Business Intelligence and Analytics

Business Intelligence and Analytics

Business Intelligence and Analytics

CHAPTER

9 Business Intelligence and Analytics

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MetLife is implementing analytical software to identify medical provider, attorney, and repair shop fraud to aid its special investigations unit (SIU).

Nearly 20 percent of Medicare patients were readmitted to the hospital within 30 days of their initial discharge, running up an additional $17 billion in healthcare costs. Hospitals are now using BI analytics to identify patients are high risk of readmission—especially now that Medicare has begun reducing payments to hospitals with high readmission rates.

IBM Watson Analytics services, a cloud-based business analytics tool that offers a variety of tools for uncovering trends hidden in large sets of data, uses baseball statistics on every player in Major League Baseball from AriBall to build predictions of player performance. You can use this service to gain an edge over your fantasy baseball league competitors.

Principles Learning Objectives

Business intelligence (BI) and analytics are used to support improved decision making.

Define the terms business intelligence (BI) and analytics.

Provide several real-world examples of BI and analytics being used to improve decision making.

Identify the key components that must be in place for an organization to get real value from its BI and analytics efforts.

There are many BI and analytics techniques and tools that can be used in a wide range of problem- solving situations.

Identify several BI techniques and discuss how they are used.

Identify several BI tools.

Define the term self-service analytics and discuss its pros and cons.

Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203

Why Learn about Business Intelligence (BI) and Analytics? We are living in the age of big data, with new data flooding us from all directions at the incomprehensible speed of nearly a zettabyte (1 trillion gigabytes or a 1 followed by 21 zeros) per year. What is most exciting about this data is not its amount, but rather the fact that we are gaining the tools and understanding to do something truly meaningful with it.

Organizations are learning to analyze large amounts of data not only to measure past and current performance but also to make predictions about the future. These forecasts will drive anticipatory actions to improve business strategies, strengthen business operations, and enrich decision making—enabling the organization to become more competitive.

A wide range of business users can derive benefits from access to data, but most of them lack deep information systems or data science skills. Business users need easier and faster ways to discover relevant patterns and insights into data to better support their decision making and to make their companies more agile. Companies that have access to the same kind of data as their competitors but can analyze it sooner to take action faster will outpace their peers. Providing BI tools and making business analytics more understandable and accessible to these users should be a key strategy of organizations.

Members of financial services organizations use BI and analytics to better understand their customers to enhance service, create new and more appealing products, and better manage risk.

Marketing managers analyze data related to the Web-surfing habits, past purchases, and even social media activity of existing and potential customers to create highly effective marketing programs that generate consumer interest and increased sales. Health care professionals who are able to improve the patient experience will reap the benefits of maximized reimbursements, lower costs, and higher market share, and they will ultimately deliver higher quality care for patients.

Physicians use business analytics to analyze data in an attempt to identify factors that lead to readmission of hospital patients. Human resources managers use analytics to evaluate job candidates and choose those most likely to be successful. They also analyze the impact of raises and changes in employee-benefit packages on employee retention and long-term costs.

Regardless of your field of study in school and your future career, using BI and analytics, will likely be a significant component of your job. As you read this chapter, pay attention to how different organizations use business analytics. This chapter starts by introducing basic concepts related to BI and analytics. Later in the chapter, several BI and analytics tools and strategies are discussed.

As you read this chapter, consider the following:

• What is business intelligence (BI) and analytics, and how can they be used to improve the operations and results of an organization?

• What are some business intelligence and analytics techniques and tools, and how can they be used?

This chapter begins with a definition of business intelligence (BI) and busi- ness analytics and the components necessary for a successful BI and analytics program. The chapter goes on to describe and provide examples of the use of several BI techniques and tools. It ends with a discussion of some of the issues associated with BI and analytics.

What Are Analytics and Business Intelligence?

Business analytics is the extensive use of data and quantitative analysis to sup- port fact-based decision making within organizations. Business analytics can be used to gain a better understanding of current business performance, reveal new business patterns and relationships, explain why certain results occurred, optimize current operations, and forecast future business results.

384 PART 3 • Business Information Systems

Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203

Business intelligence (BI) includes a wide range of applications, prac- tices, and technologies for the extraction, transformation, integration, visuali- zation, analysis, interpretation, and presentation of data to support improved decision making. The data used in BI is often pulled from multiple sources and may come from sources internal or external to the organization.

Many organizations use this data to build large collections of data called data ware- houses, data marts, and data lakes, for use in BI applications. Users, including employees, customers, and authorized suppliers and business partners, may access the data and BI applications via the Web or through organizational intranets and extranets—often using mobile devices, such as smartphones and tablets.

The goal of business intelligence is to get the most value out of information and present the results of analysis in an easy to understand man- ner that the layman can understand.

Often the data used in BI and analytics must be gathered from a variety of sources. Helse Vest, a regional health authority in Norway, has 26,500 employees who serve 1 million people in 50 healthcare facilities, including 10 hospitals. Helse Vest implemented a BI system to meet the requirements of a government-sponsored national patient safety program.

The system collects, visualizes, and shares medical data used to identify quality measures and reporting requirements across all care teams and regional hospi- tals. A major challenge for the project was the need for each of the 10 hospitals to combine data from all the facilities within its region for analysis by the pro- gram’s board and hospital managers.

Prior to implementing the new system, it took up to 14 days for employees to produce some reports, making it difficult for hospital staff to assess and act on performance data because it was not cur- rent. With the new system, Helse Vest analysts can easily combine data from different sources and create analytical reports in less than one day.

Real-time data enables Helse Vest to act on information much more quickly, while the metrics are still valid for the staff, and a quick response to performance data is more likely to lead to significant improvements in patient safety measures.

Business Intelligence

Business Intelligence

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