Section 6.1 Review Questions 1. What are the major types of BI implementation influencing factors?

According to Asif (2009), the following are the major factors that affect the decision making process of BI implementation. 1. Reporting and Analysis Tools 2. Database 3. Extraction, Transformation, and Load (ETL) Tools 4. Costs Involved 5. Benefits These factors need to be analyzed both quantitatively and qualitatively. 2. List some factors related to tools and databases. According to Asif (2009), the following are the major factors that affect the decision making process of BI implementation related to tools and databases. 1. Reporting and Analysis Tools a. Features and functionality b. Scalability and deployability c. Usability and manageability d. Ability to customize applications 2. Database a. Scalability and performance b. Manageability and availability c. Security and customization d. Ability to write back 3. Extraction, Transformation, and Load (ETL) Tools a. Ability to read any source b. Efficiency and productivity

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c. Cross platform support These factors need to be analyzed both quantitatively and qualitatively. 3. List some of the managerial issues. Many managerial issues are related to BI implementation. Illustrative topics are: 1. System development and the need for integration. Developing an effective BI application is complex. 2. Costbenefit issues and justification. Some BI solutions discussed in this book are very expensive and are justifiable only in large corporations. 3. Legal issues and privacy. BI analysis may suggest that a company send electronic or printed catalogs or promotions to only one age group or one gender. 4. BI and BPM today and tomorrow. The quality and timeliness of business information for an organization is not the choice between profit and loss it may be a question of survival. 5. Cost justification; intangible benefits. While enterprise systems provide tangible benefits, it is difficult to quantify their intangible benefits. 6. Documenting and securing support systems. Many employees develop their own decision support or BI modules to increase their productivity and the quality of their work. 7. Ethical issues. BI and predictive analytics can lead to serious ethical issues such as privacy and accountability. 8. BI Project failures. There have been many cases of failures of all types of BI projects. There are multiple reasons for such failures, ranging from human factors to software glitches. 4. What are some of the critical success factors in BI projects? A report from Vodapalli (2009) as cited on Wikipedia (en.wikipedia.org/wiki/ Business_intelligence, accessed January 2010) shows that the following are the critical success factors for a business intelligence implementation. a. Business driven methodology and project management b. Clear vision and planning c. Committed management support and sponsorship

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d. Data management and quality issues e. Mapping the solutions to the user requirements f. Performance considerations of the BI system g. Robust and extensible framework

Section 6.2 Review Questions 1. List several types of integration. Computer-based systems can be integrated so that the constituent parts of the system function as one entity, as opposed to each being used separately. Integration can be at the development level or at the application system level (known as application integration, our main area of interest). Integration has been considered a top issue of importance for years (Spangler, 2005). There are several types of integration: integration of data, applications, methods, and processes. Integration can also be viewed from two other characteristics: functional and physical. Functional integration implies that different applications are provided as a single system. For example, working with e-mail, using a spreadsheet, communicating with external databases, creating graphical representations, and storing and manipulating data can all be accomplished at the same workstation. Similarly, working with a business analytics tool and a dashboard is done from one interface, with one menu, resulting in one output. Physical integration refers to packaging the hardware, software, and communication features required to accomplish functional integration. The discussion in this chapter deals primarily with functional-application integration, which can be done in two ways: Integration of two or more decision-support applications, creating a unified application Integration of one or more BI tools with other information systems, such as blogs, knowledge management, databases, or a financial system.

Integration can occur within a company (internal integration) or between systems of different companies (external integration). 2. Describe the need for BI integration. There are several major objectives/necessities for BI software integration:

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Implementing BI. For BI systems to operate, they usually need to be connected to data sources, utilities, other applications, and so on. Such connections must be accomplished effectively and efficiently. Increasing the capabilities of the BI applications. Several BI development tools may complement each other. Each tool performs the subtasks at which it is the best. For example, BA can be used to recommend an optimal resource-allocation plan, and an attached dashboard can provide the control system that will alert management to deviations from the plan. The opening vignette demonstrated how social software made the BI system working better. Enabling real-time decision support. By having tight integration, it is possible to support decision making in a real-time environment. An example is a transportation system that uses wireless communication and Web services to foster data flow. Enabling more powerful applications. An example is using intelligent systems to provide real-time capabilities. Facilitating system development. Tighter integration allows faster application development and communication among system components. Enhancing support activities. Several support activities can improve the operations of BI applications. For example, blogs, Twitter, wikis, and RSS feeds provide communication and collaboration support as shown in the opening vignette.

BI integration may also result in enhanced capabilities that are not possible otherwise. For strategies for successful integration, see Morgenthal (2005). 3. List the levels of integration. Functional integration, discussed previously, can be considered at two different levels: across different BI and within BI. Integration of BI at these levels is appropriate for systems that can be used to solve repetitive and/or sequential decision problems. BI can also be used to facilitate integration by assisting in the transformation of the outputs of one system as inputs to another system. Combining several analytics, each addressing a specific portion of a complex decision problem, is an example of integration across BI. The second level of integration refers to the integration of several appropriate BI technologies in building a specific complex BI system, especially to take advantage of the strengths of the specific technologies. 4. Describe integration of BI with non-BI systems.

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A BI model for supporting marketing-campaign decisions can be combined with a production-planning supply chain improvement model, with certain outputs of the first system as the inputs to the second system. 4. Define embedded intelligent systems and describe their benefits. In such systems, the intelligent part (e.g., an intelligent agent) is nontransparent to the user, and it may even work in a real-time environment. The automated decision systems (ADS) are of this type. There is an increasing trend to embed intelligent systems in large or complex BI systems, as in the following examples: Computer telephony integration at intelligent call centers to select and assign a human agent for handling a specific customer call in real time Real-time decision making built around online transaction processing (OLTP) systems, such as in collaborative planning, forecasting, and replenishment in supply chain management (SCM), and real-time scheduling decision support Support of strategic management planning and analysis, with built-in intelligent agents Intelligent agents for process enhancements and management to support collaborative decision-making

Section 6.3 Review Questions 1. Describe the basic elements of a multi-tiered application architecture. Today, most of these connections are accomplished via a multitiered application architecture like the one shown in Figure 6.2. This architecture has four tiers:

1. A Web browser where data and information are presented to and data are collected from the end users. 2. A Web server that delivers Web pages, collects the data sent by the end users, and passes data to and from the application server. 3. An application server that executes business rules (e.g., user authorization), formulates database queries based on the data passed by the Web server, sends the queries to the back-end database (or data

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warehouse or mart), manipulates and formats the data resulting from the query, and sends the formatted response to the Web server. 4. A database (data warehouse or mart) server in which the data are stored and managed and users requests are processed. 2. List the ways in which a Management Support System (MSS) application can be connected to back-end databases and other transaction processing systems. In addition to connecting to back-end databases, many BI applications also require integration with a variety of other systemsERP, CRM, knowledge management, supply chain management, electronic data interchange, and other applications, both inside and outside the company. Such integration can be handled with a class of software called enterprise application integration (EAI). This software focuses on the integration of large systems. TIBCO (tibco.com), webMethods (softwareag.com), and WebSphere InterChange Server (from IBM) are examples of companies that have offerings in the EAI arena. 3. What are the benefits of BI/ERP integration? ERP platforms had only transaction processing capabilities and some basic capabilities, including simple reporting, simple analysis and item classification by profitability, turnover, and customer satisfaction. Sophisticated reporting and analysis came from stand-alone BI system. However, companies have recognized that people execute processes better if they can perform an analysis or access business intelligence in real time, in the context of the application they are working on. Therefore, ERP vendors have been building business analytics into their platforms so that users dont have to switch. This may result in a significant improvement in the quality of decision making. For example, at the moment a salesman takes an order, BI provides all the information needed to decide if and how much credit to be offered to the customer. The ERP/BI combinations are most commonly applied to financial decisions; however, companies are starting to apply them to marketing, HR, and various areas of manufacturing. High-level analysis requires bringing together data from a variety of systems, including supply chain management (SCM), manufacturing execution systems, customer relationship management (CRM) and product lifecycle management (PLM). By planning, forecasting, and simulating scenarios, better decision making is possible. 4. Define middleware and describe its attributes.

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To access a data warehouse, users who need to conduct an analysis, find information, or perform data visualization use software known as middleware. Companies and organizations are now building enterprise-wide BI by integrating previously independent applications together with new developments. BI applications also must be connected to items such as the partners systems or to public exchanges. BI users need to interact with Internet and intranet applications through a variety of devices, whose characteristics and performance figures span an increasingly wide range. In all such situations, applications use communication protocols and intermediate software that reside on top of the operating systems to perform the following functions: Hiding distribution (i.e., the fact that an application is usually made up of many interconnected parts running in distributed locations) Hiding the heterogeneity of the various hardware components, operating systems, and communication protocols Providing uniform, standard, high-level interfaces to the application developers and integrators so that applications can be easily composed, reused, ported, and made to interoperate Supplying a set of common services to perform various general-purpose functions to avoid duplicating efforts and to facilitate collaboration between applications.

Section 6.4 Review Questions 1. What is on-demand BI? On-demand computing, also known as utility computing or software as a service (SaaS), is described below. Software as a service (SaaS) is a model of deployment whereby a software or other computer resources are made available when needed. It is like electricity or water. You use them when needed and pay only for what you use. Thus, the concept is also referred to as utility computing. So the users do not need to own any hardware, software, and other facilities, nor to maintain them. Delivery is done by a provider who licenses an application to customers for use as a service on demand. SaaS software vendors may host the application on their own Web servers or download the application to the consumer device, disabling it after use or after the on-demand contract expires. The on-demand function may be handled internally to share licenses within a firm or by a third-party application service provider (ASP) sharing licenses among many firms. All the users need is an

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Internet access and a browser. Payment is made on an actual-use basis or through a fixed subscription fee (for a given number of users). 2. What are its major benefits? Characteristics and benefits of SaaS include: Ability to handle fluctuating demand, even at peak time (a requirement of any adaptive enterprise) Reduced investment in server hardware or shift of server use Network-based access to, and management of, commercially available software Activities managed from central locations rather than at each customers site, enabling customers to access applications remotely via the Web Application delivery typically closer to a one-to-many model (single instance, multitenant architecture) than to a one-to-one model, including architecture, pricing, partnering, and management characteristics Centralized feature updating, which obviates the need for end users to download patches and upgrades Frequent integration into a larger network of communicating software, either as part of a mashup or as a plug-in to a platform Fees are lower initially than traditional software license fees, but are also recurring, and therefore viewed as more predictable as a service, much like maintenance fees for licensed software. The total cost, in the long run, may be higher or lower or even the same as in purchasing software or paying license fees. However, in the short run, it is much lower to use SaaS. More feature requests from users since there is frequently no marginal cost for requesting new features Faster releases of new features since the entire community of users benefits from new functionality The embodiment of recognized best practices since the community of users drives a software publisher to support the best practice. The development of SaaS applications may use various types of software components and frameworks. These tools can reduce the time to market

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and the cost of converting a traditional on-premise software product or building and deploying a new SaaS solution. Much like any other software, software as a service can also take advantage of

Service Oriented Architecture to enable software applications to communicate with each other. Each software service can also act as a service requester, incorporating data and functionality from other services. Enterprise Resource Planning (ERP) software providers leverage SOA in building their SaaS offerings; an example is SAP Business ByDesign from SAP AG. On-demand BI gives SMEs exactly what they are asking for in todays fast-paced competitive markets: an easy-to-use, quick-to-deploy, and reasonably priced solution. The on-demand model offers a low-risk opportunity for enterprises to utilize BI without drowning in the overheads of a large, expensive, and risky project. 3. What are the limitations of on-demand systems? The following are some major limitations of on-demand BI: 1. Integration of vendors software with companys software may be difficult. 2. The vendor can go out of business, leaving the company without a service. 3. It is difficult or even impossible to modify hosted software for better fit with the users needs. 4. Upgrading may become a problem. 5. You may relinquish strategic data to strangers.

Section 6.5 Review Questions 1. List some legal issues of BI. Consider the following specific legal issues: What is the value of an expert opinion in court when the expertise is encoded in a computer? Who is liable for wrong advice (or information) provided by an ES?

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What happens if a manager enters an incorrect judgment value into a BI and the result is damage or a disaster? Who owns the knowledge in a knowledge base? Should royalties be paid to experts who provide knowledge to an ES or a knowledge base? If so, how much should they receive? Can management force experts to contribute their expertise?

Describe privacy concerns in BI. In general, privacy is the right to be left alone and the right to be free from unreasonable personal intrusions. The Internet, in combination with large-scale databases, has created an entirely new dimension of accessing and using data. The inherent power in systems that can access vast amounts of data can be used for the good of society. For example, by matching records with the aid of a computer, it is possible to eliminate or reduce fraud, crime, government mismanagement, tax evasion, welfare cheating, family-support filching, employment of illegal aliens, and so on. The same is true on the corporate level. Private information about employees may aid in better decision making, but the employees privacy may be affected. Similar issues are related to information about customers. Explain privacy concerns on the Web. The Internet offers a number of opportunities to collect private information about individuals. Here are some of the ways it can be done: By reading an individuals newsgroup postings By looking up an individuals name and identity in an Internet directory By reading an individuals e-mail By wiretapping wireline and wireless communication lines and listening to employees By conducting surveillance on employees By asking an individual to complete Web site registration By recording an individuals actions as he or she navigates the Web with a browser, using cookies or spyware

The implications for online privacy are significant. The ability of law enforcement agencies to authorize installation of pen registers and trap-and-trace devices has increased. The U.S. PATRIOT Act also broadens the governments ability to access student information and personal financial information without any

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suspicion of wrongdoing by attesting that the information likely to be found is pertinent to an ongoing criminal investigation List ethical issues in BI. Representative ethical issues that could be of interest in MSS implementations include the following: Electronic surveillance Ethics in DSS design (see Chae et al., 2005) Software piracy Invasion of individuals privacy (discussed earlier) Use of proprietary databases Use of intellectual property such as knowledge and expertise Exposure of employees to unsafe environments related to computers Computer accessibility for workers with disabilities Accuracy of data, information, and knowledge Protection of the rights of users Accessibility to information Use of corporate computers for non-work-related purposes How much decision making to delegate to computers

Relate BI to privacy. The following two rules have been followed fairly closely in past court decisions: (1) The right of privacy is not absolute. Privacy must be balanced against the needs of society. (2) The publics right to know is superior to the individuals right to privacy. These two rules show why it is difficult, in some cases, to determine and enforce privacy regulations. Privacy issues online have their own characteristics and policies. For privacy and security issues in the data warehouse environment, see Elson and LeClerc (2005). The use of data warehousing and mining technologies in BI analysis as well as in the administration and enforcement of corporate laws and regulations may increase peoples concern regarding privacy of information. These fears,

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generated by the perceived abilities of data mining and business analytics, will have to be addressed at the outset of almost any BI development effort.

Section 6.6 Review Questions There are no review questions in this section

Section 6.7 Review Questions 1. Define Web 2.0. Web 2.0 is the popular term for describing advanced Web technologies and applications, including blogs, wikis, RSS, mashups, user-generated content, and social networks. A major objective of Web 2.0 is to enhance creativity, information sharing, and collaboration. 2. List the major characteristics of Web 2.0. The following are representative characteristics of the Web 2.0 environment: The ability to tap into the collective intelligence of users. The more users contribute, the more popular and valuable a Web 2.0 site becomes. Data is made available in new or never-intended ways. Web 2.0 data can be remixed or mashed up, often through Web service interfaces, much the way a dance-club DJ mixes music. Web 2.0 relies on user-generated and user-controlled content and data. Lightweight programming techniques and tools let nearly anyone act as a Web site developer. The virtual elimination of software-upgrade cycles makes everything a perpetual beta or work-in-progress and allows rapid prototyping, using the Web as an application development platform. Users can access applications entirely through a browser. An architecture of participation and digital democracy encourages users to add value to the application as they use it. A major emphasis on social networks and computing. Strong support of information sharing and collaboration.

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3. What new business model has emerged from Web 2.0? A new business model that has emerged from Web 2.0 is the accumulation of the power of the crowd. The potential of such a business model is unlimited. For example, Wikia is working on community-developed Web searches.

Section 6.8 Review Questions 1. Define social network. A social network is a place where people create their own space, or homepage, on which they write blogs (Web logs); post pictures, videos, or music; share ideas; and link to other Web locations they find interesting. 2. List some major social network sites. Students will have different answers, including MySpace and Facebook, Wikipedia and YouTube. 3. Describe the global nature of social networks. Students answers will differ. They many state that the global nature is related to the mass adoption of social networking Web sites pointing to an evolution in human social interaction regardless of location or in all locations. 4. Describe mobile social networking. Mobile social networking refers to social networking where members converse and connect with one another using cell phones or other mobile devices. 5. Identify Facebooks major strategic issues (e.g., look at the marketing efforts at insidefacebook.com and at facebook.com). Students answers will differ, but may refer to mobile services and how to grow or maintain their membership. Strategic issues change so their answers may reflect issues that are not yet crucial. 6. Much of Facebooks early success was due to the close affiliation of its members networks. How does Facebook expand into new markets without losing what originally made the site popular and alienating existing users?

Facebook realized that it could only keep college and university users for 4 years. In 2006, Facebook opened its doors to anyone age 13 or older with a valid e-mail address. Expanding to a global audience has enabled Facebook to compete

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directly with MySpace. Today, Facebook has a number of applications that support photos, groups, events, marketplaces, posted items, and notes. Facebook also has an application called People You May Know, which helps users connect with people they might know. More applications are being added constantly.

Section 6.9 Review Questions 1. What is a virtual world? Virtual worlds are artificial worlds created by computer systems in which the user has the impression of being immersed. The intention is to achieve a feeling of tele-presence and participation from a distance. What are the advantages and disadvantages of providing decision support through virtual worlds? See Technology Insights 6.1 on pages 256-257. Advantages include: Easy access and low cost Experienced and dedicated designer/builders Impression management and creativity enhancement Time compression

Disadvantages include: Learning time and training costs Distractions are numerous Pranksters and spam are common Technology problems persist What activities of a physical tradeshow can be experienced in a virtual event? Which ones cannot be replicated? Virtual world technology may be useful in replicating a tradeshow participation experience by organizing virtual events that can extend the reach of the event to include many more attendees and exhibitors. The virtual tradeshow may have other components, such as a virtual Web conference, a collection of Web seminars, or other educational presentations. Visitors fill out an online registration form to create an online badge before entering the virtual exhibit hall to visit

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various booths. The virtual booths often look like real-world tradeshow booths, with desks and displays that users can relate to easily. Detailed tracking mechanisms enable organizers to record and analyze the flow of traffic in the virtual tradeshow. Virtual tradeshows can serve as international tradeshows, business matchmakers, procurement fairs, and product launches. The experience also translates well for other applications, such as virtual job fairs, virtual benefits fairs, online employee networks, distributor fairs, and venture capital fairs. See Figure 6.4 on page 258. What cannot be replicated are the interpersonal sales efforts, the sales value of being able to shake hands and look at the customer face-to-face and other human contact. What type of data analysis might you perform on data about users in a specific virtualworld setting (e.g., a company island in Second Life, a virtual tradeshow booth)? Students answers will differ.

Section 6.10 Review Questions 1. What is the logic of combining BI and social networks? The opening case demonstrated how blogs, wikis, and RSS supplement BI. The system described showed the potential benefits of using social software and BI. In fact, this combination can be extremely useful. And indeed, one of the major IT consulting companies, Gartner Inc., predicts that such integration can provide a significant opportunity for BI initiatives by typing information directly to decision making in the enterprise. They refer to such combinations as collaborative decision making. 2. Why it is referred to collaborative decision making? In a major report, Gartner Inc.s researchers (Schlegel et al., 2009) describe that a new style of decision support, collaborative decision making (CDM), which combines social software and BI is emerging, and it may dramatically improve the quality of decision making by directly linking the information contained in BI systems with collaborative input gleaned through the use of social software. The key findings of this report are: CDM is a category of decision support system for nonroutine, complex decisions that require iterative human interactions. Ad hoc tagging regarding value, relevance, credibility, and decision context can substantially enrich both the decision process and the content that contributes to the decisions.

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3.

Tying BI to decisions and outcomes that can be measured will enable organizations to better demonstrate the business value of BI.

What can you learn from the Figure 6.5? Students interpretation of Figure 6.5 will differ.

4.

What are the major benefits of CDM? CDM (collaborative decision making) combines social software and BI and dramatically improves the quality of decision making by directly linking the information contained in BI systems with collaborative input gleaned through the use of social software. CDM can rectify the deficiency in organizational decision making by improving the ability to process huge volumes of data.

5.

What are the specific contributions to collaboration of social networks? Restrictions on travel because of the difficult economy force many companies to find a new way to work, collaborate, and make decisions. Gartner Inc. researchers believe that the information technology market responds to the need of collaboration in virtual teams by creating systems that foster a CDM process using social software. The business application of social software techniques pioneered by consumer-driven social networks services, such as Facebook and Myspace, is well under way. Organizations already use collaborative social software to keep informed about where colleagues are and what they are doing and thinking, and to mobilize them for urgent meetings to address problems. Designing collaborative environments that enable decision makers to discuss an issue, brainstorm options, evaluate their pros and cons, and agree on a course of action is a natural evolution of the above trend. Adding social software elements (such as tagging, recommendations, ratings, and contextual information) enriches the collaborative environment, making it (and the results derived from it) more useful.

6.

Explain how CDM works. Combining BI with collaboration and social software provides a direct way to show the value of BI because the analytical insights and measures are linked to business decisions and framed in the social context. For example, in making an investment decision, users can rate their assumptions about future revenue, expense, or interest rate and compare the results of those predictions with a key performance indicator (KPI) that measures sales and profit. The BI platform could then update the prediction model with actual interim results on the appropriate KPIs, helping the users (participants in the KPI) exceed a critical threshold, requiring a rethinking of a decision.

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Section 6.11 Review Questions 1. What is RFID? RFID is a generic technology that refers to the use of radio frequency waves to identify objects. Fundamentally, RFID is one example of a family of automatic identification technologies, which also include the ubiquitous barcodes and magnetic strips. Since the mid-1970s, the retail supply chain (and many other areas) has used barcodes. RFID data can provide useful analytics for supply chain management and performance measurement. Sensor-based RFID can help analyze product conditions within a supply chain. What kinds of data are read/recorded through RFID? The kinds of data that are read from the RFID tag includes manufacturer, product, and serial number information, and data that uniquely identifies the item. Currently, most RFID tags contain 96 bits of data in the form of serialized global trade identification numbers (SGTIN) for identifying cases or serialized shipping container codes (SSCC) for identifying pallets (although SGTINs can also be used to identify pallets). Whatever data is coded into the tag can be read through RFID. (See Figure 6.6 on p. 263) What can a company learn by reading RFID at a distribution center? Sensor-based RFID can help analyze product conditions within a supply chain. In a DC, the primary functions are receiving, put-away, picking, and shipping. Receiving is the collection of all the activities related to the orderly receipt of materials/goods, inspection for quantity and quality, and dispersion of the received goods to storage/put-away and/or to cross-docking for immediate shipment. RFID can track DC operations and the location of tagged items once a truck backs up to the receiving door. Those operations are: (1) unloading the contents of the trailer; (2) verification of the receipt of goods against expected delivery (purchase order); (3) sorting of the damaged goods and documentation of the discrepancy in count and/or product type to be settled later; (4) if needed, application of labels to the pallets, cases, or items so that units can be tracked inside the warehouse; and (5) sorting of goods for put-away or cross-dock based on current demand and schedule. Search online for applications of RFID in health care, entertainment, and sports. Students search results will vary.

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Section 6.12 Review Questions 1. Define reality mining. Reality mining is a new type of data mining that builds on the idea that these datasets from network-connected devices (that send out their location information) could provide remarkable real-time insight into aggregate human activity trends. What types of data are used in reality mining? Data are used from many devices in use by consumers and businesspeople that constantly send out their location information. Cars, buses, taxis, mobile phones, cameras, and personal navigation devices all transmit their locations thanks to network-connected positioning technologies such as GPS, WiFi, and cell tower triangulation. Briefly describe how the data are used to create profiles of users. By analyzing and learning from these large-scale patterns of movement, it is possible to identify distinct classes of behaviors in specific contexts, called tribes. Macrosense is an application platform developed by Sense Networks that takes the data being generated by all of these mobile devices and, after spatial and timebased cleaning, applies proprietary clustering algorithms to these massive datasets to classify the incoming data streams as belonging to different types of customers/clients/etc. This approach allows a business to better understand its customer patterns and also to make more informed decisions about promotions, pricing, and so on. What other applications can you imagine if you were able to access cell phone location data? Do a search on location-enabled services. Students answers will vary.

Section 6.13 Review Questions No review questions

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ANSWERS TO QUESTIONS FOR DISCUSSION 1.

Some say that on-demand BI will be the dominating delivery of BI. Discuss. BI solutions may initially have a negative return on investment (ROI). Reasons include high implementation fees, per-user license fees, maintenance and consulting fees, extensive hidden costs that accumulate over the life of the BI project, and the inability to deliver on the initial program goals and objectives. Also, traditional in-house BI vendors have seldom been able to deliver a unified reporting and analysis solution that allows executives to respond in real time to changing conditions. In addition, the BI solutions remain prohibitively expensive and they have had long implementation periodstypically 18 months or longer requiring extensive allocation of valuable IT resources over the life of the project. Finally, open-ended contracts leave businesses unclear about when the implementation period will end. Therefore, companies, especially small to medium-sized enterprises (SMEs) are turning to the on-demand BI model as a cost-effective alternative to overly complex and expensive analytic reporting solutions. On-demand computing, also known as utility computing or software as a service (SaaS), is described below. Software as a service (SaaS) is a model of deployment whereby a software or other computer resources are made available when needed. It is like electricity or water. You use them when needed and pay only for what you use. Thus, the concept is also referred to as utility computing. So the users do not need to own any hardware, software, and other facilities, nor to maintain them. Delivery is done by a provider who licenses an application to customers for use as a service on demand. SaaS software vendors may host the application on their own Web servers or download theapplication to the consumer device, disabling it after use or after the on-demand contract expires. The on-demand function may be handled internally to share licenses within a firm or by a third-party application service provider (ASP) sharing licenses among many firms. All the users need is an Internet access and a browser. Payment is made on an actual-use basis or through a fixed subscription fee (for a given number of users).

2.

Discuss the benefits and limitations of collaborative decision making in virtual teams. Restrictions on travel because of the difficult economy force many companies to find a new way to work, collaborate, and make decisions. Gartner Inc. researchers believe that the information technology market responds to the need of collaboration in virtual teams by creating systems that foster a CDM process using social software. The business application of social software techniques pioneered by consumer-driven social networks services, such as Facebook and Myspace, is well under way. Organizations already use collaborative social software to keep informed about where colleagues are and what they are doing

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and thinking, and to mobilize them for urgent meetings to address problems. Designing collaborative environments that enable decision makers to discuss an issue, brainstorm options, evaluate their pros and cons, and agree on a course of action is a natural evolution of the above trend. Adding social software elements (such as tagging, recommendations, ratings, and contextual information) enriches the collaborative environment, making it (and the results derived from it) more useful. CDM enables BI systems to tie information modeled in BI systems directly to the decision made in the collaborative environment. BI systems have traditionally been overtly disconnected from the business process. As a result, it is sometimes difficult to see the business value of BI, even in the most insightful reports and analyses. In addition, decision making has been considered an unstructured process that is not repeatable, so there is a lack of tools that facilitate the work of the decision makers. 3. Distinguish between physical and functional integrations in implementing a large BI project for marketing decision support. Functional integration implies that different applications are provided as a single system. For example, working with e-mail, using a spreadsheet, communicating with external databases, creating graphical representations, and storing and manipulating data can all be accomplished at the same workstation. Similarly, working with a business analytics tool and a dashboard is done from one interface, with one menu, resulting in one output. Physical integration refers to packaging the hardware, software, and communication features required to accomplish functional integration. The discussion in this chapter deals primarily with functional-application integration, which can be done in two ways: Integration of two or more decision-support applications, creating a unified application Integration of one or more BI tools with other information systems, such as blogs, knowledge management, databases, or a financial system.

Integration can occur within a company (internal integration) or between systems of different companies (external integration). 4. Discuss the value of embedded intelligence in BI applications. Will intelligent BI be able to replace humans? Discuss. Over the past few years we have seen an increased number of systems that include embedded intelligent components for conducting analysis. In such systems, the intelligent part (e.g., an intelligent agent) is nontransparent to the user, and it may even work in real-time environment. The automated decision systems (ADS) are

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of this type.There is an increasing trend to embed intelligent systems in large or complex BI systems, as in the following examples: Computer telephony integration at intelligent call centers to select and assign a human agent for handling a specific customer call in real time Real-time decision making built around online transaction processing (OLTP) systems, such as in collaborative planning, forecasting, and replenishment in supply chain management (SCM), and real-time scheduling decision support Support of strategic management planning and analysis, with built-in intelligent agents Intelligent agents for process enhancements and management to support collaborative decision-making.

Students positions will vary on the ability of intelligent BI to replace humans. 5. Discuss why it is so important to connect databases and back-end systems to BI. Connecting BI to databases and back-end systems improve the quality and speed of decision making. High-level analysis requires bringing together data from a variety of systems, including supply chain management (SCM), manufacturing execution systems, customer relationship management (CRM) and product lifecycle management (PLM). By planning, forecasting, and simulating scenarios, better decision making is possible. 6. What are the potential benefits and challenges of using RFID in supply-chain management? RFID provides the data and the insight needed for more efficient and effective supply chain management. It reduces uncertainty and waste (excess inventory and other inventory problems such as spoilage and loss) while increasing product availability. The challenges are the upfront RFID costs, cost of the tags, knowledge about placement of the RFID readers, database costs, the need (and costs) to standardize product codes, and the need for everyone in the chain to be using RFID. Given that RFID data streams are large but only include basic tracking information, how would you derive useful information from these streams? Use BI technology to derive useful patterns and insights from the huge data streams.

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What are the benefits and issues of using virtual worlds for decision support? See Technology Insights 6.1 on pages 256-257. Advantages include: Easy access and low cost Experienced and dedicated designer/builders Impression management and creativity enhancement Time compression Disadvantages include: Learning time and training costs Distractions are numerous Pranksters and spam are common Technology problems persist If you had an opportunity to participate in a virtual career fair, what factors would motivate and inhibit your participation? Students answers will differ. Motivations may be related to faster, cheaper, easier to reach a large employer base. Inhibitors may be lack of personal contact, feels like a waste of time, and too many attendees. Location-tracking-based profiling (reality mining) is powerful but also poses privacy threats. Comment. Students answers will differ. Privacy threats relate to user-profiling, intrusive use of personal information, and not being able to control what is being collected. What are the major characteristics of Web 2.0? What are some of the advantages of Web 2.0 applications? The following are representative characteristics of the Web 2.0 environment: The ability to tap into the collective intelligence of users. The more users contribute, the more popular and valuable a Web 2.0 site becomes. Data is made available in new or never-intended ways. Web 2.0 data can be remixed or mashed up, often through Web service interfaces, much the way a dance-club DJ mixes music. Web 2.0 relies on user-generated and user-controlled content and data.

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Lightweight programming techniques and tools let nearly anyone act as a Web site developer. The virtual elimination of software-upgrade cycles makes everything a perpetual beta or work-in-progress and allows rapid prototyping, using the Web as an application development platform. Users can access applications entirely through a browser. An architecture of participation and digital democracy encourages users to add value to the application as they use it. A major emphasis on social networks and computing. Strong support of information sharing and collaboration.

Web 2.0 enhances creativity, information sharing, and collaboration. Discuss the use of virtual communities to do business on the Internet. A virtual community is a social network organized around a common interest, idea, task, or goal; members interact across time, geographic location, and organizational boundaries to develop personal relationships. Virtual communities offer several ways for members to interact, collaborate, and trade. How can wikis be used to facilitate knowledge management? Wikis provide a familiar and easy-to-use platform for sharing and distributing knowledge throughout an organizations locations and time zones. Discuss the relationship between mobile devices and social networking. Mobile social networking enables social networking where members converse and connect with one another using cell phones or other mobile devices.

ANSWERS TO END OF CHAPTER APPLICATION CASE QUESTIONS 1. What is the benefit of RFID for reducing inventory in this case?

RFID technology allows Coca-Cola to track sales and customer taste preferences. It takes time to replenish inventory, which is why safety stocks of inventory would be needed. By tracking inventory in real-time, Coca-Cola knows when to replenish. They rely on RFID information instead of inventory safety stock to avoid out-of-stock conditions.

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How would a restaurant benefit from having RFID-enabled syrup cartridges? They can test new drink flavors and concepts and keep track of the amounts being consumed. By being able to use the flavors in multiple combinations through the dispensers, the restaurant can see what new combinations are most popular. This process saves money. Instead of stocking bottles in numerous flavors, a restaurant can save space, reduce inventory, and not be out of a flavor customers want giving better customer service. What benefit would a customer derive from the new dispenser? Customers will always be able to get the drink they want, even if its brand new, and the beverage will probably be fresher. What issues might impact the widespread acceptance of this dispenser? Price and maintenance cost of the dispenser, ease of use, easy-to-clean, reliability, and good taste of the drinks.

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall