Management Information Systems MANAGING THE DIGITAL FIRM, 12TH EDITION

Chapter 6
FOUNDATIONS OF BUSINESS INTELLIGENCE: DATABASES AND INFORMATION MANAGEMENT

Management Information Systems

CHAPTER 6: FOUNDATIONS OF BUSINESS INTELLIGENCE: DATABASES AND INFORMATION MANAGEMENT

Organizing Data in a Traditional File Environment

File organization concepts

Database: Group of related files File: Group of records of same type Record: Group of related fields Field: Group of characters as word(s) or number
Describes an entity (person, place, thing on which we store information) Attribute: Each characteristic, or quality, describing entity
E.g., Attributes Date or Grade belong to entity COURSE

Management Information Systems

CHAPTER 6: FOUNDATIONS OF BUSINESS INTELLIGENCE: DATABASES AND INFORMATION MANAGEMENT

Organizing Data in a Traditional File Environment

THE DATA HIERARCHY

Management Information Systems

CHAPTER 6: FOUNDATIONS OF BUSINESS INTELLIGENCE: DATABASES AND INFORMATION MANAGEMENT

Organizing Data in a Traditional File Environment

Problems with the traditional file environment (files maintained separately by different departments)
Data redundancy: Data inconsistency:
Presence of duplicate data in multiple files

Program-data dependence:

Same attribute has different values

When changes in program requires changes to data accessed by program

Lack of flexibility Poor security Lack of data sharing and availability

Management Information Systems

CHAPTER 6: FOUNDATIONS OF BUSINESS INTELLIGENCE: DATABASES AND INFORMATION MANAGEMENT

Organizing Data in a Traditional File Environment

TRADITIONAL FILE PROCESSING

Management Information Systems

CHAPTER 6: FOUNDATIONS OF BUSINESS INTELLIGENCE: DATABASES AND INFORMATION MANAGEMENT

The Database Approach to Data Management

Database
Serves many applications by centralizing data and controlling redundant data

Database management system (DBMS)

Interfaces between applications and physical data files Separates logical and physical views of data Solves problems of traditional file environment
Controls redundancy Eliminates inconsistency Uncouples programs and data Enables organization to centrally manage data and data security

Management Information Systems

CHAPTER 6: FOUNDATIONS OF BUSINESS INTELLIGENCE: DATABASES AND INFORMATION MANAGEMENT

The Database Approach to Data Management

HUMAN RESOURCES DATABASE WITH MULTIPLE VIEWS

Management Information Systems

CHAPTER 6: FOUNDATIONS OF BUSINESS INTELLIGENCE: DATABASES AND INFORMATION MANAGEMENT

The Database Approach to Data Management

Relational DBMS
Represent data as two-dimensional tables called relations or files Each table contains data on entity and attributes

Table: grid of columns and rows

Rows (tuples): Records for different entities Fields (columns): Represents attribute for entity Key field: Field used to uniquely identify each record Primary key: Field in table used for key fields Foreign key: Primary key used in second table as look-up field to identify records from original table

Management Information Systems

CHAPTER 6: FOUNDATIONS OF BUSINESS INTELLIGENCE: DATABASES AND INFORMATION MANAGEMENT

The Database Approach to Data Management

RELATIONAL DATABASE TABLES

Management Information Systems

The Database Approach to Data Management

Management Information Systems

The Database Approach to Data Management

Operations of a Relational DBMS

Three basic operations used to develop useful sets of data
SELECT: Creates subset of data of all records that meet stated criteria JOIN: Combines relational tables to provide user with more information than available in individual tables PROJECT: Creates subset of columns in table, creating tables with only the information specified

Management Information Systems

The Database Approach to Data Management

THE THREE BASIC OPERATIONS OF A RELATIONAL DBMS

Management Information Systems

The Database Approach to Data Management

Object-Oriented DBMS (OODBMS)

Stores data and procedures as objects Objects can be graphics, multimedia, Java applets Relatively slow compared with relational DBMS for processing large numbers of transactions Hybrid object-relational DBMS: Provide capabilities of both OODBMS and relational DBMS

Databases in the cloud

Typically less functionality than on-premises DBs Amazon Web Services, Microsoft SQL Azure

Management Information Systems

CHAPTER 6: FOUNDATIONS OF BUSINESS INTELLIGENCE: DATABASES AND INFORMATION MANAGEMENT

The Database Approach to Data Management

Capabilities of Database Management Systems

Data definition capability: Specifies structure of database content, used to create tables and define characteristics of fields Data dictionary: Automated or manual file storing definitions of data elements and their characteristics Data manipulation language: Used to add, change, delete, retrieve data from database
Structured Query Language (SQL) Microsoft Access user tools for generation SQL

Many DBMS have report generation capabilities for creating polished reports (Crystal Reports)

Management Information Systems

CHAPTER 6: FOUNDATIONS OF BUSINESS INTELLIGENCE: DATABASES AND INFORMATION MANAGEMENT

The Database Approach to Data Management

MICROSOFT ACCESS DATA DICTIONARY FEATURES

Management Information Systems

CHAPTER 6: FOUNDATIONS OF BUSINESS INTELLIGENCE: DATABASES AND INFORMATION MANAGEMENT

The Database Approach to Data Management

EXAMPLE OF AN SQL QUERY

Management Information Systems

CHAPTER 6: FOUNDATIONS OF BUSINESS INTELLIGENCE: DATABASES AND INFORMATION MANAGEMENT

The Database Approach to Data Management

AN ACCESS QUERY
Illustrated here is how the query in Figure 6-7 would be constructed using Microsoft Access query building tools. It shows the tables, fields, and selection criteria used for the query.
FIGURE 6-8

Management Information Systems

CHAPTER 6: FOUNDATIONS OF BUSINESS INTELLIGENCE: DATABASES AND INFORMATION MANAGEMENT

The Database Approach to Data Management

Designing Databases

Conceptual (logical) design: Abstract model from business perspective Physical design: How database is arranged on direct-access storage devices Relationships among data elements, redundant database elements Most efficient way to group data elements to meet business requirements, needs of application programs Streamlining complex groupings of data to minimize redundant data elements and awkward many-to-many relationships

Design process identifies

Normalization

Management Information Systems

CHAPTER 6: FOUNDATIONS OF BUSINESS INTELLIGENCE: DATABASES AND INFORMATION MANAGEMENT

The Database Approach to Data Management

AN UNNORMALIZED RELATION FOR ORDER

Management Information Systems

CHAPTER 6: FOUNDATIONS OF BUSINESS INTELLIGENCE: DATABASES AND INFORMATION MANAGEMENT

The Database Approach to Data Management

NORMALIZED TABLES CREATED FROM ORDER

Management Information Systems

The Database Approach to Data Management

Entity-relationship diagram
Used by database designers to document the data model Illustrates relationships between entities

Distributing databases: Storing database in more than one place

Partitioned: Separate locations store different parts of database Replicated: Central database duplicated in entirety at different locations

Management Information Systems

AN ENTITY-RELATIONSHIP DIAGRAM

Management Information Systems

Using Databases to Improve Business Performance and Decision Making

Very large databases and systems require special capabilities, tools

To analyze large quantities of data To access data from multiple systems

Three key techniques

1.Data warehousing 2.Data mining 3.Tools for accessing internal databases through the Web

Management Information Systems

Using Databases to Improve Business Performance and Decision Making

Data warehouse:

Stores current and historical data from many core operational transaction systems Consolidates and standardizes information for use across enterprise, but data cannot be altered Data warehouse system will provide query, analysis, and reporting tools Subset of data warehouse Summarized or highly focused portion of firms data for use by specific population of users Typically focuses on single subject or line of business

Data marts:

Management Information Systems

The Database Approach to Data Management

COMPONENTS OF A DATA WAREHOUSE

Management Information Systems

CHAPTER 6: FOUNDATIONS OF BUSINESS INTELLIGENCE: DATABASES AND INFORMATION MANAGEMENT

Using Databases to Improve Business Performance and Decision Making

Business Intelligence:
Tools for consolidating, analyzing, and providing access to vast amounts of data to help users make better business decisions E.g., Harrahs Entertainment analyzes customers to develop gambling profiles and identify most profitable customers Principle tools include:
Software for database query and reporting Online analytical processing (OLAP) Data mining

Management Information Systems

CHAPTER 6: FOUNDATIONS OF BUSINESS INTELLIGENCE: DATABASES AND INFORMATION MANAGEMENT

Using Databases to Improve Business Performance and Decision Making

Online analytical processing (OLAP)

Supports multidimensional data analysis
Viewing data using multiple dimensions Each aspect of information (product, pricing, cost, region, time period) is different dimension E.g., how many washers sold in the East in June compared with other regions?

OLAP enables rapid, online answers to ad hoc queries

Management Information Systems

CHAPTER 6: FOUNDATIONS OF BUSINESS INTELLIGENCE: DATABASES AND INFORMATION MANAGEMENT

The Database Approach to Data Management

MULTIDIMENSIONAL DATA MODEL

FIGURE 6-13

Management Information Systems

Using Databases to Improve Business Performance and Decision Making

Data mining:
More discovery driven than OLAP Finds hidden patterns, relationships in large databases and infers rules to predict future behavior E.g., Finding patterns in customer data for one-to-one marketing campaigns or to identify profitable customers. Types of information obtainable from data mining
Associations Sequences Classification Clustering Forecasting

Management Information Systems

CHAPTER 6: FOUNDATIONS OF BUSINESS INTELLIGENCE: DATABASES AND INFORMATION MANAGEMENT

Using Databases to Improve Business Performance and Decision Making

Predictive analysis
Uses data mining techniques, historical data, and assumptions about future conditions to predict outcomes of events E.g., Probability a customer will respond to an offer

Text mining
Extracts key elements from large unstructured data sets (e.g., stored e-mails)

Management Information Systems

CHAPTER 6: FOUNDATIONS OF BUSINESS INTELLIGENCE: DATABASES AND INFORMATION MANAGEMENT

Using Databases to Improve Business Performance and Decision Making

Web mining
Discovery and analysis of useful patterns and information from WWW
E.g., to understand customer behavior, evaluate effectiveness of Web site, etc.

Web content mining

Knowledge extracted from content of Web pages

Web structure mining

E.g., links to and from Web page

Web usage mining

User interaction data recorded by Web server

Management Information Systems

CHAPTER 6: FOUNDATIONS OF BUSINESS INTELLIGENCE: DATABASES AND INFORMATION MANAGEMENT

Using Databases to Improve Business Performance and Decision Making

Databases and the Web

Many companies use Web to make some internal databases available to customers or partners Typical configuration includes:
Web server Application server/middleware/CGI scripts Database server (hosting DBM)

Advantages of using Web for database access:

Ease of use of browser software Web interface requires few or no changes to database Inexpensive to add Web interface to system

Management Information Systems

The Database Approach to Data Management

Management Information Systems

CHAPTER 6: FOUNDATIONS OF BUSINESS INTELLIGENCE: DATABASES AND INFORMATION MANAGEMENT

Managing Data Resources

Establishing an information policy

Firms rules, procedures, roles for sharing, managing, standardizing data Data administration:
Firm function responsible for specific policies and procedures to manage data

Data governance:
Policies and processes for managing availability, usability, integrity, and security of enterprise data, especially as it relates to government regulations

Database administration:
Defining, organizing, implementing, maintaining database; performed by database design and management group

Management Information Systems

CHAPTER 6: FOUNDATIONS OF BUSINESS INTELLIGENCE: DATABASES AND INFORMATION MANAGEMENT

Managing Data Resources

Ensuring data quality

More than 25% of critical data in Fortune 1000 company 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 once database in operation

Management Information Systems

CHAPTER 6: FOUNDATIONS OF BUSINESS INTELLIGENCE: DATABASES AND INFORMATION MANAGEMENT

Managing Data Resources

Data quality audit:

Structured survey of the accuracy and level of completeness of the data in an information system
Survey samples from data files, or Survey end users for perceptions of quality

Data cleansing

Software to detect and correct data that are incorrect, incomplete, improperly formatted, or redundant Enforces consistency among different sets of data from separate information systems