Business Intelligence and Process Modelling
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1 Business Intelligence and Process Modelling F.W. Takes Universiteit Leiden Lecture 3: Business Intelligence & Visual Analytics BIPM Lecture 3: Business Intelligence & Visual Analytics 1 / 72
2 Business Intelligence BIPM Lecture 3: Business Intelligence & Visual Analytics 2 / 72
3 Recap Business Intelligence: anything that aims at providing actionable information that can be used to support business decision making Business Analysis Business Analytics Visual Analytics Predictive Analytics (next weeks) Data Information Knowledge (next week) Process Modelling (April and May) BIPM Lecture 3: Business Intelligence & Visual Analytics 3 / 72
4 Business Intelligence goals Operational intelligence Corporate governance Risk assessment Compliance Auditing Sarbanes-Oxley (SOX) role of IT in corporate governance BIPM Lecture 3: Business Intelligence & Visual Analytics 4 / 72
5 Management Approaches in BI Continuous Process Improvement (CPI): ongoing effort to improve products, services or processes Incremental improvements vs. Breakthrough improvements Evaluate based on efficiency, effectiveness and flexibility Total Quality Management (TQM): improve processes up to the microscopic level, focussing on meeting customer demands and realizing strategic company goals, e.g., Six Sigma BIPM Lecture 3: Business Intelligence & Visual Analytics 5 / 72
6 Six Sigma Originally developed by Motorola in the early 1980s Minimize Defective Parts per Million Opportunities (DPMO) Mean µ and standard deviaton σ Quality level DPMO % broken % OK One Sigma Two Sigma Three Sigma ,7 93,3 Four Sigma ,62 99,38 Five Sigma 233 0,023 99,977 Six Sigma 3,4 0, ,99966 BIPM Lecture 3: Business Intelligence & Visual Analytics 6 / 72
7 Normal distribution BIPM Lecture 3: Business Intelligence & Visual Analytics 7 / 72
8 DMAIC approach Define the problem and set targets, Measure key performance indicators (KPI s) and collect data, Analyze the data to investigate and verify cause-and-effect relationships, Improve the current process based on this analysis, Control the process to minimize deviations from the target. BIPM Lecture 3: Business Intelligence & Visual Analytics 8 / 72
9 Key Performance Indicators KPI: measure, variable or metric to analyze the performance of (part of) an organization Strategic goals Measurable variables SMART Specific Measurable Acceptable Realistic Time-sensitive BIPM Lecture 3: Business Intelligence & Visual Analytics 9 / 72
10 KPI examples Operational: increasing market share by 10% Financial: increase profit by 10% Sales: obtain 10 new customers Human resources: attract 10 new sales officers that are part of the world s top 1% in the field Customer support: forward no more than 10% of the support calls to second line BIPM Lecture 3: Business Intelligence & Visual Analytics 10 / 72
11 BI in practice Codeless reporting Instant querying Rich visualization Dashboards ( Management cockpits ) Scorecards BIPM Lecture 3: Business Intelligence & Visual Analytics 11 / 72
12 Balanced Scorecards R. Kaplan, D. Norton, The balanced scorecard: measures that drive performance, Harvard business review 83(7): , Goal: align business activities to the vision and strategy of the organization Financial and nonfinancial goals Monitor a relatively small number of summative indicators BIPM Lecture 3: Business Intelligence & Visual Analytics 12 / 72
13 Balanced Scorecard BIPM Lecture 3: Business Intelligence & Visual Analytics 13 / 72
14 Balanced Scorecard Four perspectives: Financial Customer Processes Learning and Growth Four elements per perspective Objectives Measures Targets Initiatives BIPM Lecture 3: Business Intelligence & Visual Analytics 14 / 72
15 Balanced Scorecard Perspectives BIPM Lecture 3: Business Intelligence & Visual Analytics 15 / 72
16 Balanced Scorecard Processes BIPM Lecture 3: Business Intelligence & Visual Analytics 16 / 72
17 Relations between Perspectives BIPM Lecture 3: Business Intelligence & Visual Analytics 17 / 72
18 Some terms... Business Activity Monitoring (BAM): insight in operational status and events of a business Complex Event Processing (CEP): monitor events and react immediately if a pattern occurs Corporate Performance Management (CPM): measuring the (financial) performance of a process or organization BIPM Lecture 3: Business Intelligence & Visual Analytics 18 / 72
19 Some systems... Enterprise Resource Planning (ERP) Systems Enterprise Information Systems (EIS) Business Information Systems (BIS) Management Information System (MIS) Executive Information System (EIS) BIPM Lecture 3: Business Intelligence & Visual Analytics 19 / 72
20 ETL Extract data from source systems: generate dumps, exports, etc. Transform data: aggregating, linking, sorting, joining, etc. Loading data into target system into desired (reporting) format BIPM Lecture 3: Business Intelligence & Visual Analytics 20 / 72
21 OLAP OnLine Analytical Processing (OLAP) Given a data table with n attributes: Dimensions of an (n 1)-dimensional cube represent n 1 attributes of the data Value in a cell of the cube represents the remaining attribute Use a slice or dice to get the desired information Suitable for, e.g., star schema data BIPM Lecture 3: Business Intelligence & Visual Analytics 21 / 72
22 OLAP Example Example: website visitor logs, storing: 1 Time 2 Web page 3 Action 4 Conversion BIPM Lecture 3: Business Intelligence & Visual Analytics 22 / 72
23 OLAP Cube Example BIPM Lecture 3: Business Intelligence & Visual Analytics 23 / 72
24 OLAP Cube Example Slice BIPM Lecture 3: Business Intelligence & Visual Analytics 24 / 72
25 OLAP Cube Dice BIPM Lecture 3: Business Intelligence & Visual Analytics 25 / 72
26 OLAP Formalized OnLine Analytical Processing (OLAP) Given a data table D with 4 attributes W, X, Y and Z An OLAP cube can be characterized as a function f : (X, Y, Z) W An example of a slice is a function g : (Y, Z) W Given subsets X X and Z Z a dice is a function h : (X, Y, Z ) W BIPM Lecture 3: Business Intelligence & Visual Analytics 26 / 72
27 Break? BIPM Lecture 3: Business Intelligence & Visual Analytics 27 / 72
28 Visual Analytics BIPM Lecture 3: Business Intelligence & Visual Analytics 28 / 72
29 What is Visualization? Intuition: data is more than its raw bits and bytes Visualization: making something visible to the eye (Oxford dictionary) All visualizations share a common DNA a set of mappings between data properties and visual attributes such as position, size, shape, and color and customized species of visualization might always be constructed by varying these encodings. Heer et al., A Tour through the Visualization Zoo, CACM 53(6): 59 67, Visual Analytics: knowledge discovery (DIKW) based on visualization BIPM Lecture 3: Business Intelligence & Visual Analytics 29 / 72
30 What is Visualization? Data properties: attributes of (groups of) data objects Name; Age; City BIPM Lecture 3: Business Intelligence & Visual Analytics 30 / 72
31 What is Visualization? Data properties: attributes of (groups of) data objects Name; Age; City Frank; 28; Niels Bohrweg 1, Leiden BIPM Lecture 3: Business Intelligence & Visual Analytics 30 / 72
32 What is Visualization? Data properties: attributes of (groups of) data objects Name; Age; City Frank; 28; Niels Bohrweg 1, Leiden Visual attributes: e.g., position, size, shape, label, color, etc. Label; Size; Position Visualization: mapping data properties to visual attributes BIPM Lecture 3: Business Intelligence & Visual Analytics 30 / 72
33 What is Visualization? Data properties: attributes of (groups of) data objects Name; Age; City Frank; 28; Niels Bohrweg 1, Leiden Visual attributes: e.g., position, size, shape, label, color, etc. Label; Size; Position Visualization: mapping data properties to visual attributes Name Label Age Size City Position BIPM Lecture 3: Business Intelligence & Visual Analytics 30 / 72
34 What is Visualization? Data properties: attributes of (groups of) data objects Name; Age; City Frank; 28; Niels Bohrweg 1, Leiden Visual attributes: e.g., position, size, shape, label, color, etc. Label; Size; Position Visualization: mapping data properties to visual attributes Name Label Age Size City Position "Frank", log 2 (28), ( , ) BIPM Lecture 3: Business Intelligence & Visual Analytics 30 / 72
35 What is Visualization? BIPM Lecture 3: Business Intelligence & Visual Analytics 31 / 72
36 Why visualization? SAS, Data Visualization: Making Big Data Approachable and Valuable, 2014 BIPM Lecture 3: Business Intelligence & Visual Analytics 32 / 72
37 Why visualization? SAS, Data Visualization: Making Big Data Approachable and Valuable, 2014 BIPM Lecture 3: Business Intelligence & Visual Analytics 33 / 72
38 Visualization theory Discrete vs. continuous data Categorical vs. quantitative data Mean or median? Variance? Correlations? Regression? Normal distribution or power law? The correct visualization depends on the data itself! BIPM Lecture 3: Business Intelligence & Visual Analytics 34 / 72
39 Listen to the data to... Catch mistakes See patterns Find violations of statistical assumptions Generate hypotheses Do outlier detection BIPM Lecture 3: Business Intelligence & Visual Analytics 35 / 72
40 Anscombe s quartet F.J. Anscombe, Graphs in Statistical Analysis, American Statistician 27 (1): 1721, BIPM Lecture 3: Business Intelligence & Visual Analytics 36 / 72
41 Anscombe s quartet Property Value Accuracy Mean of x 9 exact Sample variance of x 11 exact Mean of y 7.50 to 2 decimal places Sample variance of y plus/minus Correlation between x and y to 3 decimal places Linear regression line y = x to 2 decimal places BIPM Lecture 3: Business Intelligence & Visual Analytics 37 / 72
42 Simpson s Paradox BIPM Lecture 3: Business Intelligence & Visual Analytics 38 / 72
43 Visualization Quality When is a certain visualization good? BIPM Lecture 3: Business Intelligence & Visual Analytics 39 / 72
44 Visualization Quality When is a certain visualization good? Proper mapping of data properties to visual attributes? BIPM Lecture 3: Business Intelligence & Visual Analytics 39 / 72
45 Visualization Quality When is a certain visualization good? Proper mapping of data properties to visual attributes? The number of data properties (variables) that is visualized? BIPM Lecture 3: Business Intelligence & Visual Analytics 39 / 72
46 Visualization Quality When is a certain visualization good? Proper mapping of data properties to visual attributes? The number of data properties (variables) that is visualized? The number of visual attributes that is utilized? BIPM Lecture 3: Business Intelligence & Visual Analytics 39 / 72
47 Visualization Quality When is a certain visualization good? Proper mapping of data properties to visual attributes? The number of data properties (variables) that is visualized? The number of visual attributes that is utilized? Aesthetics?... BIPM Lecture 3: Business Intelligence & Visual Analytics 39 / 72
48 Visualization Quality When is a certain visualization good? Proper mapping of data properties to visual attributes? The number of data properties (variables) that is visualized? The number of visual attributes that is utilized? Aesthetics?... Hard to answer objectively! BIPM Lecture 3: Business Intelligence & Visual Analytics 39 / 72
49 Infographic of infographics BIPM Lecture 3: Business Intelligence & Visual Analytics 40 / 72
50 Visualization Metaphors Important is Big Happy is Up More is Up Categories Are Containers Organization is Physical Structure Similarity is Closeness Control is Up BIPM Lecture 3: Business Intelligence & Visual Analytics 41 / 72
51 Visualization Metaphors Important is Big Happy is Up More is Up Categories Are Containers Organization is Physical Structure Similarity is Closeness Control is Up BIPM Lecture 3: Business Intelligence & Visual Analytics 41 / 72
52 Visualization Metaphors Important is Big Happy is Up More is Up Categories Are Containers Organization is Physical Structure Similarity is Closeness Control is Up BIPM Lecture 3: Business Intelligence & Visual Analytics 42 / 72
53 Visualization Metaphors Important is Big Happy is Up More is Up Categories Are Containers Organization is Physical Structure Similarity is Closeness Control is Up BIPM Lecture 3: Business Intelligence & Visual Analytics 43 / 72
54 Visualization Metaphors Important is Big Happy is Up More is Up Categories Are Containers Organization is Physical Structure Similarity is Closeness Control is Up BIPM Lecture 3: Business Intelligence & Visual Analytics 44 / 72
55 Examples Time-series data Statistical data Geographical data Hierarchical data Network data Heer et al., A Tour through the Visualization Zoo, CACM 53(6): 59 67, BIPM Lecture 3: Business Intelligence & Visual Analytics 45 / 72
56 Index chart BIPM Lecture 3: Business Intelligence & Visual Analytics 46 / 72
57 Stacked graph BIPM Lecture 3: Business Intelligence & Visual Analytics 47 / 72
58 Small multiples BIPM Lecture 3: Business Intelligence & Visual Analytics 48 / 72
59 Horizon graphs BIPM Lecture 3: Business Intelligence & Visual Analytics 49 / 72
60 Examples Time-series data Statistical data Geographical data Hierarchical data Network data BIPM Lecture 3: Business Intelligence & Visual Analytics 50 / 72
61 Scatter plot matrix BIPM Lecture 3: Business Intelligence & Visual Analytics 51 / 72
62 Parallel coordinates BIPM Lecture 3: Business Intelligence & Visual Analytics 52 / 72
63 Examples Time-series data Statistical data Geographical data Hierarchical data Network data BIPM Lecture 3: Business Intelligence & Visual Analytics 53 / 72
64 Flow maps BIPM Lecture 3: Business Intelligence & Visual Analytics 54 / 72
65 Choropleth maps BIPM Lecture 3: Business Intelligence & Visual Analytics 55 / 72
66 Graduated symbol maps BIPM Lecture 3: Business Intelligence & Visual Analytics 56 / 72
67 Cartogram BIPM Lecture 3: Business Intelligence & Visual Analytics 57 / 72
68 Examples Time-series data Statistical data Geographical data Hierarchical data Network data BIPM Lecture 3: Business Intelligence & Visual Analytics 58 / 72
69 Node-link diagram BIPM Lecture 3: Business Intelligence & Visual Analytics 59 / 72
70 Circular dendogram BIPM Lecture 3: Business Intelligence & Visual Analytics 60 / 72
71 Examples Time-series data Statistical data Geographical data Hierarchical data Network data BIPM Lecture 3: Business Intelligence & Visual Analytics 61 / 72
72 Force-directed layout BIPM Lecture 3: Business Intelligence & Visual Analytics 62 / 72
73 Arc diagram BIPM Lecture 3: Business Intelligence & Visual Analytics 63 / 72
74 Annotated matrix BIPM Lecture 3: Business Intelligence & Visual Analytics 64 / 72
75 Dashboards Multiple widgets on one page A widget can contain: OLAP slice KPI metric Data mining results... Codeless reporting BI in the blink of an eye! BIPM Lecture 3: Business Intelligence & Visual Analytics 65 / 72
76 Dashboard (1) BIPM Lecture 3: Business Intelligence & Visual Analytics 66 / 72
77 Dashboard (2) BIPM Lecture 3: Business Intelligence & Visual Analytics 67 / 72
78 Dashboard (3) BIPM Lecture 3: Business Intelligence & Visual Analytics 68 / 72
79 Dashboard (4) BIPM Lecture 3: Business Intelligence & Visual Analytics 69 / 72
80 Dashboard (5) BIPM Lecture 3: Business Intelligence & Visual Analytics 70 / 72
81 Assignment 1 Gaming industry context Sales log spanning 4 years of sales Apply and compare BI techniques Inspect, visualize, aggregate, segment, score... Deliverables: 1 Web-based BI Dashboard 2 Short assignment report in L A TEX BIPM Lecture 3: Business Intelligence & Visual Analytics 71 / 72
82 Lab session February 17 Make progress with Assignment 1 Read paper by Kooti et al. Setup a framework for your dashboard Load some data into your framework Investigate visualization options BIPM Lecture 3: Business Intelligence & Visual Analytics 72 / 72
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