Forms and Concepts of Business Intelligence

Assignment 1: Business Intelligence

Value Add of Business Intelligence to a Company

The relevance of business intelligence (BI) to a company cannot be overstated. This is more so the case when it comes to the provision of crucial data for the formation of valuable business insights. To begin with, it is important to note that virtually all organizational departments can make use of BI. Indeed, as Baltzan (2017) points out, BI could come in handy in each and every value chain step. For instance, as Baltzan (2017) further point out, one of the companies that actively makes use of BI is Volkswagen AG. In this case, the company deploys BI in efforts to not only monitor, but also comprehend and manage data across various departments.

Secondly, it would also be prudent to note that BI makes it possible for everyone to gain access to the most current information. BI is instrumental in efforts to ensure that users are provided with the tools that they need to address various queries. For instance, according to Baltzan (2017), BI makes it possible for MasterCard International merchants to closely track their enterprises on a regular basis. Baltzan (2017) point out that in some instances, standardized reports are sufficient for some users. However, the said reports may not answer all questions – and may, as a matter of fact, trigger a set of other queries. To reign in this challenge, Baltzan (2017) are categorical that “a BI system should let users autonomously make ad hoc requests for information from corporate data sources.”

Third, BI also allows centralized access to crucial information for all users. Baltzan (2017) point out that BI solutions make it possible for enterprises to avail crucial information in their databases to users who possess the relevant authorizations. In this case, the said users access the relevant data from a single point. With such information at their fingertips, uses can then be able to gain better understanding of the key drivers of the enterprise.

Downsides of Business Intelligence on Decision-Making Processes

Although, as has been indicated above, BI is of great relevance to a company, there are indeed some negative impacts that the same has on decision-making processes. To begin with, BI could slow down or cloud decision-making processes. This is more so the case given that in some instances, poor data management could give rise to surplus or irrelevant data. Indeed, in the words of Sherman (2014), “a surplus of data can mean that a lot of what your BI tools analyze is irrelevant or unhelpful, muddying results and slowing down processes” (97).

Next, it should also be noted that how beneficial BI is for decision-making purposes could also be influenced by a wide range of factors, i.e. external influencers, human factors, etc. For instance, how various organization executives perceive data could be influenced by factors such as their background and expertise, motivations, etc. For this reason, it is possible for executives to reach different conclusions following their exposure to the same set of data. This could get in the way of effective decision-making – especially given that in some instances, reconciling individual views and perspectives could take a significant amount of time.

Lastly, data breaches as well as loss are not uncommon in the realm of BI. Indeed, as Vercellis (2011) points out, “unless your system is completely disconnected from an online portal, the threat of a security breach is something which must always be proactively considered” (311). If an organization is overly reliant upon the BI technical as well as procedural infrastructure for its operations, then such occurrences could significantly affect its various processes, including decision-making processes.

The Utilization of Tactical, Operational, and Strategic BI

My company could make use of tactical, operational as well as strategic business intelligence in an attempt to comprehend its client base and ensure that the various items offered for sale are managed in a better manner. To a large extent, the company would be further enhancing its decision-making and planning abilities. In my opinion, managers across all levels would in this case have the tools they need to advance the organizational agenda in the short-term, medium-term, as well as long-term. Below is a tabular representation of how my organization would ideally be deploying tactical, operational, as well as strategic BI.

Operational BI

Tactical BI

Strategic BI

Business Focus

Through the utilization of transactional data (real-time), the organization could seek to track business processes deemed core. In this case, managers could be notified in case there are significant variations with respect to set parameters.

Example: Manufacturing analytics

Mid-level managers could in this case have better perspective of the performance of their departments so as to identify deviations from expected/projected performance levels.

The organization already has in place well-defined enterprise-wide goals and objectives. The mandate in this case would be to compare these goals and objectives with the various available performance metrics.

Primary Users

Junior-level managers, i.e. production supervisors

Mid-level managers, i.e. departmental heads

Senior-level managers such as the Vice President – Sales.

Time Frame

Daily

1 month – 3 months (quarterly)

Annual

Data

Real-time data

Historical data

Historical data

Ethical and Security Issues

While using BI tool and data, a company could encounter a number of ethical and security issues. These will be highlighted below:

· Privacy: One of the key ethical concerns/issues in BI is privacy. Customers have a valid and reasonable expectation that their personal information will not be exposed to third parties (or persons that they do not wish to share such information with). Further, clients may not be in favor of the utilization of their private information for any other purpose other than that which they envision. In seeking to predict and comprehend customer behavior, a businesses could collect varied data about its customer base. The said collection of data, and the fact that the data could be accessed by third parties, could clash with customer expectation of privacy. This is more so the case in relation to the extent and nature of data collected.

· Cost: Yet another crucial ethical issue on this front happens to be cost. This is more so the case with regard to whether the cost of BI acquisition, implementation and support can be reconciled with the objective of wealth creation for shareholders. There are a variety of costs that crop up with the implementation and maintenance of BI. In addition to the cost of software (and associated hardware), other costs associated with BI could be in relation to the cost of customization, distribution fees (i.e. in those instances where a business deems it fit to distribute BI apps to certain stakeholders and partners), training costs, support and maintenance, etc. Given that one of the most crucial objectives of commercial enterprises happens to be the maximization of shareholder wealth, it may be difficult to justify the said costs in some instances in the light to some of the downsides of BI as has been highlighted elsewhere in this text.

· Security: The BI application software deployed so as to help in data extraction, processing, as well as analysis and storage are vulnerable to hacking attempts. This is more so the case in those instances whereby sufficient safeguards have not been put in place. Any such breach could expose tones of personal consumer information as well as other sensitive business data or information.