CHAPTER OVERVIEW
SECTION 6.1 – Data, Information, Databases
The Business Benefits of High-Quality Information
Storing Information Using a Relational Database Management System
Using a Relational Database for Business Advantages
Driving Websites with Data
SECTION 6.2 – Business Intelligence
The Business Benefits of Data Warehousing
Performing Business Analysis with Data Marts
Uncovering Trends and Patterns with Data Mining
Supporting Decisions with Business Intelligence
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CHAPTER SIXDATABUSINESS INTELLIGENCECHAPTER OVERVIEWSECTION 6.1 – Data, Information, DatabasesThe Business Benefits of High-Quality InformationStoring Information Using a Relational Database Management SystemUsing a Relational Database for Business AdvantagesDriving Websites with DataSECTION 6.2 – Business IntelligenceThe Business Benefits of Data WarehousingPerforming Business Analysis with Data MartsUncovering Trends and Patterns with Data MiningSupporting Decisions with Business IntelligenceSECTION 6.1DATA, INFORMATION, AND DATABASESLEARNING OUTCOMESExplain the four primary traits that determine the value of informationDescribe a database, a database management system, and the relational database modelIdentify the business advantages of a relational databaseExplain the business benefits of a data-driven websiteTHE BUSINESS BENEFITS OF HIGH-QUALITY INFORMATIONInformation is everywhere in an organizationEmployees must be able to obtain and analyze the many different levels, formats, and granularities of organizational information to make decisionsSuccessfully collecting, compiling, sorting, and analyzing information can provide tremendous insight into how an organization is performingTHE BUSINESS BENEFITS OF HIGH-QUALITY INFORMATIONLevels, Formats, and Granularities of InformationInformation Type: Transactional and AnalyticalTransactional information – Encompasses all of the information contained within a single business process or unit of work, and its primary purpose is to support the performing of daily operational tasksAnalytical information – Encompasses all organizational information, and its primary purpose is to support the performing of managerial analysis tasksInformation Type: Transactional and AnalyticalInformation Type: Transactional and AnalyticalInformation TimelinessTimeliness is an aspect of information that depends on the situationReal-time information – Immediate, up-to-date informationReal-time system – Provides real-time information in response to requestsInformation QualityBusiness decisions are only as good as the quality of the information used to make the decisionsYou never want to find yourself using technology to help you make a bad decision fasterInformation QualityCharacteristics of High-quality InformationAccurateCompleteConsistentUniqueTimelyInformation QualityLow Quality Information ExampleUnderstanding the Costs of Using Low-Quality InformationThe four primary sources of low quality information includeCustomers intentionally enter inaccurate information to protect their privacyDifferent entry standards and formatsOperators enter abbreviated or erroneous information by accident or to save timeThird party and external information contains inconsistencies, inaccuracies, and errorsUnderstanding the Costs of Using Low-Quality InformationPotential business effects resulting from low quality information includeInability to accurately track customersDifficulty identifying valuable customersInability to identify selling opportunitiesMarketing to nonexistent customersDifficulty tracking revenueInability to build strong customer relationshipsUnderstanding the Benefits of Good Information High quality information can significantly improve the chances of making a good decision Good decisions can directly impact an organization's bottom lineSTORING INFORMATION IN A RELATIONAL DATABASE Information is everywhere in an organizationInformation is stored in databasesDatabase – maintains information about various types of objects (inventory), events (transactions), people (employees), and places (warehouses)STORING INFORMATION IN A RELATIONAL DATABASE Database management systems (DBMS) –Allows users to create, read, update, and delete data in a relational databaseSTORING INFORMATION IN A RELATIONAL DATABASE Data element – The smallest or basic unit of informationData model – Logical data structures that detail the relationships among data elements using graphics or picturesMetadata – Provides details about dataData dictionary – Compiles all of the metadata about the data elements in the data modelStoring Data Elements in Entities and AttributesEntity – A person, place, thing, transaction, or event about which information is storedThe rows in a table contain entitiesAttribute (field, column) – The data elements associated with an entityThe columns in each table contain the attributesRecord – A collection of related data elementsCreating Relationships Through KeysPrimary keys and foreign keys identify the various entities (tables) in the databasePrimary key – A field (or group of fields) that uniquely identifies a given entity in a tableForeign key – A primary key of one table that appears an attribute in another table and acts to provide a logical relationship among the two tablesUSING A RELATIONAL DATABASE FOR BUSINESS ADVANTAGESDatabase advantages from a business perspective includeIncreased FlexibilityA well-designed database shouldHandle changes quickly and easilyProvide users with different viewsHave only one physical viewPhysical view – Deals with the physical storage of information on a storage deviceHave multiple logical viewsLogical view – Focuses on how individual users logically access information to meet their own particular business needsIncreased Scalability and PerformanceA database must scale to meet increased demand, while maintaining acceptable performance levelsScalability – Refers to how well a system can adapt to increased demandsPerformance – Measures how quickly a system performs a certain process or transactionReduced Information RedundancyDatabases reduce information redundancyInformation redundancy – The duplication of data or storing the same information in multiple places Inconsistency is one of the primary problems with redundant informationIncrease Information Integrity (Quality)Information integrity – measures the quality of informationIntegrity constraint – rules that help ensure the quality of informationRelational integrity constraintBusiness-critical integrity constraint Increased Information SecurityInformation is an organizational asset and must be protectedDatabases offer several security features Password – Provides authentication of the userAccess level – Determines who has access to the different types of information Access control – Determines types of user access, such as read-only accessDRIVING WEBSITES WITH DATAData-driven websites – An interactive website kept constantly updated and relevant to the needs of its customers using a databaseContent creatorContent editorStatic informationDynamic informationDynamic catalogDRIVING WEBSITES WITH DATADRIVING WEBSITES WITH DATAData-driven website advantagesEasy to manage contentEasy to store large amounts of dataEasy to eliminate human errorsDRIVING WEBSITES WITH DATASECTION 6.2BUSINESS INTELLIGENCELEARNING OUTCOMESDefine a data warehouse and provide a few reasons it can make a manager more effectiveExplain ETL and the role of a data mart in businessDefine data mining and explain the three common forms for mining structured and unstructured dataIdentify the advantages of using business intelligence to support managerial decision makingTHE BUSINESS BENEFITS OF DATA WAREHOUSINGData warehouses extend the transformation of data into informationIn the 1990’s executives became less concerned with the day-to-day business operations and more concerned with overall business functionsThe data warehouse provided the ability to support decision making without disrupting the day-to-day operationsTHE BUSINESS BENEFITS OF DATA WAREHOUSINGData warehouse – A logical collection of information – gathered from many different operational databases – that supports business analysis activities and decision-making tasksThe primary purpose of a data warehouse is to aggregate information throughout an organization into a single repository for decision-making purposesTHE BUSINESS BENEFITS OF DATA WAREHOUSINGTHE BUSINESS BENEFITS OF DATA WAREHOUSINGPERFORMING BUSINESS ANALYSIS WITH DATA MARTSExtraction, transformation, and loading (ETL) – A process that extracts information from internal and external databases, transforms the information using a common set of enterprise definitions, and loads the information into a data warehouseData mart – Contains a subset of data warehouse informationPERFORMING BUSINESS ANALYSIS WITH DATA MARTSMultidimensional Analysis Databases contain information in a series of two-dimensional tablesIn a data warehouse and data mart, information is multidimensional, it contains layers of columns and rowsDimension – A particular attribute of informationCube – Common term for the representation of multidimensional informationMultidimensional Analysis Cubes of InformationInformation Cleansing or Scrubbing An organization must maintain high-quality data in the data warehouseInformation cleansing or scrubbing – A process that weeds out and fixes or discards inconsistent, incorrect, or incomplete informationInformation Cleansing or Scrubbing Contact Information in an Operational SystemInformation Cleansing or Scrubbing Standardizing Customer Name from Operational SystemsInformation Cleansing or Scrubbing Information Cleansing ExampleInformation Cleansing or Scrubbing Cost of Accurate and Complete InformationUNCOVERING TRENDS AND PATTERNS WITH DATA MININGData mining – The process of analyzing data to extract information not offered by the raw data aloneData-mining tools – use a variety of techniques to find patterns and relationships in large volumes of information Classification Estimation Affinity grouping Clustering UNCOVERING TRENDS AND PATTERNS WITH DATA MININGStructured data – Data already in a database or a spreadsheetUnstructured data – Data does not exist in a fixed location and can include text documents, PDFs, voice messages, emailsText mining – Analyzes unstructured data to find trends and patterns in words and sentencesWeb mining – Analyzes unstructured data associated with websites to identify consumer behavior and website navigationUNCOVERING TRENDS AND PATTERNS WITH DATA MININGCommon forms of data-mining analysis capabilities includeCluster analysisAssociation detectionStatistical analysisCluster AnalysisCluster analysis – A technique used to divide an information set into mutually exclusive groups such that the members of each group are as close together as possible to one another and the different groups are as far apart as possibleAssociation DetectionAssociation detection – Reveals the relationship between variables along with the nature and frequency of the relationships Market basket analysisStatistical AnalysisStatistical analysis – Performs such functions as information correlations, distributions, calculations, and variance analysisForecast – Predictions made on the basis of time-series informationTime-series information – Time-stamped information collected at a particular frequencyThe Problem: Data Rich, Information PoorBusinesses face a data explosion as digital images, email in-boxes, and broadband connections doubles by 2010The amount of data generated is doubling every yearSome believe it will soon double monthlyThe Solution: Business IntelligenceImproving the quality of business decisions has a direct impact on costs and revenueBI enables business users to receive data for analysis that is:ReliableConsistentUnderstandableEasily manipulatedThe Solution: Business IntelligenceBI Can Answer Tough QuestionsVisual Business IntelligenceInforming – Accessing large amounts of data from different management information systemsInfographics – Displays information graphicallyData visualization – Allows users to “see” or visualize data to transform information into a business perspectiveData visualization tools – Sophisticated analysis techniques such as pie charts, controls, instruments, maps, time-series graphs, and moreLEARNING OUTCOME REVIEWNow that you have finished the chapter please review the learning outcomes in your text