Copyright Notice: This presentation is prepared by Author for Perbanas Institute as a part of Author Lecture Series. It is to be used for educational and non-commercial purposes only and is not to be changed, altered, or used for any commercial endeavor without the express written permission from Author and/or Perbanas Institute. Appropriate legal action may be taken against any person, organization, or entity attempting to misrepresent, charge, or profit from the educational materials contained here. Authors are allowed to use their own articles without seeking permission from any person, organization, or entity.

1. © 2018 Arianto Muditomo All Rights Reserved
Copyright Notice:
This presentation is prepared by Author for Perbanas Institute as a part of Author Lecture Series. It is to be used for educational and non-
commercial purposes only and is not to be changed, altered, or used for any commercial endeavor without the express written permission from
Author and/or Perbanas Institute. Appropriate legal action may be taken against any person, organization, or entity attempting to misrepresent,
charge, or profit from the educational materials contained here.
Authors are allowed to use their own articles without seeking permission from any person, organization, or entity.

2. arianto.muditomo@2018
Referrences:
1) Baltzan, Paige 2014. Business Driven Information Systems. 4th Edition. New York: McGraw-Hill.
2) Pearlson, Keri E. And Saunders Carol S. 2013. Managing and Using Information Systems: A Strategic Approach. 5th Ed.
Danvers: John Wiley & Sons.
3) Turban, Efraim, Volonino, Linda, and Wood, Gregory 2013. Information Technology for Management. 9th Edition.
Hoboken: John Wiley & Sons. (Chapter 11)
4) Turban, Efraim, Strauss, Judy, and Lai, Linda 2016. Social Commerce: Marketing and Technology Management. Hidelberg:
Springer.
5) Xu, Jun and Quaddus, Mohammed 2013. Managing Information Systems: Ten Essential Topics. Amsterdam: Atlantis Press.
6) Turban, Rainer: Introduction to Information Systems Enablig and Transforming Business 2nd Ed., John Wiley & Sons.2009
7) Kenneth C. Laudon and Jane P. Laudon, Management Information Systems, Managing The Digital Firm, Pearson: Prentice
Hall 2006
8) Business information systems : technology, development and management for the e-business / Paul Bocij, Andrew
Greasley and Simon Hickie. – Fifth edition., © Pearson Education Limited 2015
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• Session #1: Information System in Business
• Session #2: IT Strategic Planning
• Session #3: Business Information System
• Session #4: Business Intelligence & Decision Support
• Session #5: Ethics, Privacy and Security
• Session #6: e-Business and e-Commerce
• Session #7: Knowledge Management
• Session #8: Enterprise Information System

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§ Understand organizations’ need for business intelligence (BI), BI technologies, and how to
make a business case for BI investments.
§ Describe BI architecture, data mining, predictive analytics, dashboards, scorecards, and
other reporting and visualization tools.
§ Understand the value of data, text, and Web mining. Understand managerial decision-
making processes.
§ Describe decision support systems (DSSs), benefits, and structure.
§ Take a forward look at the future of BI in the form of mobile intelligence (MI).

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§ What is Business Intelligence System?
§ What is major components of BI?
§ What is Decision Support System?
§ What is major components of DSS?

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WHAT IS BUSINESS INTELLIGENCE SYSTEM?
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TYPE OF BUSINESS INTELLIGENCE
5
Book [3] p.328

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Competing and conflicting versions of the truth
Lagging reports
Can’t perform in-depth analysis
Difficulty finding crucial data
Need simple-to-use production reporting technology
Delay and difficulty consolidating data
Not able to comply with government and regulatory reporting mandates

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Credit: Gartner Methodology
Source: https://financesonline.com/15-best-business-intelligence-tools-small-big-business/

9. arianto.muditomo@2018
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§ Getting information too late
§ Getting data at the wrong level of detail—either too
detailed or too summarized
§ Getting too many directionless data
§ Not being able to coordinate with other departments
across the enterprise
§ Not being able to share data in a timely manner

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Data W/H; Data Mining;
OLAP; Dashboards;WEB,
Social Media
Search; Data Visualization;
Scorecards
Components
Query;
Reporting;
Analytics
Core Functions
• BI capabilities depend on an integration of several ITs, BI incorporates data warehousing, data mining,
online analytical processing (OLAP), dashboards, the use of the Web, and, increasingly, social media.
• Three core functions of BI are query, reporting, and analytics. Queries are one way to access a particular
view of the data or to analyze what is happening or has happened.
• Data mining and predictive analytic tools are used to find relationships that are hid- den or not obvious, or
to predict what is going to happen.
• BI also includes processes and tools to accurately and consistently consolidate data from multiple sources
and to ensure data quality.

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BI technology evolved beyond being primarily a reporting system when the following
features were added: (1) sophisticated predictive analytics, (2) event-driven
(real-time) alerts, and (3) operational decision support.
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Predictive Analytics
Event-Driven Alerts
Decision Support
is the branch of data mining that focuses on forecasting
trends (e.g., regression analysis) and estimating
probabilities of future events.
are real-time alerts or warnings that are broadcast
when a predefined event, or unusual event, occurs.

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v Flaw #1. Believing That “IfYou Build It, They Will Come.”
v Flaw #2. Being Locked into an “Excel Culture.”
v Flaw #3. Ignoring Data Quality and Relevance Issues.
v Flaw #4.Treating BI as a Static System.
v Flaw #5. Pressing BI Developers to Buy or Build
Dashboards Quickly and with a Small Budget.
v Flaw #6.Trying to Create a “SingleVersion of the Truth”
When One Doesn’t Exist.
v Flaw #7. Lack of a BI Strategy.

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Customer
Segmentation
What market segments do my customers
fall into and what are their characteristics?
Propensity to buy
Which customers are most likely to respond to
my promotion?
Customer
profitability
What is the lifetime profitability of my
customers?
Fraud detection
How can I detect which transactions are likely
to be fraudulent?
Customer attrition
Which customers are at risk of leaving?
Channel
optimization
What is the best channel to reach my
customers in each segment?
Personalize customer relationships for
higher customer satisfaction and
retention.
Target customers based on their need
to increase their loyalty to your product
line. Also, increase campaign
profitability by focusing on those most
likely to buy.
Make business interaction decisions
based on the overall profitability of
customers or customer segments.
Quickly detect fraud and take
immediate action to minimize cost.
Prevent loss of high-value customers
and let go of lower-value customers.
Interact with customers based on their
preference and your need to manage
cost.
Analytical App. Business Question Business Value

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15. arianto.muditomo@2018
§ Decision Support Systems (DSS) are a specific class of computerized
information system that supports business and organizational decision-making
activities .
§ A properly designed DSS is an interactive software- based system intended to
help decision makers compile useful information from raw data, documents,
personal knowledge, and/or business models to identify and solve problems
and make decisions.
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Because decision-making involves a complex
sequence of activities over time, it implies there
are at least three functions that should be assigned
to DSSs:
1) The capability of capturing and saving
information from previous activities;
2) Data processing capability;
3) Data retrieval capability.

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DSS
Data
Knowledge
Database
In-House
Proprietary
DB
Processing
Model
(Financial;
Accounting;
Economical)
External &
Internal
Environment
Qualified Decision

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§ Database.
A DSS database system, like any database, contains data from multiple
sources. Some DSSs do not have a separate database; data are entered
into the DSS model as needed (e.g., as soon as they are collected by
sensors).
§ Model Base.
A model base contains completed models and sets of rules, which are
the building blocks necessary to develop DSS applications.Types of
models include financial, statistical, management science, or
economic. Model-building software, such as Excel, has built-in
mathematical and statistical functions.These models provide the
system’s analytical capabilities.
§ User Interface.
The user interface covers all aspects of the communications between a
user and the DSS. A well-designed user interface can greatly improve
the productivity of the user and reduce errors.
§ Users.
A DSS is a tool for the user, the decision maker.The user is considered
to be a part of the highly interactive DSS system. A DSS has two broad
classes of users: managers and staff specialists, such as financial
analysts, production planners, and market researchers.
§ Knowledge Base.
Many unstructured and semi structured problems are so complex that
they require expertise for their solutions. Such expertise can be
provided by a knowledge-based system, such as an expert system.
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Figure 11.15
Conceptual model of
DSS and its
components.
[3] p. 351

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Figure 11.14
Phases in the decision-
making process.
[3] P. 348
Decision makers go
through four systematic
phases:
• intelligence,
• design,
• choice, and
• implementation

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Intelligence
Design
Choice
Implementation
Monitoring
Problem
Solving
Decision
Making

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§ What is Business Intelligence System?
Business Intelligence (BI) refers to technologies, applications and practices for the collection, integration, analysis,
and presentation of business information.. Business Intelligence systems are data-driven Decision Support Systems
(DSS)
§ What is major components of BI?
The major components of BI are data warehouses and/or marts, predictive analytics, data mining, data visualization
soft- ware, and a business performance management system.
§ What is Decision Support System?
A DSS is an approach that can improve the effectiveness of decision making, decrease the need for training, improve
management control, facilitate communication, reduce costs, and allow for more objective decision making.
§ What is major components of DSS?
The major components of a DSS are a database and its management, the model base and its management, and the
user- friendly interface.
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§ You can find a good reference from
https://blog.marketresearch.com/10-ways-business-
intelligence-can-improve-your-organization
§ Please find a real example how BI can help manager to make
decisions
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23. © 2018 Arianto Muditomo All Rights Reserved