Business Intelligence and The Decision Making Method

Business Intelligence and The Decision Making Method

The Effects of Using Business Intelligence Systems on an Excellence Management and Decision-Making Process by Start-Up Companies: A Case Study 1 Otmane Azeroual, 2 Horst Theel 1 German Center for Higher Education Research and Science Studies (DZHW), Berlin, Germany 2 University of Applied Science HTW Berlin, Department of Computer Science, Communication and Business, Berlin, Germany Abstract: The rapid increase in data volumes in companies has meant that momentous and comprehensive information gathering is barely possible by manual means. Business intelligence solutions can help here. They provide tools with appropriate technologies to assist with the collection, integration, storage, editing, and analysis of existing data. While almost only large companies were interested in this topic a few years ago, it has meanwhile also become necessary for start-up companies, and so the market for business intelligence has been growing for years. This article focuses on the general potentials of using BI in start-ups. First, will be examined which providers of BI solutions that are suitable for start-ups and what opportunities exist for implementing BI systems in start-ups. Then it will be shown to what extent BI has prevailed in start-ups, in which areas the techniques of BI are used in start-ups and what purpose BI has in start-ups. Finally, the success factors for BI projects in start-ups are considered. Keywords: Business Intelligence, BI, BI-Projects, BI-Providers, Market-Analysis, Decision-Making, Start-Ups 1. Introduction With increasing globalization of markets, fierce competition, increasing the speed with changes in market conditions and customer needs, all market participants and companies face new challenges. In the long run, companies will be able to assert themselves, who can adapt to these conditions, who can respond flexibly and quickly to changes while at the same time keeping their costs under control. For this purpose, however, an exact knowledge of the current corporate and market situation is indispensable. To ensure this and to provide management with the information needed in their planning and decision-making, sophisticated information and communication systems are used. Since the 1960s, various approaches have been developed for such systems, which have become known under many different names such as Management Information Systems (MIS), Decision Support Systems (DSS) or Executive Information Systems (EIS). Today, the term Business Intelligence (BI) has become established both in practice and in research. BI describes approaches such as collecting, storing, processing, analyzing and presenting company data. In recent years, Business Intelligence has become one of the top topics in the German and international IT market. In this regard, the importance of companies has increased significantly. By using BI systems, companies are supported in making their business-critical data and processes transparent and intelligent. Also, employees will be able to make better decisions, achieve the required results faster, and continuously develop them. Another advantage of BI systems is that companies can make their customer and supplier relationships even more profitable, reduce costs, minimize risks and increase added value. Without the use of BI systems, enormous amounts of data are available, but then they spread confusion and ultimately complicate business. A few years ago, almost only large companies and corporations showed interest, but now this topic has become increasingly attractive for start-up companies. Because there they discovered what potential could be tapped with 30 International Journal of Management Science and Business Administration, vol. 4, issue 3, pp. 30-40, March 2018 Otmane Azeroual, Horst Theel The Effects of Using Business Intelligence Systems on an Excellence Management and Decision-Making Process by Start-Up Companies: A Case Study Business Intelligence. One reason for this is that BI software has become increasingly cheaper and more affordable for many start-ups. For example, the BI market is flooded by software vendors (such as SAP, Oracle, IBM, SAS, Microsoft, and open source vendors) that are specific to start-ups. On the other hand, increasing competitive pressure and the requirement to be able to rely on reliable information quickly and at all times ensure strong demand. Against this background, the aim of this present paper is to demonstrate the use of business intelligence in start-ups and to give an overview of the providers of business intelligence solutions that are suitable for start-up companies. 2. Business Intelligence The term Business Intelligence (BI) was introduced by Gartner Group analyst Howard Dresner in the middle of 1990s and defined as a collective term for concepts and methods that support decision-making through information analysis, delivery, and processing. BI has become widespread in business practice and science and is widely used. However, there is still disagreement in understanding the term. This uncertainty leads to an undefined variety of definitions. A precise demarcation proves to be difficult since each selected definition remains vulnerable. In 1996, Business Intelligence was defined as follows: „Data analysis, reporting, and query tools can help business users wade through a sea of data to synthesize valuable information from it – today these tools collectively fall into a category called Business Intelligence” (Anandarajan, Srinivasan, and Anandarajan, 2004). Due to the different understanding of business intelligence, different architectures for business intelligence systems are presented in the literature. About the broad knowing of the term used in the present work, above all, various logical processes are given in the references, which forms the basis for a BI architecture. These processes are assigned to the individual concepts and techniques that are summarized in the term Business Intelligence. In this paper, the following processes will be distinguished in BI architecture: 1. Data Collection 2. Data Integration 3. Data Storages 4. Data Processing 5. Data Presentation The data collection includes the operational systems that provide the required data for the Business Intelligence system. In particular, a distinction must be made here between internal and external systems as sources. Through data integration, the required data is transferred from pre-systems, processed and condensed, which is referred to as ETL process. The purpose of the ETL process is to ensure that the processed data can be stored persistently in the data storage or maintenance. The data storage can be realized in different architectural variants. Here Data Warehouse and Data Marts are used. In data processing or data analysis, all concepts and tools that are primarily concerned with the evaluation and analysis of the data are assigned to this process. This level is therefore assigned to analytical applications, which evaluate the data stored in the data storage process according to predetermined criteria. This process also includes components that enable online analytical processing (OLAP) and data mining components that are used to detect data patterns. In the data presentation is the target group specific preparation and presentation of the analysis results for the user. For this purpose, different concepts are used, such as OLAP clients for the implementation of ad-hoc inquiries or prefabricated target-group-specific reports. This level can also be assigned dashboards or management cockpit, planning and balanced scorecards, which are becoming increasingly important. The following figure gives an overview of the individual processes and shows which components belong to which process step. 31 Otmane Azeroual, Horst Theel The Effects of Using Business Intelligence Systems on an Excellence Management and Decision-Making Process by Start-Up Companies: A Case Study Figure 1: Business Intelligence Process (Wang, J., Chen, T. and Chiu, S. (2005)) 3. Objectives of Business Intelligence In business, it is important to have sufficient, high-quality information and key performance indicators (KPIs) as the basis for decisions. The biggest problem, however, is primarily the merging of information. Many documents, spreadsheets or databases hide inside companies and contain a lot of relevant information that is very difficult to merge and provide meaningful information. So, an overall holistic view is to be created, which is available as a basis for decisions. Therefore, it is possible, for example, optimize business processes, minimize risks, reduce costs, increase added value. Also, the use of BI can become a real competitive advantage, since the necessary information is practically available at the click of a mouse. Using Business Intelligence has three main objectives. Improvement of decision basis: The decisions to be taken are usually made by available information. Thus, it is obvious that with better preparation of information as well as with the consideration of a multiplicity of information the basis of the decision is substantially improved. Information, that is, facts about certain things, is present in large scale in today’s businesses. The use of BI makes it possible to translate them into a format that gives them an information advantage in their daily work. Increasing the transparency of corporate actions: With the help of BI, the employee should be enabled to take responsibility for his area through facts and operating numbers and to be able to understand company decisions. BI provides the opportunity to enhance that visibility and empowers employees to see the impact of their area directly in the context of the enterprise as a whole. Demonstrate the relationships between solitary information: Due to the complexity of business processes, decisions in many areas of companies have far-reaching consequences. The BI solutions’ aim to link data from different sources and to recognize relationships that cannot be obtained from the individually considered sources of information. This is the knowledge component of BI, which should be carried out by absolute professionals in the relevant field, as generating such information increases the transparency of the entire process within companies. 4. Requirements of Business Intelligence Almost every business can benefit from the use of business intelligence, but there are not always the right conditions to successfully implement business intelligence. It’s not just about the technical prerequisites to be able to access the relevant databases, but also questions of corporate culture and the way in which business intelligence is approached. Essentially, the three requirements for BI can be represented as follows: Willingness to make things in question: BI offers the opportunity to challenge things that have been in the business for a long time. It is possible to analyze changed structures, to create new information combinations and to simply look at changes on suspicion. If the basic structure of the information is well-structured, regarding both the technical conditions and the organization of the data, this offers a wide field of confirmation. 32 Otmane Azeroual, Horst Theel The Effects of Using Business Intelligence Systems on an Excellence Management and Decision-Making Process by Start-Up Companies: A Case Study Willingness to think unconventionally: Business Intelligence creates entirely new insights. These must be explicitly allowed to take into account things that might at first glance be considered nonsensical or unrelated. Management Attention: From the first two points, realize that BI projects have to take one or the other way to be successful. However, this also means that the management also accepts this. It is very administrable for BI projects if they are provided with the appropriate support from the responsible management, this significantly increases the acceptance and willingness to participate in such processes. 5. Business Intelligence Providers for Start-ups Although business intelligence solutions are seen as major investments for large companies, more and more providers have been pushing for start-ups for several years. In the following, the solutions of the larger providers are presented briefly: SAP The German software provider SAP has been a market leader in Germany for years and internationally at BI-Software. “SAP BusinessObjects Edge” offers a comprehensive and powerful business intelligence solution for start-ups. The product includes features for different BI needs: flexible ad-hoc queries and analytics, dashboards and visualization, data integration, and pre-configured data mart solutions. SAP BusinessObjects Edge Standard, SAP BusinessObjects Edge with Data Integration and SAP BusinessObjects Edge with Data Management are available. Oracle The “Business Intelligence Standard Edition one” of Oracle BI system is geared to the needs of start-up companies. As a complete solution, this is designed for five to fifty users. Comprehensive features such as interactive dashboards, ad-hoc analytics, proactive intelligence and insight, and advanced reporting and publishing mobile and predictive analytics are included in the solution. IBM IBM Cognos products provide business intelligence solutions for start-ups. The tools for start-ups include the functions Reporting, Analysis, Planning, Budgeting, and Forecasting as well as Dashboards and Balanced Scorecards. SAS With the SAS Business Intelligence – Edition M product, SAS has launched a bespoke BI solution for start-ups. The solution has a modular structure and can, therefore, be expanded as requirements grow. The Edition M consists of a data integration component, an add-in for integration with Microsoft Office products, a dynamic desktop interface, and a Web Report Studio. Microsoft With “Microsoft Reporting and Analysis Services” Microsoft provides a Business Intelligence solution for start-ups. The solution offers data presentation and reporting, comprehensive analysis functions, fast access to large volumes of data and extensive functionality in the Microsoft standard software. Open source vendors In addition to big players such as SAP, Oracle, and IBM, some open source providers such as Jaspersoft, Pentaho, Jedox, and SpagoBI have established themselves on the market in recent years, offering solutions for start-ups. These four vendors use a similar business model that builds on commercial open source software. It includes a Free Community version and a Paid Enterprise version with vendor support and special features. Nevertheless, the four open source subjects differ from each other: Jaspersoft Jaspersoft is one of the largest providers of integrated BI solutions for start-ups. Various modules are offered for the individual subtasks, which can be connected to each other via interfaces without much effort. The list of individual modules is provided by Jaspersoft ETL, JasperReports Server (Report Server) with JasperReports Library and Jaspersoft OLAP (Mondrian Custom Solution), and Jaspersoft Studio (Report Editor). Jaspersoft relies on third-party vendors in 33 Otmane Azeroual, Horst Theel The Effects of Using Business Intelligence Systems on an Excellence Management and Decision-Making Process by Start-Up Companies: A Case Study the ETL and OLAP areas, but the modules are adapted to their product line. All submodules can also be used separately. Jaspersoft focuses on reporting and distribution. The report server is at the heart of the solution. Pentaho Pentaho is one of the market leaders in open source BI for start-ups and has a high profile. Like Jaspersoft, Pentaho relies on customized, partially existing Open Source projects acquired by Pentaho. The focus is on data integration and reports automation. The product portfolio consists of Business Analytics Platform, Data Integration, Report Designer, Aggregation Designer & Schema Workbench and Metadata Editor. Jedox Jedox offers a complete BI suite that includes everything from ETL to OLAP to dashboards and reports. The hobby was and still is the powerful OLAP module Jedox. By integrating into Excel, Jedox offers a lot of added value for many startups, since a wide variety of data is often already maintained in Excel spreadsheets. Jedox integrates with Excel and replaces the pivot function, but offers many additional features such as target / actual deviations. The greatest advantage of integrating with Excel is above all in the “familiar” environment, because office applications are widely used in startups. As a result, the training effort here is relatively low overall. SpagoBI As the only provider of integrated BI solutions for start-ups, SpagoBI offers all modules only in an open source version. There is no Enterprise version of SpagoBI. The business model is to provide services in the field of module setup and customization. Essentially, SpagoBI offers the advantage that all tendered software solutions can be managed via a central platform via the browser. So can a solution that has been developed with SpagoBI. SpagoBI is a small BI suite made up of several open source BI tools packed together, e.g., ETL, OLAP, Data Mining, Reporting (including Talent, Mondrian, Weka, BIRT and Jasper-Reports Library). Also, SpagoBI does not offer further modules. They are mainly used to optimize the presentation of BI results on mobile devices or to support the connection of geographical data with businessrelevant data. In addition to the five large providers SAP, Oracle, IBM, SAS and Microsoft, start-up companies like to buy software providers from Open Source, such as Jaspersoft, Pentaho, Jedox Palo and SpagoBI, because they negotiate at eye level, have advantages in terms of local presence and support or know-how for certain tasks or industries. In summary, it can be said that the providers of open source BI solutions for start-ups are well represented. In addition to a free version, they also offer a commercial version of their software. However, their business version can often be purchased cheaper than that of the significant providers. The difference between the free version and the paid version is in most cases in advanced features and professional support. 6. Use of Business Intelligence in Start-ups Whether inventory management, financial accounting or storage costs, companies need access to up-to-date and reliable data at all times to plan well. In recent years, BI systems are increasingly being used by start-ups as well. Especially for data integration (ETL), data storage (Data Warehouse), data preparation or analysis (OLAP) and data presentation (planning, reporting). Reporting solutions eliminate the need for a manual and error-prone gathering of data from a variety of sources: all metrics are automatically merged into a single system and correlated in any desired combination. Thus, business intelligence has become an indispensable basis for decision-making in companies. Hardly any large enterprise today works without a BI system. Due to the implementation effort and the corresponding costs of the complex solutions, these seemed to be made only for large companies. Especially for start-ups, BI systems offer a huge competitive advantage. For a company without a BI system, the development of a report requires enormous effort: tons of numbers are extracted manually from Excel spreadsheets, billing systems, and other programs to be saved in a new file. This goes through the hands of various employees. Such a procedure not only costs valuable working time, but it also carries the risk of severe transmission errors. If you instead use a systematic BI s …