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Q9-1 How Do Organizations Use Business Intelligence (BI) Systems?

“You mean this Excel thing is sort of a taste teaser.” 371
“Yeah, but you’ve got to like the taste.”
“Hope it’s better than that five-spice thing.”
“See you later.”
“When do I get my report?”
“Friday?”
“That soon?”
“It’s just a teaser, Nicki.”

Chapter preview

The information systems described in Chapters 7 and 8 generate enormous amounts
of data.The systems in Chapter 7 generate structured data that is used for operational
purposes, such as tracking orders, inventories, payables, and so forth. This data has a
potential windfall: It contains patterns, relationships, and clusters and can be used to
classify, forecast, and predict. Social media data, from systems discussed in Chapter 8,
is unstructured but also provides that same windfall. However, there is so much social
media data that it results in BigData collections, which need specialized processing.
This chapter considers business intelligence (BI) systems: information systems
that can produce patterns, relationships, and other information from organizational
structured and unstructured social data as well as from external, purchased data. In
addition to this data, another rich source of knowledge is employees themselves.
Employees come to the organization with expertise, and as they gain experience in the
organization they add to that expertise. Vast amounts of collective knowledge exist in
every organization’s employees. How can that knowledge be shared?
As a future business professional, business intelligence is a critical skill. According
to a recent survey by PricewaterhouseCoopers, 50 percent of U.S. CEOs see very
high value of digital technology in data analytics (business intelligence). Eighty
percent reported that data mining and analytics were strategically important to
1
their organizations. In 2014, Gartner found that CEOs believe digital marketing (of
which business intelligence is the core) to be the number-one priority for technology
investment. Foundation Capital estimates that marketing technology expenditures will
grow from $12B in 2014 to $120B by 2026. As you will learn, business intelligence is
the key technology supporting such marketing technology. 2
This chapter begins by summarizing the ways organizations use business
intelligence. It then describes the three basic activities in the BI process and illustrates
those activities using a parts selection problem. We then discuss the role of data
warehouses and data marts followed by survey reporting, data mining, BigData,
and knowledge management BI applications. After that, you’ll learn alternatives for
publishing the results of BI applications. We will wrap up the chapter with a 2026
observation that many people find frightening.

Q9-1 How Do Organizations Use Business Intelligence

(BI) Systems?

Business intelligence (BI) systems are information systems that process operational, social,
and other data to identify patterns, relationships, and trends for use by business professionals and
other knowledge workers. These patterns, relationships, trends, and predictions are referred to as