Business Analytics Unit 1 – Flashcards
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An early decision support framework divides decision situations into...
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nine categories, depending on the degree of structuredness and managerial activities. Each category is supported differently.
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Decision support systems can be referred to...
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DSS
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Structured repetitive decisions are supported by ...
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standard quantitative analysis methods, such as MS, MIS, and rule-based automated decision support.
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MS stands for...
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Management System
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MIIS stands for...
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Management Information System
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DSS uses...
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data, models, and sometimes knowledge management to find solutions for semistructured and some unstructured problems.
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BI methods utilizes...
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a central repository called a data warehouse that enables efficient data mining, OLAP, BPM, and data visualization.
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OLAP stands for...
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Online analytical processing
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BPM stands for...
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Business Process Management
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BI architecture includes...
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a data warehouse, business analytics tools used by end users, and a user interface (such as a dashboard).
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Many organizations employ descriptive analytics to
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replace their traditional flat reporting with interactive reporting that provides insights, trends, and patterns in the transactional data.
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Predictive analytics enable
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organizations to establish predictive rules that drive the business outcomes through historical data analysis of the existing behavior of the customers.
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Prescriptive analytics help in
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building models that involve forecasting and optimization techniques based on the principles of operations research and management science to help organizations to make better decisions.
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Big Data analytics focuses
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on unstructured, large data sets that may also include vastly different types of data for analysis.
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Analytics as a field is also known by industry-specific application names such as
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sports analytics. It is also known by other related names such as data science or network science.
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EPM
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Enterprise performance management which is a process-oriented, holistic approach to improving the capability of a business to gain insight and manage its performance at all levels. Financial, strategic, operational, etc.
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Business environment factors:
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markets, consumer demands, technology, and societal...
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Interpersonal managerial role...
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1. Figurehead 2. Leader 3. Liaison
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Decisional managerial role...
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7. Entrepreneur 8. Disturbance handler 9. Resource allocator 10. Negotiator
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Informational managerial role...
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4. Monitor 5. Disseminator 6. Spokesperson
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Managers usually make decisions by following a four-step process (a.k.a. the scientific approach)
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Define the problem (or opportunity) Construct a model that describes the real-world problem. Identify possible solutions to the modeled problem and evaluate the solutions. Compare, choose, and recommend a potential solution to the problem.
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Types of Control (Anthony, 1965)
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Strategic planning (top-level, long-range) Management control (tactical planning) Operational control
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DSS -
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interactive computer-based systems, which help decision makers utilize data and models to solve unstructured problems (Gorry and Scott-Morton, 1971) Decision support systems couple the intellectual resources of individuals with the capabilities of the computer to improve the quality of decisions.
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BI is an umbrella term that combines
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architectures, tools, databases, analytical tools, applications, and methodologies
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BI's major objective is to
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enable easy access to data (and models) to provide business managers with the ability to conduct analysis
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BI helps
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transform data, to information (and knowledge), to decisions, and finally to action
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A BI system has four major components
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a data warehouse, with its source data business analytics, a collection of tools for manipulating, mining, and analyzing the data in the data warehouse business performance management (BPM) for monitoring and analyzing performance a user interface (e.g., dashboard)
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Business Value of BI Analytical Applications
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Customer segmentation Propensity to buy Customer profitability Fraud detection Customer attrition Channel optimization
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Descriptive...
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What happened? What is happening? Uses...Dashboards, Scorecards, Data Warehousing. Well defined
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Predictive...
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What will happen? Why? Data mining, Text mining, Web mining, Forecasting. Accurate projections on the future states.
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Prescriptive...
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What should I do? Why should I do it? Optimization, Simulation, Decision Modeling, Expert Systems
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(ES)
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Expert Systems
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(EIS)
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Executive Information Systems
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Managers' Work : Functions or Roles
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Planning- establish forecasts: formulate outline of things to be done & methods for execution with respect to organization purpose. Organizing- configuring the organization's resources Commanding- issuing instructions of specific & general natures to cause activities to happen. Controlling-- verifying proper implementation of plans Coordinating-- interrelating/ harmonizing activities in the organization
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Interpersonal roles
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Figurehead-- obliged to perform routine duties Leader-- motivates/ activates subordinates Liaison-- maintains network of contacts (trade info & services)
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Informational roles
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Monitor-- seeks & acquires information Disseminator-- transmits information Spokesman-- transmits information to outside (PR)
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Decisional roles
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Entrepreneur-- searches organization & information for opportunities & controls change in an organization. Disturbance handler-- initiates/ devises corrective actions during disturbance. Resource locator-- allocates resources Negotiator-- represents organization in negotiations.
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A DSS does not relieve the manager
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from making the actual decisions.
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To qualify for help from a DSS
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A problem must have a quantifiable dimension that can provide criteria for evaluation of alternative solutions.
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Major reasons a company may want to use and ES include:
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Ability to capture critical expertise, Faster application development, Ability to distribute knowledge, Desire to gain competitive advantage, Flexibility to free experts from making repetitive decisions, Ability to combine knowledge from several experts.
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(EIS)
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Executive Information Systems.These systems are used to access news, stock prices, and information about competitors, customers, key performance indicators, and internal operations Often serve users who have little previous computer training and experience, have been successful without using computers in the past, and may feel that they have little need to use computers now.
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Executive Work
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Centered around goals. Unstructured.
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Executives need
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External information: trade journals, friends in industry, and customers Internal Information: scheduled meetings, unscheduled meetings, and tours are highly valued sources of internal information
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BI needs a data warehouse where
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Therefore, BI is used primarily for larger organizations. Data warehouses are expensive to build and maintain. BUT DSS can be appropriate to any type of organization. DSS is made DIRECTLY to support decision making whereas BI is geared to provide important info that supports decision making INDIRECTLY. this is on average.
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BI - has an executive and strategy orientation while
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DSS is for analysis.
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Analytics:
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The process of developing actionable decisions or recommendation for actions based on historical data.
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Churn:
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Switch to a competitor.
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Big Data: Largely for
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unstructured data and vastly different types of data
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descriptive analytics
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For example, the data describes customer behavior, financial performance, and policy information.
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predictive analytics
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in the Customer Knowledge Store to identify the kinds of customer interaction that are important for customers at different points in their lives.
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At the level of prescriptive analytics,
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the Financial Performance Management system applies financial data to a decision support system. Analytics applied to different domains, such as marketing analytics, financial analytics, and even insurance analytics.
