Business Intelligence in Strategic Planning and Decision-making Processes

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An individual report on the role and importance of business intelligence in an organisation in their strategic planning and decision-making processes

Executive summary

  1. This report is to understand what Business Intelligence is and how it enables in decision making process in a business environment
  2. To Identify key success and critical factors for implementing business Intelligence projects.
  3. A case study of how Continental airlines of the United States of America as a business organisation was able to gain competitive advantage using business Intelligence.

Introduction

Business intelligence combines architectures, databases, analytical tools, applications and methodologies, It’s major objective is to enable interactive access in real time to data to enable the manipulation of data and give business analysts and managers the ability to conduct appropriate analyses (Sharda, 2014)

It can also be defined as a set of technology and processes that will allow people in different levels within a business organisation to access and analyse data (Howson, 2013)

It’s a system that combines data gathering, knowledge management and data storage with analytical tools to ultimately present competitive and complex information to planners and decision makers in a business organisation or companies, so in essence it simply means that when business intelligence is used in companies or business organisations it provides actionable information that is delivered at the right time, in the right location and in the right form which hence will assist in decision making (Negash, 2004, p. 178)

Business intelligence (BI) is also a technologically driven process that is used for analysing data and presenting the information in a way that is actionable to help executives, managers and corporate end users to make informed business decisions. (Target, 2010-2018).

It covers a wide range of applications and methodologies that will help organisations to collect data from both their external sources and internal system, to then prepare it for analysis, run queries against the data to create  dashboard, reports, data visualisation and then make the analytical results available to the business organisations decision makers. (Target, 2010-2018)

Business Intelligence also assists in strategic decision making in areas such as optimising customer relationship, corporate performance management, traditional decision support and monitoring of business activities (Aghaei, 2013)

It aids in decision making by using data warehouses to store detailed summary and metadata which are a collection of subject oriented, integrated, historical non volatile data that support a business organisation’s decision making ( Olszak & Ziemba, 2006)

(Langseth & Vivatrat, 2003) says in the business enterprise article that the essential components of business Intelligence that is proactive are data mining, real time data warehousing, automatic lining and refinement, data visualisation, seamless follow through workflow and geographic information systems.

Data mining can be used to estimate what future behaviour would be like and this is of predictive analytics and this can then be taken to create specific recommendations for operators (Sharda, 2014)

Public and private business organisations are very much aware of the business environment and the pressures associated with it and so uses different means to

counter the pressure and one of such means is by using business intelligence (Sharda, et al., 2014)

For example, Vodafone New Zealand had to use business intelligence to support their executives in improving communication to retain their existing customers thereby increasing revenue (Sharda, et al., 2014)

The effect of assisted communication through computer technology (Business Intelligence) or computer assisted communication technology such as electronic mail, videoconferencing and teleconferencing in decision making within a business organisation will greatly reduce the effort individuals in an organisation that are separated by physical proximity to exchange information hence leading to a larger number and variety of people participating as information sources in decision making (Huber, 1990)

 

Fig1     Evolution of Business Intelligence

Querying and reporting

ETL

 

DSS

Data Warehousing

Metadata

EIS/ESS

Data Marts

Financial reporting

Spreadsheets (Ms Excel)

Business Intelligence

OLAP

Digital cockpit and dashboard

 

 

Scorecards and dashboard

 

Workflow

Alerts and Notifications

Data & text Mining

Portais

Predictive analytics

Broadcasting tools

 

Source (Sharda, 2014)

KEY SUCCESS FACTOR FOR IMPLEMENTING BUSINESS INTELLIGENCE PROJECTS

There are several key success factors that plays a role during implementing business intelligence projects and it’s not only technology, these are management style, processes, people and the culture of the organisation (Pour, 2006)

For companies and business organisation to implement business Intelligence they need to take an inventory of the source data across systems to enable them to figure out how to analyse it since data has to be processed quickly and frequently in real time (Turban, 2013)

The critical success factors for implementing a business intelligence project are having a  (i) If the business organisation has a clear vision and planning in place (ii) If the organisation has a business driven methodology and project management (iii) If there is a committed management sponsorship  and support (iv)  Data management and quality issues (v) Mapping the solutions to the user requirements (vi)Performance considerations of the BI system (vii) Robust and extensible framework (Turban, 2013)

(Hawking & Sellitto, 2010)  from the school of management and information system Victoria university in  Australia noted in their article write up that John F Rockart in 1979 who was then a director for information system research at Massachusetts through interviews with some chief executives, developed the concept of critical success factors and argued that ,Critical success factors for a business organisation are those limited number of areas where results if they are satisfactory will then ensure a successful competitive performance for that business organisation, which essentially means there are few key areas where things has to go right for the business to flourish and if the results in those areas are not adequate that business organisation’s efforts for the period will be less than what is desired.

Fig 2     The Newly established model of key success factors of Business Intelligence Implementation

Vision Strategy

Plans, goals

Integration of BI Strategy

Open corporate culture

Quality of source data

KEY SUCCESS FACTORS OF BUSINESS INELLIGENCE

Continuous support

Business Intelligence Project range

Right team of Business Intelligence workers

Top Management support

Project sponsor

Segmentation User

Source (Skanta, 2010)

CASE STUDY OF CONTINENTAL AIRLINE AND HOW THEY GAINED COMPETITIVE ADVANTAGE USING BUSINESS INTELLIGENCE

Continental airline is an airline that was founded in 1934 in the American south west and was one of the top 5 airlines in the United States of America, which grew and weathered the storms of the highly volatile competitive airline industries (Wixom & Watson, 2010)

In 1990, the airline was in financial trouble due to poor services such as mishandling baggage, customer complaints not attended to on time, denying boarding because of overbooking and ultimately filed for bankruptcy and had gone through ten CEOs in ten years. (Wixom & Watson, 2010)

When in 1994 Gordon Bethune took over the controls he made use of real time business intelligence to gain competitive advantage among the other airlines, realising that real time business intelligence is critical to the accomplishment of a business strategy in creating significant business benefits. (Wixom & Watson, 2010)

Gordon Bethune with another consultant Greg Brenneman, came up with a Go forward plan which has four interrelated parts which was supported by real time business intelligence and data warehousing and has moved the airline from first to favourite or worst to first and the plans are highlighted below (Wixom & Watson, 2010)

Fly to win: -which simply means there’s a need to understand better what products their customers wanted and are willing to pay for i.e. value added customers

Fund the future: -the airline needed to change its costs and cash flow to be able to continue to operate i.e. a good financial management

Make reliability a reality: – they should be an airline that got their customers to their destinations on time, safely, with their luggage’s too i.e. reliable operations

Working together: -a work place culture needed to be created where people would want to come to work i.e. collaborative work culture.

Continental airline’s key strategy to gain competitive advantage was to invest in an enterprise data warehouse as a platform to deliver essential and important information about their customers and the business to their employees at all levels within their organisation (Wixom & Watson, 2010)

Firstly, they used real time data to optimise airfares and once there’s a change in price, the revenue management starts tracking the impact of the price on booking and once they know how the fare is selling it allows them to adjust how many seats should be sold at a given price. (Lehman & et al, 2004)

Secondly, they created an innovative Customer Relationship Management (CRM) application that leverage warehouse real time capabilities, for their customers every month the value analysis are  performed by using data in the data warehouse and this will be  fed back to the airline’s customer database so that employees knows who their best customers are (Lehman & et al, 2004)

Thirdly, they got a flight management dashboard which is a set of interactive graphical display developed by the data warehouse group, which assists the operations staff to quickly identify issues in their flight network and be able to manage flights that will ultimately lead to improving their customer’s satisfaction and the airline’s profitability. (Lehman & et al, 2004)

Fourthly they developed a service oriented culture to employees and their customers which resulted in value creation by ensuring that employees believe that people should be treated with dignity and respect and all this combination of real time technology, service oriented culture, business strategies led to a turnaround in the company success and competitive advantage (Lehman & et al, 2004)

Recommendation and conclusion

In any company or business organisation competitive advantage is difficult to sustain due to rapid technology development, consumers, clients and customer change in taste and the globalised market and since there is a growing need for business intelligence within organisations for better business decisions and improved customer service satisfaction, then their information technology departments should begin to use business intelligence to manage IT and deliver useful information to their end user

References

  • Olszak , C. M. & Ziemba, E., 2006. Interdisciplinary journal of information, Volume 1.
  • Aghaei, M., 2013. Analysis of business information on decision making. [Online]
    Available at: www.researcgate.net
    [Accessed 23 October 2018].
  • Hawking, P. & Sellitto, C., 2010. Business Intelligence critical success factors, Australasian: AIS electronic library.
  • Howson, C., 2013. Successful Business Intelligence unlock the value of BI and Big data, New York: Mc Graw Hill.
  • Huber, G. P., 1990. A theory of the effects of advanced Information Technologies on Organisational Intelligence design and decision making. The Academy of Management Review, 15(1), pp. 47-71.
  • Langseth, J. & Vivatrat, N., 2003. Why proactive business is a hallmark of the real time enterprise. Intelligence Enterprise, 18(5), pp. 34-41.
  • Lehman, A. R. & et al, 2004. Continental airlines flies high with real time business intelligence. MIS quarterly executive, 3(4), pp. 164-167.
  • Negash, S., 2004. Business Intelligence. Communication for the association of Information systems, 13(1), p. 178.
  • Pour, J., 2006. What to expect from business intelligence. Journal of system inegration, 3(1), pp. 47-58.
  • Sharda, R., 2014. Business Intelligence and analytics system for decision support, Boston: Pearson.
  • Sharda, R., Delen, D. & Turban, E., 2014. Business Intelligence and Analytics, s.l.: Pearson.
  • Skanta, J., 2010. Journal of IT system, 11(6), pp. 30-31.
  • Target, T., 2010-2018. Tech Target. [Online]
    Available at: https://searchbusinessanalytics.techtarget.com/definition/business-intelligence-BI
    [Accessed 11 October 2018].
  • Turban, E., 2013. Business Intelligence a managerial approach, Harlow Essex: Pearson Education.
  • Wixom, B. & Watson, H., 2010. The Business Intelligence based organisation. International journal of business intelligence research, 1(1), pp. 13-28.

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