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Chapter
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of employees across the world on using a particular set of tools, it is extremely
difficult to switch. When you adopt these systems, you are in essence taking in
a new partner.
The marketplace is very competitive and given to hyperbole. One BI
vendor claims “[Our tools] bring together a portfolio of services, software,
hardware and partner technologies to create business intelligence solutions.
By connecting intelligence across your company, you gain a competitive
advantage for creating new business opportunities.” As a manager, you will
have to critically evaluate such claims, understand exactly how these systems
could improve your business, and determine whether the expenditures are
worth the benefits.

12.3 BUSINESS INTELLIGENCE CONSTITUENCIES

There are many different constituencies that make up a modern business
firm. Earlier in this text and in this chapter we identified three levels of
management: lower supervisory (operational) management, middle manage-
ment, and senior management (vice president and above, including executive
or “C level” management, e.g. chief executive officer, chief financial officers,
and chief operational officer.) Each of these management groups has different
responsibilities and different needs for information and business intelligence,
with decisions becoming less structured among higher levels of management
(review Figure 12.1).

DECISION SUPPORT FOR OPERATIONAL AND MIDDLE
MANAGEMENT

Operational and middle management are generally charged with monitoring
the performance of key aspects of the business, ranging from the down-time of
machines on a factory floor, to the daily or even hourly sales at franchise food
stores, to the daily traffic at a company’s Web site. Most of the decisions they
make are fairly structured. Management information systems (MIS) are typically
used by middle managers to support this type of decision making, and their
primary output is a set of routine production reports based on data extracted and
summarized from the firm’s underlying transaction processing systems (TPS).
Increasingly, middle managers receive these reports online on the company
portal, and are able to interactively query the data to find out why events are
happening. To save even more analysis time, managers turn to exception reports,
which highlight only exceptional conditions, such as when the sales quotas for
a specific territory fall below an anticipated level or employees have exceeded
their spending limits in a dental care plan. Table 12.6 provides some examples
of MIS applications.

Support for Semistructured Decisions
Some managers are “super users” and keen business analysts who want to
create their own reports, and use more sophisticated analytics and models to
find patterns in data, to model alternative business scenarios, or to test specific
hypotheses. Decision-support systems (DSS) are the BI delivery platform for
this category of users, with the ability to support semistructured decision
making.

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