Business Plus Intelligence Plus Technology Equals Business Intelligence

In this article the authors will show how the parallel developments of information technology at the operational business level and decision support concepts progressed through the decades of the twentieth century with only minimal success at strategic application. They will posit that the twin technological developments of the world-wide-web and very inexpensive mass storage provided the environment to facilitate the convergence of business operations and decision support into the strategic application of business intelligence. DOI: 10.4018/jbir.2010071704 IGI PUBLISHING This paper appears in the publication, International Journal of Business Intelligence Research, Volume 1, Issue 1 edited by Richard T. Herschel © 2010, IGI Global 701 E. Chocolate Avenue, Hershey PA 17033-1240, USA Tel: 717/533-8845; Fax 717/533-8661; URL-http://www.igi-global.com ITJ 5524 International Journal of Business Intelligence Research, 1(1), 48-63, January-March 2010 49 Copyright © 2010, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. the previous sentence. We hope, however, to show how these terms represent two mostly parallel streams of activity, streams with only the random connection. It will take a number of technological developments to bring the Monongahela and Allegheny into confluence to become the Ohio. For the purposes of this article we will consider “Business” to encompass all of the traditional functional activities in business such as marketing, manufacturing, accounting, finance, distribution and the support operations provided by the transaction processing systems and other basic technology. Whether it was the abacus, the punched card tabulator or the first few generations of the business computer, the technology played the role of number cruncher or automated record keeper. The “Intelligence” component of the equation includes all of the mathematical and statistical tools developed to solve business “problems” over this same period. Applied mathematics, statistical quality control, operations research and the decision sciences flourished in academia with the occasional foray into the “real world” to address well-know problems. Consulting organizations and even research groups within the larger corporate enterprise made valiant attempts to “apply” their theories and algorithms to the business problems, usually with only marginal success. Why had this been so for most of the twentieth century despite the best efforts of theoreticians and forward thinking business leaders? We hope to show in this article that the issues are based on concepts of efficiency versus effectiveness and why the needed technology had not penetrated far enough up the operational-tactical-strategic ladder to have the hoped-for impact. Through a series of time-lines and application examples we will show how the “Business” flow concentrated on “efficiency” while the “Intelligence” focus was more on “effectiveness”. It took two major technological developments in the 1990s to bring these together. definitions and assumptions In this article we will examine the two flows and their ultimate confluence along two major dimensions: Efficiency-Effectiveness and Operational-Tactical-Strategic. Both dimensions are part the decision-making process. The decision-making process has been examined in many arenas from the psychological to the managerial. Some decisions are for small issues while others have enormous effect. The theoretical approaches have always tried to maximize or optimize some form of outcome through algorithms or formulae. The practical approaches have usually tried to find “satisfactory” answers through simulation and heuristics. In the end, there are cost-effectiveness tradeoffs that contribute to the selection of the appropriate (or even feasible) decision-making approach. These tradeoffs will be examined on these two dimensions. Efficiency is the measurement of Output as a function of Input. The formula is simple: Efficiency = Output/Input (e.g. miles/gallon). We fine tune operations to make sure we wrest the most out of precious resources to accomplish a goal. The time-motion expert charts the operation with stopwatch and clipboard hoping to save precious seconds in highly repetitive operations, seconds which add up to dollars with the operation is repeat thousands or millions of times. On the other hand, effectiveness is not so easy to define. Traditional definitions like “successful in producing a desired or intended result” leave us searching for more definitions. What is the desired or intended result? How do we determine what we should be doing? Perhaps the simplified “Efficiency is doing things right and Effectiveness is doing the right things” gives us a little guidance. One of the assumptions of this article that we hope to demonstrate in later sections is that the business practitioner have used information and decision technology primarily for efficiency while the academics in the intelligence community were trying to determine what was effective. The second dimension we will use in our analytical framework is the Operational14 more pages are available in the full version of this document, which may be purchased using the "Add to Cart" button on the product's webpage: www.igi-global.com/article/business-plus-intelligence-plustechnology/38939?camid=4v1 This title is available in InfoSci-Journals, InfoSci-Journal Disciplines Business, Administration, and Management. Recommend this product to your librarian: www.igi-global.com/e-resources/libraryrecommendation/?id=2