Intelligence in business. fundamental concepts
The business world is based on strategic decision-making, which makes the difference between a successful company and another that does not achieve it, is the correct and timely decision-making. To be able to carry out this in the best way, it is essential to have adequate and timely information that supports all the management of the company’s operations in an agile and fast way.
It is important to be cautious with the information that is generated since it is just as important to have information as to know how to handle and interpret it, for this there are very useful tools such as business intelligence, also called Business Intelligence.
At this point, information technologies play a very relevant role by allowing the collection, storage and processing of data generated by the operation of the company. This facilitates access to information and reduces the margin of error that could exist when making the same capture on several occasions.
HISTORY OF INTELLIGENCE IN BUSINESS
In a 1958 article, IBM researcher Hans Peter Luhn uses the term Business Intelligence. Intelligence is defined as: “The ability to understand the interrelationships of the facts presented in such a way that it manages to direct the action towards a desired goal.”
Business intelligence has evolved from decision support systems that began in the 1960s and developed throughout the mid-1980s. DSS (Decision Support System) originated from computer models , created to aid in decision making and planning. Since DSS, data warehouses, executive information systems, OLAP, and business intelligence came into focus at the beginning in the late 1980s.
In 1989, Howard Dresner (later a Gartner Group analyst) proposed “business intelligence” as a general term to describe “the concepts and methods for improving business decision-making through the use of supporting fact-based systems. However, this expression did not become popular until the late 1990s.
GENERAL CONCEPTS OF BUSINESS INTELLIGENCE
Business Intelligence is the ability to transform data into information, and information into knowledge, so that the decision-making process in business can be optimized.
Business intelligence or business intelligence, also known as business intelligence, is the set of processes, applications and technologies that facilitate the quick and easy obtaining of data from business management systems for analysis and interpretation, so that they can be used for decision making and become knowledge for those responsible for the business.
From a clearer point of view, and associating it directly with information technologies, we can define Business Intelligence as the set of methodologies, applications and technologies that allow gathering, purifying and transforming data from transactional systems and unstructured information (internal and external to the company) in structured information, for its direct exploitation (reporting, OLTP / OLAP analysis, alerts …) or for its analysis and conversion into knowledge, thus supporting business decision-making.
Business intelligence acts as a strategic factor for a company or organization, generating a potential competitive advantage, which is none other than providing privileged information to respond to business problems: entering new markets, promotions or product offers, elimination of islands of information, financial control, cost optimization, production planning, analysis of customer profiles, profitability of a specific product, etc.
This set of tools and methodologies have the following characteristics in common:
- Information accessibility. Data is the main source of this concept. The first thing that these types of tools and techniques must guarantee will be user access to data regardless of their origin.
- Support in decision making. It seeks to go further in the presentation of information, so that users have access to analysis tools that allow them to select and manipulate only those data that interest them.
- Orientation to the end user. Independence is sought between the technical knowledge of the users and their ability to use these tools. A complete BI solution allows:
* Observe what is happening?
* Understand why it happens?
* Predict what would happen?
* Collaborate what should the team do?
* Decide which path to follow?
MAIN BUSINESS INTELLIGENCE PRODUCTS
The main Business Intelligence products that exist today are:
Balanced Scorecards (CMI)
The Balanced Scorecard (BSC), also known as the Balanced Scorecard (BSC) or dashboard, is a business control tool that allows you to establish and monitor the objectives of a company and its different areas or units.
It can also be considered as an application that helps a company express the objectives and initiatives necessary to fulfill its strategy, continuously showing when the company and employees achieve the results defined in its strategic plan.
Decision Support Systems (DSS)
At first, data analysis may appear to be a straightforward process, easily accomplished through a custom-built application or sophisticated ERP. However, this is not the case: these applications usually have a series of predefined reports in which they present the information in a static way, but they do not allow us to delve into the data, navigate between them, or handle them from different perspectives.
The DSS is one of the most emblematic tools of Business Intelligence since, among other properties, it allows to solve a large part of the limitations of management programs.
Executive Information Systems (EIS)
An Executive Information System or Executive Information System is a software tool, based on a DSS, that provides managers with easy access to internal and external information about their company, and that is relevant to its key success factors.
The main purpose is for the executive to have at his disposal a complete overview of the status of the business indicators that affect him instantly, also maintaining the possibility of analyzing in detail those that are not meeting the established expectations, to determine the business plan. most suitable action.
MAIN COMPONENTS
The main components of data sources in Business Intelligence that exist today are:
Datamart
A Datamart is a departmental database, specialized in storing data for a specific business area. It is characterized by having the optimal data structure to analyze the information in detail from all the perspectives that affect the processes of said department. A datamart can be fed from the data of a data warehouse, or integrate by itself a compendium of different sources of information.
Therefore, to create the datamart of a functional area of the company, it is necessary to find the optimal structure for the analysis of its information, a structure that can be mounted on an OLTP database, such as the datawarehouse itself, or on a database OLAP. The designation of one or the other will depend on the data, requirements and specific characteristics of each department.
Datawarehouse
A Datawarehouse is a corporate database that is characterized by integrating and debugging information from one or more different sources, and then processing it, allowing it to be analyzed from countless perspectives and with high response speeds. The creation of a data warehouse represents in most cases the first step, from a technical point of view, to implement a complete and reliable Business Intelligence solution.
The main advantage of this type of database lies in the structures in which the information is stored (star table models, snowflakes, relational cubes … etc). This type of information persistence is homogeneous and reliable, and allows consultation and hierarchical treatment of it (always in an environment different from the operational systems).
TOP TRENDS IN BUSINESS INTELLIGENCE
The business intelligence trends for 2019 are several, but among them the following stand out:
The rise of explainable AI. The promise of artificial intelligence (AI) suggests that machines will increase human understanding by automating decision-making. Josh Parenteau, director of market intelligence at Tableau, explained how artificial intelligence and machine learning will act as a new perspective, “helping to uncover ideas that have yet to be discovered.” Gartner research indicates that by 2020, “85% of CIOs will pilot artificial intelligence programs through a combination of purchasing, development and outsourcing efforts.” But as organizations become more reliant on machine learning models.
Natural language humanizes your data. Natural Language Processing (NLP) brings together computer science and linguistics to help teams understand the meaning behind human language. Today’s BI vendors offer a natural language interface for visualizations, so that users can interact with their data naturally, asking questions on the fly without requiring in-depth knowledge of the BI tool.
Natural language is being applied to support analytical conversations. The analytical conversation is defined as a human being having a conversation with the system about their data. The system takes advantage of the context within the conversation to understand the user’s intention behind a query and promote dialogue, creating a more natural conversational experience.
Actionable analytics puts data in context. Data workers want and need data and actions to be in the same place. Rather than conducting analysis in one silo and acting on another, anyone working with data should be able to stay in the context of their business processes and workflows. Business intelligence platforms are meeting this need by merging with core business operations, workflows, and processes through capabilities such as mobile analytics, embedded analytics, dashboard extensions (also known as plugins), and APIs. As a result, actionable analytics are speeding up the decision-making process for both technical and non-technical roles.
These capabilities allow data workers to analyze data and take action after finding information, all in the same place.
Collaborative data amplifies good social impact . Data has transformed the way organizations operate, including non-governmental organizations (NGOs) and nonprofits. And now, the “data for good” movement is boiling in organizations in both the public and private sectors. Gartner research indicates that “social media mentions of data for good have risen 68% in the last year” as the general public becomes more aware of how data can have a positive impact in society.
BUSINESS INTELLIGENCE BENEFITS
Some of the advantages that you can have in your company when using business intelligence are the following:
Increased efficiency: By having the data in an accessible and agile way, you can generate centralized information of value which you can visualize in a single platform to take advantage of it in an optimal way to carry out analysis and make informed and timely decisions.
Quick responses to business situations: In order to make decisions at the right time, it is important to have the information at hand in a simple way and not waste time searching and consolidating data. Thanks to BI you can have the answers in minutes in a clear and concise way through indicator reports and data dashboards.
Control of the functional areas of the company: In all areas of your company valuable information is generated day by day, you can take advantage of it in the best way to know trends, project data, analyze scenarios, etc.
Improve your customer service: By having the most important information and in real time, you can offer your customers a higher quality service from the order to the post-sale service by learning more about them and their needs. Analyze shopping habits, recognize the best-selling products, etc.
Presents information through dashboards for simpler and more direct communication of the company’s situation. By having the possibility of creating different dashboards you can focus on the most relevant data to display without having to review large amounts of information.
The proper use of the tools that business intelligence can make a big difference between a company that achieves growth and one that does not, between excellent or poor customer service, between efficient inventory management and loss of money and resources, between the success or failure of an organization.
BUSINESS INTELLIGENCE APPLICATIONS
Business intelligence can help any company, no matter what size and sector it is dedicated to, to plan, organize, detect changes in sales, income and expenses, identify changes in consumer behavior, detect new opportunities, to know their strengths and weaknesses, to correct mistakes and even to know when they can go on vacation. All of this will help them make the best decisions.
In the article “Business Intelligence Definition and Solutions” its author, Ryan Mulcahy, talks about the use of business intelligence in big American businesses. Give several examples:
- Restaurant chains like Hardee’s, Wendy’s, Ruby Tuesday, and TGI Friday’s use BI to make strategic decisions, such as what new items to add to the menu, what dishes to remove, or which locations to close.
- Wal-Mart uses vast amounts of data and analytics to dominate the industry.
- Harrah’s uses business intelligence to build mega-casinos to analyze customer loyalty.
- Amazon and Yahoo rely on business intelligence to carry out business changes.
- Capital One conducts more than 30,000 experiments annually to identify creditworthy customers and offer them credit cards.
CONCLUSION
With globalization, competition becomes mega competition for which we must react quickly, surprise, anticipation, we must also change the rules of the game and make comprehensive innovative products to demonstrate superiority over the competition.
With all the analyzes mentioned above, another essential element, both for organizations and for individuals, is financial education. Currently obtaining information on Financial Education is much easier and we might even think that it is a topic that is only in fashion or that it is a new trend in education that at some point may disappear, but it is not.
Financial Education accompanies the growth of each individual and generates knowledge and confidence when deciding to use a financial product or service. Keep in mind that the better informed you are, the better your decisions will be and the lower the risk of over-indebtedness.
THANKS
I want to first of all thank my parents, since while I did not have the support of Conacyt, they supported me financially, while I was here in Orizaba.
To Conacyt for the support that they are giving us to my colleagues and to me, so that we can continue studying a postgraduate degree, the institution and postgraduate academic body, without them I would not have prepared adequately to be able to reach the first semester. To Dr. Aguirre of the subject of FIA, for being a professor with a teaching approach very different from that of most of the professors that I have had throughout my student life. To my colleagues, since until now we have been united and we support each other if one does not understand the issues or to deliver any documentation.