1 C.olszak Business Intelligence For Information...
1 C.olszak Business Intelligence For Information...
BUSINESS INTELLIGENCE
FOR INFORMATION SOCIETY
Introduction
Leveraging information is a key success factor for companies and the whole
societies. Business Intelligence (BI) is a broad category covering technologies,
applications and processes responsible for the collection, storage, data access and
analysis that can help users in making more effective decisions1. It is consid-
ered as a new working culture with information and a specific methodology that
would refer to working with information and knowledge, open communication,
and knowledge sharing2.
The research questions I ask in this study are: (1) what possibilities may of-
fer BI systems for the information society and first of all for different enterprises,
(2) what kinds of BI models and applications can be used in the enterprises and
what are the implications for them.
The study was based on: (1) a critical analysis of literature, (2) a observation
of different BI initiatives undertaken in various enterprises, as well as on (3) semi-
structured interviews conducted in polish enterprises in 2012. Some interviews,
conducted in 20 polish enterprises, were held with over 80 responders: executives,
senior members of staff, and ICT specialists They represented the service sector:
telecommunications (T)-4, consulting (C)-4, banking (B)-4, insurance (I)-4, mar-
keting agencies (MA)-4.
1
B.H. Wixom, H.J. Watson: The BI-based Organization. “International Journal of Business Intel-
ligence Research” 2010, Vol. 1, No. 1, pp. 13-28; A. Schick, M. Frolick, T. Ariyachandra: Com-
peting with BI and Analytics at Monster Worldwide. Proceedings of the 44th Hawaii International
Conference on System Sciences, 2011.
2
S. Negash, P. Gray: Business Intelligence. In: Decision Support Systems. Ed. F. Burstein,
C.W. Holsapple. Springer, Berlin 2008, pp. 175-193.
12 Celina Olszak
and in the coming years. Then, M. Castells8 analyzed the social and economic
changes associated with the technological revolution, described the global econo-
my as a constant flow of information and created a theory of the network society.
Nowadays, many authors confirm that the rapid development of ICT, includ-
ing the Internet, contribute to radical changes in the functioning of society and
economy9.
It should be noticed that the topic of information society is also in the center
of attention of many countries. They have incorporated the idea of building the in-
formation society into their strategic planning. They have noticed new develop-
ment possibilities as well as an opportunity to become attractive partners on the
global and competitive market. In Europe Union, one of the first documents, treat-
ed on information society was the report called Bangemann report10. Also, Poland
saw a great opportunity for itself in a transformation of society into the informa-
tion society. The opportunity to accelerate economic development and to become
more competitive partner in the international arena.
An analysis of different concepts of information society has led to the adop-
tion, for the purposes of this article, of the following definition: the information
society is a society that has unlimited access to ICTs, information and knowledge,
and can use them to achieve different objectives of social, economic, cultural, ed-
ucational, etc. nature11. The aim of the information society is to gain competitive
advantage internationally, through using ICT in a creative and productive way.
ysis that can help users in making more effective decisions. BI system can be
also defined as an integrated set of tools, technologies and programmed products
which are used to collect, integrate, analyze and share data12. It is composed of
a set of the following essential components13:
–– ETL (Extraction-Transformation-Load) tools responsible for data transfer
from operational or transaction systems to data warehouses;
–– data warehouses, environment to store, aggregate and analyze data;
–– analyzing, reporting and presenting tools, such as: OLAP (tools which allow
access and which analyze and model business problems and share informa-
tion that is stored in data warehouses), data mining (tools for determining pat-
terns, generalizations, regularities and rules in data resources), reporting and
ad hoc inquiry (tools for creating and utilizing different synthetic reports),
drill down reports;
–– presentation layers that include customized graphical and multimedia inter-
faces or dashboards to provide users with information in a comfortable and
accessible form.
The role of BI and its impact on organizations and the whole society has been
changed14. There are distinguished 3 ages in the development of BI: BI 1.0, BI 2.0,
Bi 3.0 (Table 1).
The first age of BI, called BI 1.0. falls on seventies and eighties of XX cen-
tury. It is closely related with the management information systems (MIS), ex-
ecutive information systems (EIS), and decision support systems (DSS). Gen-
erally, the first applications from this age were dedicated on mainframes. They
were able to process the simple tasks for operational and tactical management.
They were characterized by production the simple reporting and represented sim-
ple, static applications. Individual reports were written by expert programmers.
BI 1.0 was focused on “delivery to the consumer” and market leaders include:
SAS, IBM15.
12
J. Reinschmidt, A. Francoise: Business Intelligence Certification Guide. “International Technical
Support Organization”, IBM, San Jose, CA 2000.
13
C.M. Olszak, K. Batko: The Use of Business Intelligence Systems in Healthcare Organizations
in Poland. Computer Science and Information Systems (FedCSIS), 2012, pp. 969-976. IEEE on-
line, http://www.ieeexplore.ieee.org.
14
P.R. Clavier, H. Lotriet, J. Loggerenberger: Business Intelligence Challenges in the Context of
Goods-and Service-Domain Logic. 45th Hawaii International Conference on System Science,
IEEE Computer Society 2012, pp. 4138-4147.
15
S.J. Gratton: BI 3.0 The Journey to Business Intelligence. What does it mean? http://www.
capgemini.com.technology (retrieved: 14.10.2012).
BUSINESS INTELLIGENCE FOR INFORMATION SOCIETY 15
Table 1
The three ages of Business Intelligence
BI 1.0 BI 2.0 BI 3.0
Specification
(Tool-centricity) (Web-centricity) (Application-centricity)
User interface Client Web Multi-device
Design priority Capability Scalability Usability
Functionality Aggregate and present Explore and predict Anticipate and enrich
Frequency/detail monthly/detailed weekly-daily-summary Real-time/processes
Client use case Operational reconcillation Enterprise alignment Social empowerment
Insight scope Mile deep inch wide Mile wide inch deep Outcome-specific
Uptake/reusability <1%/limited <15%/some >25%/entire application
Foundational Creation, delivery &
Delivery only Creation & delivery
Influences management
Source: S.J. Gratton: BI 3.0 The Journey to Business Intelligence. What does it mean? http://www.capgemini.
com.technology (retrieved: 14.10.2012).
16
D.J. Power: A Brief History of Decision Support Systems, http://www.dssresources.com/history/
dsshistory.html (retrieved: January 2007).
17
S. Negash, P. Gray: Op. cit., pp. 175-193; T.H. Davenport, J.G. Harris, R. Morison: Analytics at
Work: Smarter Decisions, Better Results. Harvard Business Press, Cambridge 2010.
16 Celina Olszak
cial media posts, free form web content, images, and video files)18. BI 3.0 is con-
centrated on “creation, delivery and management for consumers”19. According to
Scott20 there are 5 core attributes that support BI 3.0 philosophy: proactive, real-
time, integrated with business processes, operational (available to line workers),
and extended to reach beyond the boundaries of the organizations to improve in-
formation delivery and decision support functionality for all. According to Chat-
ter21 there are 3 prerequisites for software tools to be recognized as a BI 3.0 tools:
be social, relevant (automatically delivers relevant insights that users really need
according to their situation and user profile), fully self-service (intuitiveness). It is
indicated also that there is no reason to depreciate in BI 3.0 the functions (known
from BI 2.0) like: reporting, OLAP, data mining. They have still their strong posi-
tion. BI 3.0 philosophy is to raise the added value of BI tools’ architecture by an-
choring collaborative style of information search and analysis with intuitive and
self-service user interface that delivers timely and highly relevant insights to any-
one who is properly authorized and needs them22.
2. Research methodology
The study was based on: (1) a critical analysis of literature, (2) a observation
of different BI initiatives undertaken in various enterprises, as well as on (3) semi-
structured interviews conducted in polish enterprises in 2012. Some interviews,
conducted in 20 polish enterprises, were held with over 80 responders: executives,
23
C.M. Olszak: The Business Intelligence-based Organization – New Chances and Possibilities.
Proceedings of the International Conference on Management, Leadership and Governance.
Ed. V. Ribiere, L. Worasinchai. Published by Academic Conferences and Publishing International
Limited Reading UK 44-118-972-4148, 2013, pp. 241-249; T.H. Davenport, J.G. Harris, R. Mori-
son: Op. cit.; P. Hawking, S. Foster, A. Stein: The Adoption and Use of Business Intelligence Solu-
tions in Australia. “International Journal of Intelligent Systems Technologies and Applications”
2008, Vol. 4, No. 1, pp. 327-340.
24
C.M. Olszak, E. Ziemba: Business Intelligence Systems in the Holistic Infrastructure Develop-
ment Supporting Decision-making in Organizations. “Interdisciplinary Journal of Information,
Knowledge and Management” 2006, Vol. 1, pp. 47-58.
18 Celina Olszak
senior members of staff, and ICT specialists They represented the service sector:
telecommunications (T)-4, consulting (C)-4, banking (B)-4, insurance (I)-4, mar-
keting agencies (MA)-4. All of them had at least 5 years of experience in BI. In-
terviewees were selected on their involvement in BI or on their ability to offer an
insight based on experience in BI and related decision support systems. The sur-
vey was conducted in 2012 among purposefully selected firms (in Poland) that are
considered to be advanced in BI.
The research was of qualitative nature and was conducted within wid-
er research project “Using BI tools in polish enterprises” and partly with-
in project devoted to “Using software tools in Polish add Czech border region”
(CZ.3.223.2.0412.02994). Types of core interviews questions relevant to this pa-
per are reflected in Table 2.
3. Research findings
Table 2 contd.
1 2 3
Do you use BI for analyzing customers, suppliers, BI for analyzing customers (17), suppliers (14),
8
competitors and other business partners? competitors (5), other stakeholders (4)
Regional data warehouse (9), centralized data
9 What kind of BI software do you use?
warehouse (5), operational data bases (6)
Success: acquiring new customers (14), acquiring
new suppliers (11), increase of sale (8), fraud
detection (6), launching new channels of sale (3),
launching new products (3). Failures: not trust in
10 Describe some successes/failures from using BI
BI (4), gap between BI/ business (12), users do
not recognize their own data after it is processed
(7), decision-making skills absent (6), BI is
expensive (5)
Better access to data (13), better decisions (12),
improvement of business process (9), improved
11 Indicate some benefits from using BI business performance (8), costs saving (7),
transparency of information (5), new way of
doing business (2)
4. Discussion
The survey has shown that BI may provide a balanced picture of the enter-
prise and its environment to the managers. BI may be treated as an analytical
process that transforms scattered information about internal business processes,
customers into relevant, accurate and usable strategic knowledge on market evo-
lution, business opportunities and threats (Table 3).
Table 3
Selected answers concerning using BI models and obtained benefits
1 2 3
(1) Determine high-profit product profiles and
customer segments, provide detailed, integrated
Enterprise-wide BI architecture,
customer profiles, develop of individualized
BI-PA, customer profiling and
Telecommunication frequent-caller programs, determine future
segmentation, customer demand
customer needs; (2) Forecast future product needs
forecasting
or service activity, provide basis for churn analysis
and control for improving customer retention
(1) Reduction in the turnaround time for preparation
of reports, direct and faster access to the data
needed to support decision-making, analyze the
Data warehouse, BI-PA, data
flow of businesses across services, regions, clients,
marts, analysis of parameters
pricing, currencies, and market factors in time
Consulting importance, identification of
etc.; (2) Forecasting and estimating of customer
sales and inventory, optimization
demand (in short and long term); (3) Service and
orders, marketing companions
product distribution plans of a companies are in
place to meet its customer expectations, inventory
requirements are more accurately
20 Celina Olszak
Table 3 contd.
1 2 3
(1) Determinate the overall profitability of
individual customer, current and long term, provide
the basis for high-profit sales and relationship
banking, maximize sales to high-value customers,
reduce costs to low-value customers, provide the
Data warehouse, BI-PA, means to maximize profitability of new products
customer profitability analysis, and services; (2) Establish patterns of credit
Banking
credit management, problem progression by customers class and
branch sales type, warn customers to avoid credit problems,
to manage credit limits, evaluate of the bank’s
credit portfolio, reduce credit losses; (3) Improve
customer service and account selling, facilitate
cross selling, improve customer support, strengthen
customer loyalty
(1) Analyzing detailed claims and premium
history by product, policy, claim type, and other
Regional data warehouses, data
specifics; (2) Developing marketing programs on
mining, OLAP, data marts, claims
Insurance client characteristics, improving client service;
and premium analysis, customer
(3) Identification high-risk market segments
analysis, risk analysis
and opportunities in specific segments, reducing
frequency of claims
(1) Better understanding of customers,
identification their place in a customer lifetime
cycle and customer segments for marketing
campaigns; (2) Providing analyses of customer
transactions (what is selling, who is buying); (3)
Regional data warehouses, OLAP,
Monitor customer loyalty by evaluating which
marketing companions, customer
Marketing agencies customers are loyal and which are likely to leave;
profiling and segmentation,
(4) Identify which products are most profitable
customer demand forecasting
and monitor customer behavior in purchasing
products. By closely tracking sales performance
and consumer behavior, companies are able to
set better marketing strategies and ensure proper
allocation of marketing funds
Conclusion
The main conclusion of this study is that BI may offer different possibilities
for the enterprises. They include first of all: making more effective decisions, im-
proving business processes, and business performance. Observation and conduct-
ed discussions with interviews let me to state, that, unfortunately, the enterprises
used BI very seldom for building expert’ nets, social capital management, creating
the active communities, and knowledge sharing. Most of them stay still at the age
of BI 2.0. It means that they are focused more on the internal business processes
than on the environment: competition, users in social media etc.
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BUSINESS INTELLIGENCE FOR INFORMATION SOCIETY 23
Summary
The main goal of this paper is to present the basic assumptions underlying the idea of
Business Intelligence (BI) and to identify the possibilities of it using for information soci-
ety, and first of all in different organizations. The paper provides valuable information on
the chances and the possibilities of BI applying for information society.