Understanding The Concept Of Business Intelligence In Slovak Enterprises

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1 Understanding The Concept Of Business Intelligence In Slovak Enterprises Ing. Anna Hamranová, Ing. Anita Romanová, PhD. Ekonomická univerzita v Bratislave, Fakulta podnikového manažmentu, Katedra informačného manažmentu, Dolnozemská 1/b, Bratislava, Slovenská republika tel.: , Abstract This paper discusses the problem of fuzzy logic and its application in economics. Market and the behavior of people is influenced by many factors. It is difficult to make future predictions based on imprecise parameters and guesses. The use of precise methods with imprecise variables leads to imprecise results. Fuzzy logic offers multiple ways how to work with imprecise variable and makes the problem solving and decision making easier. This paper sums up the basic information about variables in economics and about fuzzy logic. Key words Business Intelligence, transakčné systémy, Enterprise Resource Planning, spracovanie podnikových údajov, processing of corporate data Introduction The current period is characterized by information explosion. Maximum information is exposed to pressure managers of enterprises. In an ever increasingly competitive business managers must take decisions under time pressure, and simultaneously with high responsibility. To make these decisions, they must have enough relevant and objective information available quickly, with minimal technical difficulty as possible and in a short time to formulate new requirements for the additional information corresponding to the current situation. The larger the enterprise or the more is distributed in several places, the pressure grows on the quality, relevance, reliability and quantity of corporate information. Adequate tools which a manager needs for work and which are specially designed to the needs of directors are generally referred to as Business Intelligence tools 1. Reasons For Deployment Of Business Intelligence Processing and storing in the data transaction systems, especially in ERP applications (Enterprise Resource Planning)2, is based solely on the use of relational database systems. According to R. M. Riordan3 and M. Svoboda4 the solution is in many ways very convenient. The data here are arranged clearly and if the data is proposed effectively then the data provide a fast implementation of individual transactions and a corresponding response time for queries. Furthermore, they ensure data integrity, security of access to data and necessary characteristics associated with management of the enterprise at a tactical or operational level. ERP applications, however, have in terms of analytical and planning 1 Tvrdíková, M.: Nástroje Business Intelligence - struktura a integrační charakter, Časopis ČSSI 2/2005, ISSN , Dostupný z Enterprise Resource Planning podnikové informačné systémy využívajúce plánovanie podnikových zdrojov. 3 Riordan, R. M.: Vytváříme relační databázové aplikace. Computer Press, 2000, ISBN Svoboda, M.: Riadenie implementácie ERP systémov, Accenture,

2 activities of the enterprise, some limitations which are according to these authors O. Novotný, J. Pour, D. Slánský 5 and M. Humpries 6 : Do not alter the criteria for flexible analysis of business data (e.g. to monitor data at the time of sale, by customer, product, market segments, business representatives, business services, and also in various combinations of the above criteria) It is difficult to ensure that employees have immediate access to large volumes of data in existing databases and to the aggregate data in various levels of aggregation (for the enterprise, service for all customers, customer groups, individual consumers, etc.). ERP and transactional applications are primarily intended for acquisition and updating of data, some of them operate almost constantly at 100% of its potential power; analytical tasks unduly overload these systems and in many cases the systems are overloaded and there is no space for the analytical tasks An important problem is the growing volume of data in the enterprise, which doubles every five years in average.therefore, most of the companies have problems with a lack of data, but these firms are often overloaded with redundant and inconsistent data, which cause difficulties in the decision-making process. Definition Of Business Intelligence A term Bussiness Intelligence was introduced in 1989 by Howard J. Dresner, an analyst from Gartner Group company, which he described as "a set of concepts and methods intended to improve company decision." 7 It stresses here the importance of data analysis, reporting and querying tools that carry users through the quantity of data and assist the synthesis of valuable and useful information. Because of the short period of existence of Business Intelligence there is no single definition that is ed by any of the organizations dealing with standards (eg ANSI, ISO). 8 We further define Business Intelligence based on multiple sources: Business intelligence is a broad category of applications and technologies for gathering, storing, analyzing, and providing access to data to help enterprise users make better business decisions. BI applications include the activities of decision systems, querying, reporting, online analytical processing (OLAP), statistical analysis, forecasting, and data mining. P. Berka 9 states this definition, and can be found on the website 10 Bussiness Intelligence is characterized as a collection and analysis of data aimed at better understanding and responding to the changes that the organization faces. 11 Business intelligence has been referred to as a process of making better decisions through the use of people, processes, data and related tools and methodologies. 12 This 5 Novotný, O., Pour, J., Slánský, D.: Business Intelligence, Grada Publishing, a.s., 2005, ISBN Humphries, M. a kol.: Data warehousing. Návrh a implementace, Computer Press, Praha 2002, ISBN: Dresner, H: Enterprise BI Suites and Reporting: Convergence at Last 8 ANSI American National Standards Institute ISO Intrnational Organization for Standardization Berka, P.: Dobývání znalostí z databází, Academia, Praha 2003, ISBN html,

3 definition considers the technology as a mean, not an essence of Bussiness Intelligence. Bussiness Intelligence is a set of processes, applications and technologies, which aim to promote effective and efficient decision-making processes in an enterprise. It s analysis and planning activities of enterprises and organizations and they are based on the principles of multidimensional views of enterprise data. And this is how it is characterized in the Business Intelligence Server of the Czech Society for Systems Integration 13 from authors O. Novotny, J. Pour and D. Slánský. 14 Applications Business Intelligence cover analysis and planning functions of most areas of corporate governance, namely the sale, purchase, marketing, financial management, controlling, property, human resources management, production, IS / IT and. Business Intelligence Solution is always a combination of different components, because of its specific shape, size and complexity given by needs and circumstances of the enterprise or institution. According to surveys in Slovakia, deployment of applications and Business Intelligence is in its infancy. The majority of Slovak companies in the ERP implementation stage, above which in the near future to implement Business Intelligence applications. This fact prompted us to examine the current state of how Business Intelligence process is understandable for managers of Slovak companies. We used the method of questionnaire survey. The aim of the survey was to identify the readiness of businesses for the introduction and use of Business Intelligence as well as to assess the existence of the implementation of these systems. We have devided the examined sample by size, industry structure and business s as follows: percentage of businesses by size: o micro businesses 11% o small businesses 29% o medium-sized businesses 33% o large businesses 27% percentage of businesses by business sector: o industry 37% o services 24% o information technologies 16% o construction 10% o telecommunications 5% o 8 % percentage of enterprises according to ship structure: o exclusive domestic 48% o dominant domestic 6% o exclusive foreign 29% o dominant foreign 6% o 100% of state ship 11% Discussion Novotný, O., Pour, J., Slánský, D.: Business Intelligence, Grada Publishing, a.s., 2005, ISBN

4 In the beginning we examined the theoretical readiness of managers of firms to cope with the concept of Business Intelligence. We wondered how managers of business-oriented issues in the conceptual apparatus, how they perceive the concept of Business Intelligence. In the first issue, we offered respondents the opportunity to comment on the concept of Business Intelligence, and we asked what the respondent arrives to as a first, what words or phrases when dealing with the concept of Business Intelligence. The collected responses were quantitative and their categorization was necessary to classify them into more common, and related categories. We have established the following categories: BI - tools for decision BI - a comprehensive view of corporate data As can be seen in the Graph 1, 46% mangers felt the concept of Business Intelligence associated with the right, but a simplified view on Business Intelligence as the tool for decision-making. Only 17% of companies fully understand how Business Intelligence tools s the decision-making based on multidimensional views of corporate data. 27%, and 10% of managers did not answere in a way we could allocate the answers in any of the above categories. In this group of respondents referred to the answers, such as.: Business Intelligence is for the various statistics and reports to improve processes in the organization, Business Intelligence implements learning organization and the like. We can say that 63% of respondents have more or less comprehensive understanding of the concept of Business Intelligence, which is a positive finding and a necessary prerequisite for the implementation of Busimess Intelligence systems in practice. The negative is that a relatively high percentage of respondents (27%) stated nothing in their answers, which means that they ignore or diregard the concept of Business. Graph 1: Understanding the concept of Business Intelligence Understanding the concept of Business Intelligence comprehensive view 17% 10% 27% tools for decision comprehensive view tools for decision 46% In the second question of the questionnaire investigation we introduced five different definitions of the term of Busimess Intelligence (as listed in the introduction to this contribution) and we ask respondents to choose what they think best characterizes the concept Business Intelligence. The result is shown in Graph 2. The clearest definition, the authors

5 indicate that P. Berka (34%), and Novotny, Pour, Slánský (23%). The negative is the fact that, despite the offered responses, 9% of respondents have not any of the options. Graph 2: The choice of possible definitions of the concept of Business Intelligence Definition Novotný, Pour, Slánský 23% 9% H.J.Dresner 11% 8% 15% P. Berka 34% The subject of our investigation was not only to describe, how is the issue of theory and conceptual apparatus of the Business Intelligence perceived from the perspective of managers of Slovak companies, but also to determine whether relationships exist between perception and context of this concept and the selected variables. Due to the limited extent of the Article we have selected the following variables: size of enterprise, business sector and s structure of the enterprise. Results are in Graph 3 to 5. Graph 3: Understanding the concept of Business Intelligence, depending on the size of enterprise Concept of Business Intelligence, depending on the size of enterprise 100% 80% 60% 40% 20% 0% micro small medium large comprehensive view tools for decision

6 Graph 4: Understanding the concept of Business Intelligence, depending on the business sector Concept of Business Intelligence, depending on the business sector 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% information technologies industry services construction telecommunications comprehensive view tools for decision Graph 5: Understanding the concept of Business Intelligence, depending on the s structure Concept of Business Intelligence, depending on the s structure 100% 90% 80% 70% 60% 50% 40% 30% comprehensive view 20% 10% 0% tools for decision dominant domestic dominant foreign exclusive domestic exclusive foreign 100% of state ship Conclusions In a brief assessment of the results of the survey weidentified and focused only on those in which we see in the conceptual apparatus of the subject Business Intelligence

7 significant reserves. These are the companies that reported inaccurate answers, or gave nothing in response. Graph 3 shows that the knowledge of Business Intelligence is not dependent on the size of enterprises, because in each category there is from 20% to 30% enterprises which did not answer the question. Graph 4 shows that satisfaction with knowledge of Business Intelligence can be expressed only in telecommunications sector. Other sectors showing reasonable results, except information technology sector. In this sector, we expect 100% awareness and although only 30% of businesses on this issue did not provide satisfactory answer. Interesting results concern the concept of Business Intelligence, depending on the s structure (Graph 5). In the categories "dominant domestic " and "dominant foreign " there is information about the Business Intelligence satisfactory, all know to state oppinion on the subject. The worst situation is in the 100% of state ship companies, in which up to 40% of companies did not reply. Although the concept of Business Intelligence is increasingly faced with raising number of managers of Slovak companies, our survey identified significant reserves in this area and outlined the options in what types of businesses, it is necessary to seek for further education and training in the field of Business Intelligence. References 1. ANSI American National Standards Institute, ISO Intrnational Organization for Standardization Berka, P.: Dobývání znalostí z databází, Academia, 2003, ISBN html, Humphries, M. a kol.: Data warehousing. Návrh a implementace, Computer Press, Praha 2002, ISBN: Inmon, W. H.: Building the Data Warehouse, John Wiley & Sons, Kimball, R.: The Data Warehouse Toolkit Practical Teechniques for Building Dimensional Data Warehouses, John Wiley & Sons, Novotný, O., Pour, J., Slánský, D.: Business Intelligence, Grada Publishing, a.s., Praha, 2005, ISBN Riordan, R. M.: Vytváříme relační databázové aplikace. Computer Press, 2000, 13. ISBN Svoboda, M.: Riadenie implementácie ERP systémov, Accenture, Tvrdíková, M.: Nástroje Business Intelligence - struktura a integrační charakter, Časopis ČSSI 2/2005, ISSN , Dostupný z Summary This Article contains a theoretical introduction to the definition of Business Intelligence as a set of processes, applications and technologies, designed to effectively decision-making processes in the company and which are built on the principles of multidimensional views of enterprise data. Based on the current situation in companies in Slovakia, where most of the companies are still at implementation of ERP systems, we used the method of questionnaire survey to find out the current status of knowledge of the conceptual apparatus of control of Business Intelligence among managers of Slovak enterprises. The aim of the survey was to identify the readiness of businesses in introduction and use of Business Intelligence as well as to assess the existence of the introduction of these systems. In conclusion, we evaluate only those companies that exhibit showed significant reserves in knowledge of the conceptual apparatus of the subject Business Intelligence. In this category there are 20% to 30% of businesses - independent businesses on the size. The assessment by business sector can be satisfied only with companies in the telecommunications sector. Surprising finding was that 30% of enterprises from the information technologies did not react on the subject, because we expected that this sector will be 100% informed. In the assessment by s structure, the worst situation was in "100% of state ship companies, in which 40% of respondents did not answer the question. We have identified some problems and outlined the options in what types of businesses it is necessary to seek for education and training for managers in the field of Business Intelligence.

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