows and changes, its needs will

change.
Data warehouses are designed to ride with these

changes, by always building a degree of flexibility within the system.

 In order to provide this flexible solution, it has been

found that the process that delivers a data warehouse has to be fundamentally different from a traditional waterfall method.
The underlying issue with data warehousing projects is

that it is very difficult to complete the tasks and deliverables in the strict, ordered fashion demanded by a waterfall method.

 This is because the requirements are rarely fully

understood, and are expected to change over time.

The knock-out effect is that architectures, designs, and

build components cannot be completed until the requirements are completed, which can lead to constant requirements iteration without delivery, i.e., paralysis by analysis.

Data Mining
Why Data Mining? -- Potential Applications

Database analysis, decision automation Market and Sales Analysis Fraud Detection Manufacturing Process Analysis Risk Analysis and Management Experimental Results Analysis Scientific Data Analysis Text Document Analysis

support,

and

Data Mining: Confluence of Multiple Disciplines

Database Systems, Data Warehouses, and OLAP
Machine Learning Statistics

Mathematical Programming
Visualization High Performance Computing

Data Mining: A KDD Process

Data Mining Models and Methods

Deviation Detection
Visualization Statistics

Link Analysis
Associations discovery Sequential pattern discovery Similar time sequence discovery

Predictive Modeling
Classification Value prediction

Database Segmentation
Demographic clustering Neural clustering

Deviation Detection
Identify outliers in a dataset. Typical techniques: OLAP charting, probability distribution contrasts, regression analysis,

discriminant analysis

Link Analysis (Rule Association)

Given a database, find all associations of the form:

IF < LHS > THEN <RHS >

Prevalence = frequency of the LHS and RHS occurring together Predictability = fraction of the RHS out of all items with the LHS e.g., Beer and diaper

Database Segmentation
Regroup datasets into clusters that share common

characteristics.
Typical techniques: hierarchical clustering, neural

network clustering (SOM), k-means

Predictive Modeling
Use past data to predict future response and

behavior. Typical technique: supervised learning (Neural Networks, Decision Trees, Nave Bayesian) E.g., Who is most likely to respond to a direct mailing

Data/Information Visualization
Gain insight into the contents and complexity of the database being analyzed
Vast amounts of under utilized data

Time-critical decisions hampered

Key information difficult to find Results presentation

Reduced perceptual, interpretative, cognitive burden