Business Intelligence and its Impact on Business Planning and Business Execution
BU5914: MBA CRITICAL STUDY PAPER
Faheem Hussain Vazir
This review discusses how essential it is for organizations to adopt business intelligence for the review of their short term and long term goals and for the implementation of these goals while chalking out business strategies. Data is defined as volumes of unrefined and unstructured bits, which when given a structure becomes information. Information in a particular domain becomes knowledge and the knowledge in return translates volumes of data into valuable information or intelligence. Thus, the success of decision-making process is subjected to the proximity of data to a business environment and essentially, BI can transform data into intelligence. Business intelligence is further categorized into two perspectives: technical and managerial. Technical perspective focuses on the tools and technologies to collect data and transform it into intelligence. Managerial perspective sees BI as a method to gather, analyse and exploit the information which aids in decision making processes and gains business value in return. The impact of BI on an organization can be at a strategic, operational or tactical business level. The level of impact has been divided into two broad categories: business planning and business execution. Business planning is related to the strategic level of the organization where its global strategies are made and this can create value for business, hence, achieving a competitive advantage over its rivals. The business execution level takes into regard short-term tactics in a business environment and the operational activities of an organization. Moreover, BI can have a lasting impact on businesses by providing it with a pathway for total quality management and customer relationship management processes and activities.
Table of Contents
Relevance of Data: Acquiring Intelligence
Limitations and the Responses of Technical Perspective of BI
Extending the Managerial Perspective: Competitive Intelligence
The Impact of Business Intelligence on Business
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Information technology (IT) revolution has been one of the biggest revolutions of all time (Forester, 1985) which has impacted the complete industry structure in such a way, that only those organizations who have embedded the information technology in their lifeblood, would be able to maintain substantial and sustainable competitive advantage in the business environment (Porter and Miller, 1985). The problem of data collection was solved by IT; however it introduced the new problem of data storage. The problem of data storage was solved by data warehousing and data mining techniques. Organizations felt the necessity to use data they collected over years to facilitate their decision making, which gave birth to decision support systems (Arnott and Pervan, 2005). However, the old decision support system and data warehousing techniques used to contemplate IT function concentrated on a bottom-up data extraction, thus lacking a map of top-down company strategies and involvement (Golfarelli et al., 2004). This lack of managerial involvement brought a turning point in the history of business intelligence (Golfarelli et al., 2004).
Only a few companies work in a monopolistic market, for others there is a competitive and volatile business environment. Companies have to deal with the internal issues of inefficiency in production process and ineffective decision making in resource management and utilization which highlights the weakness of organizations (Kotler and Keller, 2006). Simultaneously it has to grab the external opportunities and defend its strategies from external...
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