Business Intelligence As A Decision Making Tool

In today’s rapidly changing business environment, the need for very sensible and effective business information is acknowledged as being crucial for organizations not only to succeed, but even to survive. Business intelligence (BI) is a concept which refers to a managerial beliefs and a tool that is used in order to help organizations to manage and purify information and to make more precious business decisions.

Business Intelligence is becoming an important strategic tool for business management. BI software offerings can help companies gain insight into their business, make better decisions and ultimately improve business performance.

This research, “Business Intelligence as a tool in facilitating decision making in an organizations” aims to demonstrate how BI facilitates decision making process in an organization. So we will be concerned with many factors that inhibit BI, the main research questions that were addressed are:

Why an organization still prefers traditional IT (spreadsheets) than Business Intelligence?

What are the barriers that make an organization hesitate dealing with Business Intelligence?

Do people aware of Business Intelligence, its core components, and its important contribution in decision making?

What are the solutions that reduce this problem and motivate the organization to use Business intelligence?

To fulfill this need we are going to follow a certain procedure. We are going to distribute a survey among different levels and standards in organizations.

Based on results of the questionnaire and employees opinions, solutions and available choices can be considered to improve BI using in organizations in the Kingdom of Bahrain.

This research is recommending that using Business Intelligence applications are based on personalized and Web-enabled information analysis, knowledge management, and decision support system technologies, and will lead to meaningful and high quality information that people need.

TABLE OF CONTENTS

CHAPTER PAGE

I. INTRODUCTION…………………………………………………………………………. 4

Statement of the Problem……………………………………………………………. 5

Scope and Limitation of the Study………………………………………………. 5

Significance of the Study……………………………………………………………. 5

II. REVIEW OF RELATED LITERATURE

List of the Literature Reviewed……………………………………………………. 6

Summary of Literature Reviewed…………………………………………………. 7

III. RESEARCH METHODOLOGY…………………………………………………… 8

IV. PRESENTATION OF FINDINGS

BI factors effects decision making…………………………………………………. 9

Problems affect BI………………………………………………………………………. 13

Factors affect BI………………………………………………………………………. … 13

V. DICUSSION AND RECOMMENDATION

Discussion…………………………………………………………………………………. 19

Recommendation………………………………………………………………………… 20

REFRENCES………………………………………………………………………………………. 22

APPENDICES

Questionnaire…………………………………………………………………………….. 24

CHAPTER I

INTRODUCTION

Somebody argue what a good decision is. A good decision can be defined as one that enables organizations move closer to its objectives. But how do managers make sure that the decisions they are about to make will help the enterprise meet its goals?

To achieve these goals, companies should first analyze the way they make decisions and think about the information that managers need to facilitate for more confident and more rapid the decisions, as well as how they would like that information to be presented to them. Discussions of decision making will drive what information companies need to collect, analyze and publish.

With the help of information technology nowadays, there are so many ways to improve business effectiveness especially in the decision making process. Business Intelligence (BI) is one of the latest developments in information technology by using Decision Support Systems. It offers important tools for analyzing and presenting data to managers so they can make more informed decisions.

Business intelligence (BI) is a data-driven DSS that combines data gathering, data storage, and knowledge management with analysis to provide input to the decision process. The term originated in 1989; prior to that many of its characteristics were part of executive information systems. Business intelligence emphasizes analysis of large volumes of data about the firm and its operations. It includes competitive intelligence (monitoring competitors) as a subset under its umbrella.

Organizations normally, keep large amount of operational data, generated by daily transactions, in databases. These databases contain detailed information whereas managers need specific, summary information in decision making process. Using Business Intelligence, the data from separate source systems is loaded into a data warehouse through a process of extraction, transformation, loading and data is then transformed to useful information and knowledge.

Business intelligence is an umbrella refers to a variety of software applications that is used to analyze and design an organization’s raw data. It is made up of several related activities, including data mining, online analytical processing, querying and reporting.

Organizations use BI to identify new business opportunities, improve decision making, and cutting the costs. BI is more than a set of tools to work on data and more than a corporate reporting out of enterprise systems. CIOs use BI to classify incompetent business processes that are ready for reengineering.

With today’s BI tools, business people can start analyzing data themselves, rather than wait for IT to run complex reports. This democratization of information access helps DS-makers back up business decisions that would otherwise be based only on feelings and anecdote.

Implementations can be determined by technical and cultural challenges, in our research we want to find out the factors that inhibit using BI in Bahrain. Is it the poor quality and irrelevant data, or huge and vague of data or is it management resistance, or confuse between BI and traditional IT?

Although BI holds great promise, managers have to guarantee that the data feeding BI applications is clean and reliable so that users trust it.

Statement of the Problem

Although we are certain about the importance of Business intelligence to organizations, and even if they all admit that BI help in decision making, still there are some hurdles to adopt BI practices in many organizations.

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In this research we want to demonstrate the understanding of Business intelligence in Bahrain’s organizations, in order to show that they are not all using BI in the accurate way, since their understanding is limited to the traditional IT.

This study, “Business Intelligence as a tool in facilitating decision making in an organizations” aims to demonstrate how BI facilitates decision making process in an organization. It further aims to answer these questions:

Why an organization still prefers traditional IT (spreadsheets) than Business Intelligence?

What are the barriers that make an organization hesitate dealing with Business Intelligence?

Do people aware of Business Intelligence, its core components, and its important contribution in decision making?

What are the solutions that reduce this problem and motivate the organization to use Business intelligence?

Scope and Limitation of the Study

This research on Business Intelligence is a broad subject to deal with. Nevertheless, and for the principles of presenting findings in apparent method, limiting the scope of the research has been considered necessary. As such, this study will deal specifically on the Business Intelligence as a tool to facilitate decision making in organizations in the Kingdom of Bahrain, with focus on its challenges and recommended solutions to overcome these, and the available future opportunities for Business intelligence.

Significance of the Study

By presenting this study of Business Intelligence usage in organizations to facilitate decision making, this research is expected to further contribute towards strengthening the dramatic expansion which has opened the door to benefit from such Business Intelligence (BI) systems by the suppliers, customers, and other business stakeholders of an organization for customers relationship management, supply chain management, and other e-business applications and to provide the key business information and the analytical tool for managers, business professionals and stakeholders.

CHAPTER II

REVIEW OF RELATED LITERATURES

For an extensive review and a deeper understanding of the subject under study – BI – various literatures have been reviewed. The different literatures investigated and their significant points gathered could be summarized as follows:

List of the Literature Reviewed

1.What is Business intelligence?

According to Kulkarni et al., (2007) Business intelligence system is a strategic information system that provides actionable information using a centralized data warehouse, which is taken from many sources, and then converted into meaningful information through BI analytical tools, leading to informed decisions. Business intelligence highlights analysis of large amount of data about the organization and its operations. The major goal of BI is to improve the correctness and the quality of the input to the decision process.

Elbashir HYPERLINK “http://informationr.net/ir/14-4/paper417.html#Elb08″et alHYPERLINK “http://informationr.net/ir/14-4/paper417.html#Elb08”. (2008) believes that providing timely, relevant and easy-to-use information and to increase the ability to analyse business information for the sake of improving decisions made by managers among a broad range of business activities is the main purpose of BI. The aim of such systems is to support knowledge workers at different levels in organisations

-4/paper417.html#Epp06″Eppler (2006) commented that such systems mainly support analytical decision-making and are used in knowledge-intensive activities. These activities have three important characteristics: they are often non-routine and creative (unclear problem space with many decision options), their specifications cannot be predefined in detail, their outcome is uncertain and yet their success often brings innovations and improvements.

Marco (2002) contends a true enterprise-wide Knowledge Management solution cannot exist without a BI-based meta-data repository. In fact, a meta-data repository is the backbone of a KM solution. That is, the BI meta-data repository implements a technical solution that gathers, retains, analyses, and distributes business knowledge which leads to a competitive advantage in the market.

Turban HYPERLINK “http://informationr.net/ir/14-4/paper417.html#Tur08″et al.HYPERLINK “http://informationr.net/ir/14-4/paper417.html#Tur08” (2008) compared BI to earlier decision support systems, business intelligence systems are derived from the concept of managerial information systems and provide artificial intelligence techniques as well as powerful analytical techniques, such as predictive analytics, online analytical processing, data mining, dashboards and scorecards, alerts and notifications, querying and reporting and data visualisations.

Since data mining is a core function of business intelligence we will spot the light on the definition of it. Data mining is “the extraction of hidden predictive information from large databases”, is a powerful new technology with great potential to help companies focus on the most important information in their data warehouses. Data mining tools predict future trends and behaviors, allowing businesses to make proactive, knowledge-driven decisions. The automated, prospective analyses offered by data mining move beyond the analyses of past events provided by retrospective tools typical of decision support systems. Data mining tools can answer business questions that traditionally were too time consuming to resolve. They scour databases for hidden patterns, finding predictive information that experts may miss because it lies outside their expectations.

Negash (-4/paper417.html#Neg04″2004) refers to business intelligence systems as systems that “combine data gathering, data storage and knowledge management with analytical tools to present complex internal and competitive information to planners and decision makers”.

2. Why to measure BI?

The measurement of business performance has long traditions in organizations. It is a practical managerial tool that can be applied in various situations and for different purposes. In the context of Business Intelligence, too, some authors have identified its measurement as a common view among researchers is that the measurement of BI is difficult to carry out (Gartz 2004; Hannula and Pirttimäki 2003; Simon 1998) and only few organizations have any mechanism in place to measure the value of CI (Marin and Poulter 2004). Thus, measurement is considered an important phase of BI but at the same time it is considered difficult to carry out in practice.

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According to Lönnqvist and Pirttimäki (2006), there are two main purposes for measuring BI: the assessment of BI in order to prove that it is worth the effort and the measurement of BI activities in order to help manage a BI process.

Summary of Literature Reviewed

All the related literatures reviewed confirmed that business intelligence “combine data gathering, data storage and knowledge management with analytical tools to present complex internal and competitive information to planners and decision makers”. The above definitions share the same idea that these systems gives actionable information delivered at the right time, right position and in the right form to aid decision-making. The main purpose is to improve the quality of input data, in order to improve decision making.

CHAPTER III

RESEARCH METHODOLOGY

Data -Gathering Methodology Employed

Meanwhile, we have collected secondary data on BI from books, journals, newspaper articles, and the Internet. It was employed as background information to formulate the questionnaire sent out to the respondents. The respondents were given the freedom to answer the questions on line.

This research is conceived as a qualitative study. It aims to describe and understand the factors that contribute to implement BI as well as those prevent its practice.

To achieve this goal, we prepared an online questionnaire, which has been deployed among different levels of employees in different organizations in Bahrain. Understanding the advantages and disadvantages of questionnaire as a data gathering technique is used in order to enhance the outcome of the research.

We have used the tabulated questions in the questionnaire to direct the research to a certain conclusion.

There were 65 respondents for this research (Appendix A) which have been asked to fill up the questionnaire.

Profile of Respondents

The sample of our research consist of 62 employees working at different organizations in Bahrain under both the private and public sectors 55% of them are Males and 45% are females. The adults represent 87% of the surveyed sample. They are at various level of education ranging from PhD to less than diploma. 75% of the sample are normal staff, but we have a 25% of managers and senior managers.

CHAPTER IV

FINDINGS AND RESULTS

The findings of 62respondents of the research of Business Intelligence as a tool in facilitating decision making in an organizations, as provided in Appendix I, indicates factors affect decision making, and further the factors of BI, moreover, the problems affect BI. These could be summarized as follows:

Problems affect BI

As concluded from the survey shortage of data, management reluctant, cost of implementation and IT illiterate employee are all problems facing Business Intelligence; which proves the said argument.

The Factors affects BI

Question from 12 to 17 in our questionnaire, revolve around providing timely, relevant and easy-to-use information (market and competitor information), along with knowledge workers (trained staff) in order to achieve BI goals.

An average of 85% agreed that knowledge and training is a crucial factor of BI to lead to a better decision making.

CHAPTER V

DISCUSSION AND RECOMMENDATION

DISCUSSION

The research findings through the questionnaires conducted, as summarized in chapter IV for Business Intelligence as a tool to facilitate decision making, have conclude that the good decision making is accomplished with the perfectness use of BI tools, as similarly identified in the related literature review in chapter II. These could be conducted as:

All mentioned literature reviews agreed on the definition of business intelligence, and its impact on the decision making. By referring to our research respondent who also approved that Business intelligence, is a sunshade term which refers to a variety of software purposes used to analyze an organization’s unprocessed data. BI as a discipline is made up of several related activities, including data mining, online analytical processing, querying and reporting which leads to improve the correctness and the quality of the input to the decision process.

According to the survey (Q4, Q8, Q15) most of the respondent agreed with what Kulkarmi suggested that BI is an actionable system that use centralized data warehouse. Also the majority of them agreed with him that the goal of BI is to improve the quality of input to decision making, (Q6, Q11, Q15). Business Intelligence and data warehouse have been developed enough to support both business analytical and operational needs. An organisation should have an open mind and apply the technologies smartly to meet any business challenges.

Awareness of the benefits of Business Intelligence and training of employees are crucial factors affect BI as concluded from the survey which also supports Elbashir review, with the help of BI systems, employees adjust their individual and team work practices, which leads to improved performance among the gathered data and reports. (Q12-17)

By referring to (Q11) which is reported that decisions might go wrong in an organization, because of several factors affected by poor quality of data, poor implementation, insufficient data which support Kulkarmi’s and Eppler review which leads to take poor decision making. Respondents agree them, that their organizations were having wrong decision because of insufficient and due to poor implementation.

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To implement a BI system, steps should be considered as follows:

organizations should first analyze the decision making process and consider the information that executives need to achieve more confident and correct decisions as well as how they’d like that information to be presented to them (for example, as a report, a chart, online, hard copy).

RECOMMENDATION

To be conclude with, Organizations use BI to improve decision making, cut costs and identify new business opportunities. BI is more than just corporate reporting and more than a set of tools to extract data out of enterprise systems. CIOs and managers use BI to identify inefficient business processes that are ripe for re-engineering. Although Executives have to ensure that the data feeding BI applications is clean and consistent so that users trust it.

At the end we should mention who should lead the way; everyone involved in the process must have full access to information to be able to change the ways that they work. Sharing is an important issue to success. BI projects should start with top executives, to the normal employees. They should be more likely to grip the tool which is facilitating their work.

Good BI systems need to give context. They need to explain what factors influencing the business, when implemented strategically, ought to fundamentally change how companies operate and how people make decisions, CIOs need to be extra attentive to users’ feelings.

High-quality data

This is a prerequisite for consistently sound decision making. The greater you understand of your organisation, your competitor and your environment, the more you can move from guess work to making strategic choices.

Training employees to the new technology

Employees need to be trained to use advanced technologies in order to participate in crucial decisions, the software should be user friendly enough so that employees make use of it easily, otherwise it would be worthless.

Sound judgement

Decision-making processes, whether formal of not, need to leverage the strengths of human intuition. Data does not run organisation; people do.

Trust

To gain employees’ confidence in management decisions, establishing transparency and trust is at least as essential as a good track record.

Flexibility

Approaches to decision making, and even to the use of data, need to reflect the fact that the world is a diverse place, and one size does not always fit all.

We also recommend more tips for getting BI right one of them is analyzing how executives make decisions, consider what information executives need in order to facilitate quick, accurate decisions.

Moreover they should pay attention to data quality as mentioned above and develop performance metrics that are most related to the business . Provide the context that influences performance metrics. And they should keep in mind that BI is more than decision support. Due to the development of high quality technology and the way CIOs are implementing it, BI now has the potential to renovate organizations. CIOs who successfully use BI in their organizations to increase the processes’ performance, reach their final goals more successfully than those who are using basic reporting tools.

REFRENCES

Gartz, U. (2004) “Enterprise Information Management”, in Business Intelligence in the Digital Economy: Opportunities, Limitations and Risks, Raisinghani, M. (Ed.), Idea Group Publishing, Hershey.

Hannula, M., Pirttimäki, V. (2003) “Business Intelligence – Empirical Study on the Top 50 Finnish Companies”, Journal of American Academy of Business, Cambridge, Vol. 2, No. 2, pp593-599.

Marin, J., Poulter, A. (2004) “Dissemination of Competitive Intelligence”, Journal of Information Science, Vol. 30, No. 2, pp165-180.

Bouzeghoub, M. & Lenzerini, M. (2001). Introduction to data extraction, cleaning and reconciliation: a special issue of Information Systems: An International Journal. Information Systems, 26(8), 535-536.

Chamoni, P. & Gluchowski, P. (2004). Integration trends in business intelligence systems: an empirical study based on the business intelligence maturity model. Wirtschaftsinformatik, 46(2), 119-128.

Petter, S., DeLone, W. & McLean, E. (2008). Measuring information systems success: models, dimensions, measures and interrelationships. European Journal of Information Systems, 17(3), 236-263.

Gangadharan, G.R. & Swami, S.N. (2004). Business intelligence systems: design and implementation strategies. In V. Lužar-Stiffler and V.H. Dobrič (Ed.), Proceedings of 26th International Conference on Information Technology Interfaces (ITI 2004) (Vol. 1, pp. 139-144). Cavtat, Croatia. Zagreb, Croatia: University Computing Centre.

Gefen, D. & Straub, D. (2005). A practical guide to factorial validity using PLS-graph: tutorial and annotated example. Communications of the Association for Information Systems, 16(5), 91-109.

Gefen, D., Straub, D.W. & Boudreau, M.C. (2000). Structural equation modeling and regression: guidelines for research practice. Communications of the Association for Information Systems, 4(7), 1-80

Appendix A

65responses

Summary See complete responses

18. What do you think we need to develop BI in an organisation which leads managers to take better decision making?

-I believe all industry need’s IB, but each industry needs different IB structure, some needs’ very sophisticated and some needs very simple IB. IB it has several Components, and it looks at the Customers Behavioral and needs too, but before you implement IB you need the followings: 1- Very Strong, Clean and Centralized Database, 2- Data Mart, 3- Also you need Customer Relationship Management CRM system “Analytical and Operational” This will help BI to function very well Specialist business intelligents people.People who can use the data available to them…..organizations should t…

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