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Table of Contents
1.

Introduction .................................................................................................................................... 1
1.1.

Basic Definitions ...................................................................................................................... 1

Data Warehouse ............................................................................................................................. 1


OLTP (Online Transaction Processing) ............................................................................................ 2
OLAP (Online Analytical Processing) ............................................................................................... 2
Data Mart ........................................................................................................................................ 2
Data Cube ........................................................................................................................................ 2
Pivot table ....................................................................................................................................... 2
Data Mining..................................................................................................................................... 2
1.2.
2.

History of Business Intelligence .............................................................................................. 3

Background ..................................................................................................................................... 4
2.1.

Business Intelligence Architecture .......................................................................................... 4

2.1.1. Data Source Tier .................................................................................................................... 4


2.1.2. Enterprise Data Warehouse Tier........................................................................................... 5
2.1.3. BI Analytics Tier ..................................................................................................................... 5
2.2.

3.

Explanation of BI tools ............................................................................................................ 6

2.2.1.

Microsoft Business Intelligence ...................................................................................... 6

2.2.2.

IBM COGNOS 10 .............................................................................................................. 6

2.2.3.

Oracle Hyperion Solutions Corporative .......................................................................... 6

2.2.4.

MicroStrategy.................................................................................................................. 6

2.3.

Uses of BI................................................................................................................................. 6

2.4.

Benefits of BI ........................................................................................................................... 7

2.5.

Drawbacks of BI....................................................................................................................... 7

Analysis ........................................................................................................................................... 8
3.1.

Analysis of RIEMSER Pharma GmbH ....................................................................................... 8

3.2.

Analysis of Twiddy & Company ............................................................................................. 10

3.3.

Comparison of 2011 and 2012 BI Market Share ................................................................... 12

3.4.

Benefits of BI ......................................................................................................................... 12

3.4.1.

Allows for better and faster fact-based decisions ........................................................ 12

3.4.2.

Centralizes data............................................................................................................. 12

3.4.3.

Provides insight into customer behavior ...................................................................... 12

3.4.4.

Shows where a business has been, where it is now and where it is going ................... 13

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3.4.5.
3.5.

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Improves data security.................................................................................................. 13

Drawbacks of BI..................................................................................................................... 13

3.5.1.

Vast data warehouse requirements.............................................................................. 13

3.5.2.

Cost ............................................................................................................................... 13

3.5.3.

Complexity .................................................................................................................... 13

3.5.4.

Time consuming implementation ................................................................................. 13

3.6.
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Comparison of Star Vs Snowflake schemas .......................................................................... 14

Conclusion ..................................................................................................................................... 15
4.1. Performance Management ........................................................................................................ 15
4.2. Future of BI ................................................................................................................................ 16
4.2.1. Mobile BI ............................................................................................................................. 16
4.2.2. Cloud BI ............................................................................................................................... 16
4.2.3. Collaborative BI ................................................................................................................... 16
4.2.4. Self service BI ...................................................................................................................... 16
4.2.5. Embedded BI ....................................................................................................................... 16

5.

Works Cited ................................................................................................................................... 17

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1. Introduction
Just as human society and civilization have evolved, business has also evolved over
time. In todays fast-moving and globalised world, businesses have benefited from
the advancement of Business intelligence. Business Intelligence (BI) gives
organizations a more structured way to look at data and helps them make better
business decisions and improve performance. According to surveys, if a decision is
made relying on data rather than pure intuition, the chances of success are 79%
higher (Tiwari, 2013).
Business intelligence (BI) is an umbrella term that refers to a set of theories,
methodologies, processes, architectures, and technologies for gathering, storing,
and transforming raw data into meaningful and useful information and for analyzing,
and providing access to data. Some of the objectives of BI technologies are as
follows:
a. Understanding of a firms internal and external strengths and weaknesses,
b. Understanding of the relationship between different data for better decision
making,
c. Detection of opportunities for innovation
d. Cost reduction
e. Optimal deployment of resources
f. Performance management. (Chow, 2012)
Business Intelligence (BI) offers decision support tools that monitor and analyze
business transaction processes in order to help organizations meet their business
goals. These goals may be operational goals that affect daily business operations,
tactical goals that involve short-term programs such as marketing campaigns, or
strategic goals that entail long-term objectives like increasing revenues and reducing
costs. (Gartner, 2013).
Some of the most common business intelligence tools in use today are:
a. Oracle Hyperion Solutions Corporation
b. Oracle Business Intelligence Suite Enterprise Edition
c. Microsoft Business Intelligence
d. IBM Cognos 10
e. MicroStrategy

1.1.

Basic Definitions

Data Warehouse
According to Bill Inmon A data warehouse is a subject-oriented, integrated, timevariant and non-volatile collection of data in support of managements decision
making process.
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OLTP (Online Transaction Processing)


Online Transaction Processing (OLTP) is a class of systems that supports or
facilitates applications with a high number of transactions and ensures data
consistency.
OLAP (Online Analytical Processing)
Online Analytical Processing is a category of software technology that transforms
raw data into a variety of views of information which can be accessed in a fast,
consistent and interactive manner. It aims at fast, efficient multidimensional
processing of large data volumes.
Data Mart
A data warehouse is divided into data marts. Each data mart contains information on
a single department within an organization and is designed to serve a particular
community of knowledge workers.
Data Cube
A data cube is a multidimensional extension of two-dimensional tables.
Pivot table
A pivot table is a data processing tool used to query, organize and summarize data
or information between spreadsheets, tables or business intelligence software.
Data Mining
The process of analyzing data from different perspectives and summarizing it into
useful information, which is then used to increase revenue, cut costs, or both.

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History of Business Intelligence

The history of business is in many ways the history of human society and civilization.
The term Business Intelligence was first used in 1958 by IBM researcher Hans
Peter Luhn. The chart below lists several early BI systems, but BI usage didnt
become widespread until the late 90s when computer technologies had become very
advanced.

(Harris, 2012)

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2. Background
Business Intelligence technologies handle large amounts of information and provide
historical, current and predictive views of business operations. Making use of new
opportunities and implementing an effective strategy can provide a competitive
market advantage and long-term stability.

2.1.

Business Intelligence Architecture

Business Intelligence architecture can be defined as a framework that provides


standards, best practices and policies that help in analyzing business data. It
provides a set of computer-based techniques that help companies make better
decisions.
Business Intelligence architecture typically includes three tiers:
2.1.1. Data sources
2.1.2. Enterprise Data warehouse
2.1.3. BI Analytics

(Chris, 2011)
2.1.1. Data Source Tier
Raw data can be acquired from two types of sources: internal and external and may
include structured, unstructured and semi-structured data. Internal data is captured
and maintained by operational systems inside an organization, such as sales,
accounting, purchasing, etc. External data originates outside an organization, such
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as from business partners, syndicate data suppliers, the internet, governments, and
market research organizations.
2.1.2. Enterprise Data Warehouse Tier
This layer focuses on the following four main processes:
2.1.2.1. ETL (Extract-Transform-Load)
ETL focuses on extraction, transformation and loading of data. Extraction is the
process of identifying and collecting relevant data from different sources.
Transformation is the process of converting the data using a set of business rules
into consistent formats for reporting and analysis. Data cleansing refers to the
process of identifying and correcting data errors. Once the data have been
transformed and cleansed, they are loaded into the target repository. This phase is
called the loading phase.
2.1.2.2. Operational Data Store (ODS)

ODS is used to integrate all data from the ETL layer and load them into data
warehouses. ODS is a database that stores subject-oriented, detailed, and current
data from multiple sources. Since the data stored in ODS are updated frequently, it is
useful for reporting require real time or near time information.
2.1.2.3. Data Warehouse

Data warehouse is a central storage that collects and stores data from internal and
external sources. Aside from that, data warehouses can be designed to support
OLAP (Online Analytical Processing) applications by storing and maintaining data in
multi-dimensional structures either by choosing snowflake or star schemas.
2.1.2.4. Data mart

A data mart is a subset of the data warehouse that is used to support analytical
needs of a particular business function or department. It contains historical data that
can help users to access and analyze different data trends of a particular
department.
2.1.3. BI Analytics Tier
BI Analytics Tier describes where data are being used and stored, the source of
data, what changes have been made to the data, and how one piece of data relates
to other information. There are many different types of BI analytics tools such as
OLAP, reports, data mining, etc.
The end user layer consists of tools (such as query and reporting tools, data
visualization tools and analytical application, etc.) that display information in different
formats for different users.
(Lih Ong, 2011)

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Explanation of BI tools

2.2.1. Microsoft Business Intelligence


Microsoft Business Intelligence solution offers complete and integrated software
which supports streamlined decision making, predictive analytics and data mining,
data integration and data warehousing, reporting, collaboration, dashboards and
scorecards and managed self service business intelligence.
2.2.2. IBM COGNOS 10
IBM COGNOS 10 is a business intelligence and performance management solution
which expands traditional business intelligence (BI) with planning, scenario
modeling, real-time monitoring, collaboration and business analytics as well as
delivers the complete range of BI capabilities.
2.2.3. Oracle Hyperion Solutions Corporative
Oracle Hyperion system is a business performance management (BPM) system
integrating a modular suite of financial management applications with
comprehensive business intelligence (BI) capabilities for reporting and analysis.
2.2.4. MicroStrategy
MicroStrategys Business Intelligence allows reporting and analysis of data stored
either in a relational database, multidimensional database, or a flat file. It includes
the extra features like mobile capabilities for iPhone and iPad and faster
performance with in-memory BI acceleration technology.
(Jain, 2011)

2.3.

Uses of BI

Faced with mounting pressure to enter new channels, changing consumer demands,
and continuing globalization, companies need information management solutions
that allow them to operate more efficiently, increase revenue and maximize the value
of information.
The following application areas use BI:
Retail (Sales) campaign management
Analytical CRM (Customer Relationship Management)
Inventory analysis (Manufacturing)
Distribution analysis (Manufacturing)
National security & crime analysis (Government)
Health & fraud detection (Government)
Call-behavior analysis (Telecom)
Finance (credit risk, liability management, value chain analysis)
These application areas use business intelligence software to report on, analyze,
and monitor the vast amounts of data using business intelligence architecture in
order to help companies reduce costs, increase revenue, and maximize the value of
information.
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Benefits of BI

Although a business intelligence system is complex, costly and time-consuming to


establish, when implemented and used correctly, its benefits can be significant.
Some of the more significant benefits of BI are as follows:
1. Allows for better and faster fact-based decisions
2. Centralizes data
3. Provides insight into customer behavior
4. Shows where your business has been, where it is now and where it is
going
5. Improves data security
(Schiff, 2010)

2.5.

Drawbacks of BI

Although the benefits of implementing business intelligence for a company are


numerous and significant, there might be some drawbacks when implementing it.
Some of the drawbacks of BI are as follows:
1. Vast data warehouse requirements
2. Cost
3. Complexity
4. Time consuming during implementation

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3. Analysis
Business Intelligence (BI) is an analytical system that derives insight from the wealth
of data available and delivers information thats conclusive, fact-based and
actionable. Following is an analysis on two different companies:

3.1.

Analysis of RIEMSER Pharma GmbH

RIEMSER Pharma GmbH is an international pharmaceutical company


headquartered in Greifswald (Germany). Although RIEMSER was a profitable
company, before using BI, its process for collating and analyzing business data was
highly complex and costly.
Some of the challenges were as follows:
1. All of the information related to sales, products and customers was spread across
separate systems including an ERP system, an accounting system and local
databases.
2. As the company expanded globally the volume of data grew and presented
difficulties in analytics, reporting, budgeting and planning.
3. The data for the annual statutory financial reports took several weeks to prepare.
Therefore, developing improved information management capabilities became a top
priority for the company. As a result, at the end of 2011, RIEMSER management
decided to deploy a business intelligence solution and selected IBM Cognos Express
software. According to Michael Christoph Foyer, head of the RIEMSER Business
Intelligence Competency Center, after successfully migrating its financial reporting
processes to Cognos Express, the company experienced the following benefits:
1. The data for the annual statutory financial reports is now available in one day,
rather than several weeks.

(IBM, 2013)
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2. Management can now drill down through nationwide products sales to see
information such as sales figures for certain regions or vendors with just a few
mouse-clicks.
3. New insights provided by IBM Cognos Express help the company to identify
opportunities to improve their time to market.
4. Cognos Express also makes it possible to perform ad hoc queries and
analyses in real time, providing deeper insights for business users. Therefore,
marketing and sales employees can crate and test their own hypotheses.
5. Self-service capabilities allow employees to create product management
reports themselves, without requiring the support of the IT department.
The solution provides a rapid overview of the market and our corporate
performance. In short, decision-makers have gained greater visibility than ever
before, says Foyer. The IBM solution has helped significantly reduce the amount of
time and labor involved in collecting and analyzing RIEMSERs operational data.
(IBM, 2013)

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Analysis of Twiddy & Company

Twiddy & Company rents vacations homes to families who visit the Outer Banks of
North Carolina in the summer. Twiddy & Co. has used Google Analytics for a long
time as their web analytics solution, and has always been impressed with its
capabilities.
Google Analytics is a service that generates detailed statistics about a websites
traffic and traffic sources and measure conversions and sales.
After implementing Google Analytics, in the slowest booking period of the season
and also during the slowest demand period of the year their revenue increased by
18.6%.

Not only did revenue increase, but the average order value also increased by 11.9%.

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With the increase in average order value, the conversion rate also increased by
7.9%.

(Google, 2013)
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Comparison of 2011 and 2012 BI Market Share

Worldwide business intelligence (BI) software revenue totalled $13.1 billion in 2012,
a 6.8 percent increase from 2011 revenue of $12.3 billion, according to Gartner, Inc.
BI software revenue will reach $13.8 billion in 2013, and a 7 percent increase from
2012.The market is forecast to reach $17.1 billion by 2016.
The chart below compares the 2011 and 2012 market share of main BI vendors.

(Gartner, 2013)

3.4.

Benefits of BI

3.4.1. Allows for better and faster fact-based decisions


For too often, companies must base their decisions about how to steer their
companies into the future on guess work. BI systems provide decision makers with
rich, exact and up-to-date information and let users dive into data for further
investigation.
3.4.2. Centralizes data
BI centralizes data so that it is accessible to a variety of departments and end users.
This is particularly useful for enterprises with multiple departments that require a
comprehensive overview of processes between departments and the entire
enterprise.
3.4.3. Provides insight into customer behavior
Business intelligence enables firms to gather information on the trends in the
marketplace and come up with innovative products or services in anticipation of
customers changing demands. BI helps a company identify its most profitable
customers, as well as potentially profitable customers, and helps it assess the
reasons for customer dissatisfaction before it begins to cost those sales.

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3.4.4. Shows where a business has been, where it is now and where it is going
Business intelligence is very successful at explaining what has happened in a
business over a defined period of time. Business Intelligence can help a company
compare its strengths and weaknesses against its competitors; identify trends and
market conditions and respond quickly to change. It provides a more complete view
of customer buying habits and behavior, which helps executives plan for the future.
3.4.5. Improves data security
Using BI systems, data is accessed through a single password protected portal. This
improves the data security. Data access can be restricted by segmenting users
according to predefined groups.

3.5.

Drawbacks of BI

3.5.1. Vast data warehouse requirements


Business intelligence system stockpile vast amounts of past data about a firm, which
takes up a great deal of data warehouse space. However, this information
represents only a small portion of what the firms actually require to function.
3.5.2. Cost
Business intelligence can sometimes be a little too expensive for small as well as for
medium sized enterprises. The use of such a complex, costly system is not
necessary for basic business transactions.
3.5.3. Complexity
BI can be so intricate that it can make business techniques rigid to deal with. BI
systems can be so complex that they slow down business processes.
3.5.4. Time consuming implementation
Many firms in todays fast paced industrial scenario are not patient enough to wait for
the execution of Business intelligence in their organization. It takes around 4 days to
2 weeks for data warehousing system to completely implement in a medium-sized
company. (AberdeenGroup, 2006)

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Comparison of Star Vs Snowflake schemas

The comparison between star and Snowflake schemas are as follows:

(Verma, 2006)

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4. Conclusion
For companies to remain competitive in todays world requires analytically oriented
systems that can revolutionize a companys ability to rediscover and utilize
information they already own. Companies are able to gather more data about their
customers, products, sales channels, operations and suppliers than they can
effectively analyze. Also by having a good BI architecture, companies will be able to
maximize the value from their BI investments, and thereby meet their business
requirements and improve business performance.
As more and more companies adopt BI, it will be imperative for any company that
wants to stay competitive to adopt BI also.
In conclusion, with the help of BI, companies can make well-grounded decisions
based on real time data. Decisions that have a clear purpose and are backed by
strong analysis typically gain stronger organizational support.

4.1. Performance Management


Performance Management uses the data prepared by the BI systems to develop
effective business strategies and improve enterprise performance. Successful
performance management informs business managers about the companys position
and enables managers to identify problems and produce more accurate and reliable
forecasts.
Although BI and PM are inseparable, they are two different systems. BI takes raw
data that must first be integrated from disparate source systems and then
transformed into information; and PM leverages that information. (Cokins, 2006)
Performance Management starts top-down, translating strategy in key measures
before worrying about data collection. Business Intelligence, on the other hand,
starts bottom up with the available data in business applications and databases and
turns this into meaningful management information.
Another difference is that PM is hardly ever ad-hoc, nor real-time. PM is a strategic
management tool and provides direction to a company.
BI on the other hand is often ad-hoc and real-time. Reports are used to figure out the
answers to questions such as: what exactly went wrong? what happened? what do
we need to do next? (Poel, 2010)

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4.2. Future of BI
In this rapidly changing world, business leaders demand real-time BI that is always
accessible from anywhere at any time using any device. They want the right
information placed into the right hands precisely when it is needed.
Some of the BI trends that might have a major impact on the BI landscape are listed
below:
4.2.1. Mobile BI
In the future, BI will not be limited by device or location, it will be cross-platform,
offering instant access from all smart phones and tablets. Mobile BI will allow remote
users to gain access to information wherever they are and make decisions
immediately.
4.2.2. Cloud BI
The cloud is the future, although current adoption is slow. BI on the cloud promises
near 100% uptime and scalability without the time and money required to maintain
in-house hardware (Stangarone, 2013). Some organizations will adopt the Softwareas-a-Service model simply using the providers BI applications running in the cloud.
Other organizations will adopt the Platform-as-a-Service model leveraging the
providers platform to build their own BI applications.
4.2.3. Collaborative BI
Collaboration options will quickly become default features of BI applications as the
internet is the perfect collaboration platform. Collaborative BI allows users to find,
discuss, and rank the data, reports, and analyses that they find the most useful.
4.2.4. Self service BI
Tired on depending on IT for BI and reporting, end users are now bypassing the IT
department altogether to get what they want. To stop users from using outside
services, IT departments will have no choice but to deliver self-service BI options
that let users create the BI applications they require.
4.2.5. Embedded BI
While traditional BI is typically a standalone product, embedded BI integrates
analytics and reporting capabilities directly into users everyday business
applications. Essentially, embedded BI brings BI to the end users, working it into
their daily routine.
Therefore, in the future, the capabilities of BI will increase hand in hand with
consumer expectations.
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5. Works Cited
AberdeenGroup, 2006. The Warehouse Management Benchmark Report, 260 Franklin Street,
Boston, USA: Aberdeen Group, Inc.
Chow, K., 2012. TechRepublic. [Online]
Available at: http://www.techrepublic.com/blog/10-things/10-reasons-to-use-embeddable-bisolutions/
[Accessed 26 September 2013].
Chris, 2011. Dynacron Group. [Online]
Available at: http://www.dynacrongroup.com/blog/2011/04/bi-dw-architecture-fundamentals
[Accessed 4 October 2013].
Cokins, G., 2006. Information management. [Online]
Available at: http://www.information-management.com/news/1051320-1.html
[Accessed 20 October 2013].
Gartner, 2013. Gartner. [Online]
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[Accessed 27 September 2013].
Gartner, 2013. Gartner. [Online]
Available at: http://www.gartner.com/newsroom/id/2507915
[Accessed 10 October 2013].
Google, 2013. Google Analytics. [Online]
Available at:
http://static.googleusercontent.com/external_content/untrusted_dlcp/www.google.com/en//analy
tics/customers/pdfs/twiddy.pdf
[Accessed 9 October 2013].
Harris, C., 2012. Business Computing World. [Online]
Available at: http://www.businesscomputingworld.co.uk/the-history-of-business-intelligenceinfographic/
[Accessed 3 October 2013].
IBM, 2013. IBM. [Online]
Available at: http://www-01.ibm.com/software/success/cssdb.nsf/CS/STRD99XEXN?OpenDocument&Site=default&cty=en_us
[Accessed 8 October 2013].
Jain, S., 2011. Tools Journal. [Online]
Available at: http://www.toolsjournal.com/articles/item/186-top-10-business-intelligence-andanalytics-tools
[Accessed 6 October 2013].

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Poel, K. V. D., 2010. KPILibrary. [Online]


Available at: http://kpilibrary.com/topics/business-intelligence-or-performance-management
[Accessed 20 October 2013].
Schiff, J., 2010. Enterprise apps today. [Online]
Available at: http://www.enterpriseappstoday.com/business-intelligence/ten-benefits-of-businessintelligence-software-1.html
[Accessed 7 October 2013].
Stangarone, J., 2013. mrc productivity. [Online]
Available at: http://www.mrc-productivity.com/blog/2012/06/6-big-business-intelligence-trends-ofthe-near-future/
[Accessed 21 October 2013].
Tiwari, N., 2013. Your Story. [Online]
Available at: http://yourstory.in/2013/04/business-intelligence-helping-data-driven-decisionmaking-2/
[Accessed 25 September 2013].
Verma, R., 2006. GeekInterview. [Online]
Available at: http://www.geekinterview.com/question_details/38599
[Accessed 10 October 2013].
Lih Ong, P. H. S. a. S. F. W., 2011. A Five-Layered Business Intelligence Architecture. Communications
of the IBIMA, Volume I, p. 11.

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