CH. 9: BUSINESS INTELLIGENCE SYSTEMS

Business Intelligence is information containing patterns, relationships, and trends. What Business intelligence does, is that it provides technologies that provide historical, current and predictive views of business operations. Common functions are reporting, online analytical processing, data mining, process mining, and business performance. It aims to support better business decision making. In which a BI system can be called a decision support system. This analyzes mostly internal, structured data and business processes while competitive intelligence gathers, analyzes and disseminates information with a topical focus on company competitors. Reporting tools are programs that read data from a variety of sources, process that data, format it into structured reports, and deliver those reports to the users who need them. RFM Analysis is a technique readily implemented using reporting tools and used to analyze and rank customers according to their purchasing patterns. Online analytical processing is a part of the broader category of business intelligence, which also encompasses relational reporting and data mining. The typical applications of OLAP include business reporting for sales, marketing, management reporting, business process management, budgeting and forecasting. Market Basket Analysis is a modelling technique based upon the theory that if you buy a certain group of items, you are more or less likely to buy another group of items. For example, if you are at a Bar and you buy a pint of beer and don't buy a bar meal, you are more likely to buy chips at the same than somebody who didn't buy beer. The set of items a customer buys is referred to as an itemset, and market basket analysis seeks to find the relationships between purchases. The probability that a customer will buy beer without a bar meal is referred to as the support for the rule. The condiditonal probability that a customer will purchase crisps is referred to as the confidence. Knowledge management is the process of creating value from intellectual capital and sharing that knowledge with employees, managers, suppliers, customers, and others that need it. While reporting and data mining are used to create new information from data, knowledge-management systems concern sharing of knowledge that is known to exist. Santosus and Surmacz cite five primary benefits to KM: KM fosters innovation by encouraging the free flow of ideas; KM improves customer service by streamlining response time; KM boosts revenues by getting products and services to market faster; KM enhances employee retention rates by recognizing the value of employees’ knowledge and rewarding them for it; KM streamlines operations and reduces costs by eliminating redundant pr unnecessary processes.