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6.1 © 2010 by Pearson
6Chapter
Foundations ofBusiness Intelligence:
Databases andInformation
Management
6.2 © 2010 by Pearson
LEARNING OBJECTIVES
Management Information SystemsChapter 6 Foundations of Business Intelligence: Databases
and Information Management
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Describe how the problems of managing data resources in atraditional file environment are solved by a databasemanagement system
Describe the capabilities and value of a database managementsystem
Apply important database design principles
Evaluate tools and technologies for accessing informationfrom databases to improve business performance and decisionmaking
Assess the role of information policy, data administration, anddata quality assurance in the management of firm’s dataresources
6.3 © 2010 by Pearson
UNDERSTANDING INFORMATION
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Data is a valuable organizational resource& should be managedIts usefulness depends to a large extenton how it is stored, organized, andaccessed/retrievedEmployees must be able to obtain andanalyze the many different levels, formats,and granularities of organizationalinformation to make decisions
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Information Quality
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Business decisions are only as good as the qualityof the information used to make the decisions Characteristics of high quality information include:
AccuracyCompletenessConsistencyUniquenessTimeliness
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Organizing Data in a Traditional File Environment
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File organization conceptsComputer system organizes data in a hierarchy
Field: Group of characters as word(s) or numberRecord: Group of related fieldsFile: Group of records of same typeDatabase: Group of related files
Record: Describes an entityEntity: Person, place, thing on which we storeinformation
Attribute: Each characteristic, or quality, describing entityE.g., Attributes Date or Grade belong to entity COURSE
Management Information SystemsChapter 6 Foundations of Business Intelligence: Databases
and Information Management
6.6 © 2010 by Pearson
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DatabaseA database is comprisedof one or more tables.Each database alsocontains a unique name. Microsoft Access is anexample of a databaseprogram that allows youto store, retrieve, andmanipulate data.
DATABASE FUNDAMENTALS
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DATABASE FUNDAMENTALS
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The use of a traditional approach to file processingencourages each functional area in a corporation todevelop specialized applications and files.
Each application requires a unique data file that islikely to be a subset of the master file.
These subsets of the master file lead to dataredundancy and inconsistency, processinginflexibility, and wasted storage resources.
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Problems with the traditional file environment (filesmaintained separately by different departments)
Data redundancy and inconsistencyData redundancy: Presence of duplicate data in multiple filesData inconsistency: Same attribute has different values
Program-data dependence:When changes in program requires changes to data accessed byprogram
Lack of flexibilityPoor securityLack of data sharing and availability
Management Information SystemsChapter 6 Foundations of Business Intelligence: Databases
and Information ManagementOrganizing Data in a Traditional File Environment
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DatabaseCollection of data organized to serve many applications bycentralizing data and controlling redundant data
Database management systemInterfaces between application programs and physical data filesSeparates logical and physical views of dataSolves problems of traditional file environment
Controls redundancyEliminates inconsistencyUncouples programs and dataEnables organization to central manage data and data security
The Database Approach to Data Management
Management Information SystemsChapter 6 Foundations of Business Intelligence: Databases
and Information Management
6.10 © 2010 by Pearson
DATABASE FUNDAMENTALS
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Database models include:Hierarchical database model – information isorganized into a tree-like structure (using parent/child relationships) in such a way that it cannothave too many relationshipsNetwork database model – a flexible way ofrepresenting objects and their relationshipsRelational database model – stores information inthe form of logically related two-dimensionaltables
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Management Information SystemsChapter 6 Foundations of Business Intelligence: Databases
and Information Management
Figure 6-3
A single human resources database provides many different views of data, depending on theinformation requirements of the user. Illustrated here are two possible views, one of interest to abenefits specialist and one of interest to a member of the company’s payroll department.
Human Resources Database with Multiple ViewsThe Database Approach to Data Management
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Relational DBMSRepresent data as two-dimensional tables called relations or filesEach table contains data on entity and attributes
Table: grid of columns and rowsRows (tuples): Records for different entitiesFields (columns): Represents attribute for entityKey field: Field used to uniquely identify each recordPrimary key: Field in table used for key fieldsForeign key: Primary key used in second table as look-up field toidentify records from original table
Management Information SystemsChapter 6 Foundations of Business Intelligence: Databases
and Information ManagementThe Database Approach to Data Management
6.13 © 2010 by Pearson
Management Information SystemsChapter 6 Foundations of Business Intelligence: Databases
and Information Management
Figure 6-4AA relational database organizes data in the form of two-dimensional tables.Illustrated here are tables for the entities SUPPLIER and PART showing howthey represent each entity and its attributes. Supplier_Number is a primarykey for the SUPPLIER table and a foreign key for the PART table.
Relational Database TablesThe Database Approach to Data Management
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Management Information SystemsChapter 6 Foundations of Business Intelligence: Databases
and Information Management
Figure 6-4B
Relational Database Tables (cont.)The Database Approach to Data Management
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Object-Oriented DBMS (OODBMS)Stores data and procedures as objectsCapable of managing graphics, multimedia, JavaappletsRelatively slow compared with relational DBMS forprocessing large numbers of transactionsHybrid object-relational DBMS: Provide capabilities ofboth OODBMS and relational DBMS
Management Information SystemsChapter 6 Foundations of Business Intelligence: Databases
and Information ManagementThe Database Approach to Data Management
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Capabilities of Database Management SystemsData definition capability: Specifies structure of database content,used to create tables and define characteristics of fields
Data dictionary: Automated or manual file storing definitions ofdata elements and their characteristicsData manipulation language: Used to add, change, delete, retrievedata from database
Structured Query Language (SQL)Microsoft Access user tools for generation SQL
Many DBMS have report generation capabilities for creatingpolished reports (Crystal Reports)
Management Information SystemsChapter 6 Foundations of Business Intelligence: Databases
and Information ManagementThe Database Approach to Data Management
6.17 © 2010 by Pearson
DATABASE MANAGEMENT SYSTEMS
• Four components of a DBMS
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Distributing databases: Storing database in more thanone place
Partitioned: Separate locations store different parts of database
Replicated: Central database duplicated in entirety at differentlocations
Management Information SystemsChapter 6 Foundations of Business Intelligence: Databases
and Information ManagementThe Database Approach to Data Management
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Distributing databases
Two main methods of distributing a databasePartitioned: Separate locations store different parts ofdatabaseReplicated: Central database duplicated in entirety atdifferent locations
AdvantagesReduced vulnerabilityIncreased responsiveness
DrawbacksDepartures from using standard definitionsSecurity problems
Management Information SystemsChapter 6 Foundations of Business Intelligence: Databases
and Information ManagementThe Database Approach to Data Management
6.20 © 2010 by Pearson
Distributed Databases
Figure 6-12
There are alternative ways of distributing a database. The central database can be partitioned (a) so that each remote processor hasthe necessary data to serve its own local needs. The central database also can be replicated (b) at all remote locations.
Management Information SystemsChapter 6 Foundations of Business Intelligence: Databases
and Information ManagementThe Database Approach to Data Management
6.21 © 2010 by Pearson
Using Databases to Improve Business Performance and Decision Making
Management Information SystemsChapter 6 Foundations of Business Intelligence: Databases
and Information Management
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Very large databases and systems require specialcapabilities, tools
To analyze large quantities of dataTo access data from multiple systems
Three key techniquesData warehousingData miningTools for accessing internal databases through theWeb
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Management Information SystemsChapter 6 Foundations of Business Intelligence: Databases
and Information Management
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Data warehouse:Stores current and historical data from many core operationaltransaction systemsConsolidates and standardizes information for use acrossenterprise, but data cannot be alteredData warehouse system will provide query, analysis, and reportingtools
Data marts:Subset of data warehouseSummarized or highly focused portion of firm’s data for use byspecific population of usersTypically focuses on single subject or line of business
Using Databases to Improve Business Performance and Decision Making
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DATA WAREHOUSEComponents of a Data Warehouse
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Management Information SystemsChapter 6 Foundations of Business Intelligence: Databases
and Information Management
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Business Intelligence:Tools for consolidating, analyzing, and providingaccess to vast amounts of data to help users makebetter business decisionsE.g., Harrah’s Entertainment analyzes customers todevelop gambling profiles and identify most profitablecustomersPrinciple tools include:
Software for database query and reportingOnline analytical processing (OLAP)Data mining
Using Databases to Improve Business Performance and Decision Making
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Business Intelligence
Figure 6-14A series of analytical toolsworks with data stored indatabases to find patternsand insights for helpingmanagers and employeesmake better decisions toimprove organizationalperformance.
Management Information SystemsChapter 6 Foundations of Business Intelligence: Databases
and Information ManagementUsing Databases to Improve Business Performance and Decision Making
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Management Information SystemsChapter 6 Foundations of Business Intelligence: Databases
and Information Management
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Online analytical processing (OLAP)Supports multidimensional data analysis
Viewing data using multiple dimensionsEach aspect of information (product, pricing, cost,region, time period) is different dimensionE.g., how many washers sold in East in Junecompared with other regions?
OLAP enables rapid, online answers to ad hoc queriesOnline analytical processing, one of the three principletools for gathering business intelligence.
Using Databases to Improve Business Performance and Decision Making
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Management Information SystemsChapter 6 Foundations of Business Intelligence: Databases
and Information Management
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Data mining:More discovery driven than OLAPFinds hidden patterns, relationships in large databases andinfers rules to predict future behaviorE.g., Finding patterns in customer data for one-to-onemarketing campaigns or to identify profitable customers.Types of information obtainable from data mining
Associations: Occurrences linked to single eventSequences: Events linked over timeClassification: Recognizes patterns that describe group to
which item belongsClustering: Similar to classification when no groups have been
defined; finds groupings within dataForecasting: Uses series of existing values to forecast what
other values will be
Using Databases to Improve Business Performance and Decision Making
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Management Information SystemsChapter 6 Foundations of Business Intelligence: Databases
and Information Management
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Predictive analysisUses data mining techniques, historical data, andassumptions about future conditions to predictoutcomes of eventsE.g., Probability a customer will respond to an offer orpurchase a specific product
Text miningExtracts key elements from large unstructured data sets (e.g., stored e-mails)
Using Databases to Improve Business Performance and Decision Making
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Managing Data Resources
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Establishing an information policyFirm’s rules, procedures, roles for sharing, managing, standardizingdata
E.g., What employees are responsible for updating sensitiveemployee information
Data administration: Firm function responsible for specific policiesand procedures to manage dataData governance: Policies and processes for managing availability,usability, integrity, and security of enterprise data, especially as itrelates to government regulationsDatabase administration : Defining, organizing, implementing,maintaining database; performed by database design andmanagement group
Management Information SystemsChapter 6 Foundations of Business Intelligence: Databases
and Information Management
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Ensuring data qualityMore than 25% of critical data in Fortune 1000company databases are inaccurate or incomplete
Most data quality problems stem from faulty input
Before new database in place, need to:
Identify and correct faulty data
Establish better routines for editing data oncedatabase in operation
Management Information SystemsChapter 6 Foundations of Business Intelligence: Databases
and Information ManagementManaging Data Resources
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Data quality audit:Structured survey of the accuracy and level ofcompleteness of the data in an information system
Survey samples from data files, orSurvey end users for perceptions of quality
Data cleansingSoftware to detect and correct data that are incorrect,incomplete, improperly formatted, or redundantEnforces consistency among different sets of datafrom separate information systems
Management Information SystemsChapter 6 Foundations of Business Intelligence: Databases
and Information ManagementManaging Data Resources
6.32 © 2010 by Pearson
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