Essentials of Management Information Systems

Chapter 5 Foundations of Business Intelligence: Databases and

Information Management

Essentials of Management Information Systems

Chapter 5 Foundations of Business Intelligence: Databases and
Information Management
Using Databases to Improve Business Performance and
Decision Making

Database

Adatabaseis an organized collection ofdata

For example, modeling the availability of rooms in
hotels in a way that supports finding a hotel with
vacancies.
Database management systems(DBMSs) are
specially designed software applications that interact
with the user, other applications, and the database itself
to capture and analyze data.
Well-known DBMSs include
MySQL,MariaDB,PostgreSQL,SQLite,Microsoft
SQL
Server,Oracle,SAP
HANA,dBASE,FoxPro,IBM
DB2,LibreOffice
BaseandFileMaker Pro

Essentials of Management Information Systems

Chapter 5 Foundations of Business Intelligence: Databases and
Information Management
Using Databases to Improve Business Performance and
Decision Making

Multidimensional Data Model

A company selling four different

products nuts, bolts, washers, and
screws in the East, West, and
Central regions might want to
know actual sales by product for
each region and might also want to
compare them with projected
sales. This analysis requires a
multidimensional view of data.

Essentials of Management Information Systems

Chapter 5 Foundations of Business Intelligence: Databases and
Information Management
Using Databases to Improve Business Performance and
Decision Making

Multidimensional Data Model

Each aspect of information product,

pricing, cost, region, or time period
represents a different dimension. So, a
product
manager
could
use
a
multidimensional data analysis tool to
learn how many washers were sold in
the East in June, how that compares
with the previous month and the
previous June, and how it compares with
the sales forecast.

Essentials of Management Information Systems

Chapter 5 Foundations of Business Intelligence: Databases and
Information Management
Using Databases to Improve Business Performance and
Decision Making

Multidimensional Data Model

A specialized multidimensional database or a tool that

creates multidimensional views of data in relational
databases.
Another term for multidimensional data analysis is
online analytical processing (OLAP).
A multidimensional model that could be created to
represent products, regions, actual sales, and projected
sales.
A matrix of actual sales can be stacked on top of a
matrix of projected sales to form a cube with six faces.

Essentials of Management Information Systems

Chapter 5 Foundations of Business Intelligence: Databases and
Information Management
Using Databases to Improve Business Performance and
Decision Making

Multidimensional Data Model

The view that is
showing is product
versus region.
If
you rotate the cube
90
degrees,
the
face that will show
is product versus
actual
and
projected sales. If
you rotate the cube
90 degrees again,
you will see region
versus actual and
projected
sales.
Other
views
are
possible.

Essentials of Management Information Systems

Chapter 5 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, enabling

users to view the same data in different ways using
multiple dimensions

Each aspect of informationproduct, pricing, cost,

region, or time periodrepresents a different
dimension
E.g., comparing sales in East in June versus May and
July

Essentials of Management Information Systems

Chapter 5 Foundations of Business Intelligence: Databases and
Information Management
Using Databases to Improve Business Performance and
Decision Making

Online Analytical Processing (OLAP)

OLAP tools enable users to analyze multidimensional data

interactively from multiple perspectives.

OLAP consists of three basic analytical operations:

consolidation (roll-up),

drill-down, and

slicing and dicing.

They
borrow
aspects
databasesandrelational databases.

ofhierarchical

Essentials of Management Information Systems

Chapter 5 Foundations of Business Intelligence: Databases and
Information Management
Using Databases to Improve Business Performance and
Decision Making

Online Analytical Processing (OLAP)

Three basic analytical operations

Consolidation involves the aggregation of data that can be

accumulated and computed in one or more dimensions.

the drill-down is a technique that allows users to navigate

through the details.

For Example - all sales offices are rolled up to the

sales department or sales division to anticipate sales
trends.

For Example - users can view the sales by individual

products that make up a regions sales.

Slicing and dicing is users can take out (slicing) a specific

set of data of theOLAP cubeand view (dicing) the slices

Essentials of Management Information Systems

Chapter 5 Foundations of Business Intelligence: Databases and
Information Management
Using Databases to Improve Business Performance and
Decision Making

Data Warehouses

Data warehouse:

"Subject-Oriented, Integrated, Time-Variant, Nonvolatile collection of data in support of decision

making".
It is adatabaseused forreportingand data analysis.
Integrating data from one or more disparate sources
creates a central repository of data,
The data originate in many core operational systems
and external sources, including Web site transactions.
The data are copied into the data warehouse database
as often as neededhourly, daily, weekly, monthly.

Essentials of Management Information Systems

Chapter 5 Foundations of Business Intelligence: Databases and
Information Management
Using Databases to Improve Business Performance and
Decision Making

Data Warehouses

Data warehouse:

The data are standardized into a common data model

and consolidated
Data can be accessed but not altered.
Database that stores current and historical data that
may be of interest to decision makers
The data stored in the warehouse isuploadedfrom the
operational systems (such as marketing, sales, etc.,).

Essentials of Management Information Systems

Chapter 5 Foundations of Business Intelligence: Databases and
Information Management
Using Databases to Improve Business Performance and
Decision Making

Components of a Data Warehouse Warehouse

The data warehouse
extracts current and
historical data from
multiple
operational
systems
inside
the
organization.
These
data
are
combined
with
data
from
external sources and
reorganized
into
a
central
database
designed
for
management
reporting
and
analysis.
The
information directory
provides users with
information about the
data available in the

Information
Delivery
System

Souring
Acquisition
Cleanup and
Transformatio
n Tool

Meta Data

Access Tool

Essentials of Management Information Systems

Chapter 5 Foundations of Business Intelligence: Databases and
Information Management
Using Databases to Improve Business Performance and
Decision Making

Data Warehouses

Data mart:

Enterprise-wide data warehouses where a central data

warehouse serves the entire organization
They can create smaller, decentralized warehouses
called data marts.
A data mart is a subset of a data warehouse.
Focused on a specific area of interest.
Alternatively, an organization can create one or more
data marts as first steps towards a larger and more
complex enterprise data warehouse.

Essentials of Management Information Systems

Chapter 5 Foundations of Business Intelligence: Databases and
Information Management
Using Databases to Improve Business Performance and
Decision Making

Data Warehouses

Data mart:

Subset of data warehouses that is highly focused and

isolated for a specific population of users
Complexity, costs, and management problems will
arise if an organization creates too many data marts

Essentials of Management Information Systems

Chapter 5 Foundations of Business Intelligence: Databases and
Information Management
Using Databases to Improve Business Performance and
Decision Making

Data Warehouses Framework

Data
MArt

Applicatio
n

Data
warehou
se
Operation
al Data

Essentials of Management Information Systems

Chapter 5 Foundations of Business Intelligence: Databases and
Information Management
Using Databases to Improve Business Performance and
Decision Making

Benefits of a data warehouse

Congregate data from multiple sources into a single

database so a single query engine can be used to
present data.
Maintain data history, even if the source transaction
systems do not.
Integrate data from multiple source systems, enabling
a central view across the enterprise.
This benefit is always valuable, but particularly so
when the organization has grown by merger.
Improvedata quality, by providing consistent codes
and descriptions, flagging or even fixing bad data.
Present the organization's information consistently.

Essentials of Management Information Systems

Chapter 5 Foundations of Business Intelligence: Databases and
Information Management
Using Databases to Improve Business Performance and
Decision Making

Data Mining

Data mining is the practice of automatically

searching large stores of data
Discover patterns and trends that go beyond
simple analysis.
Data mining uses sophisticated mathematical
algorithms to segment the data and evaluate
the probability of future events.
Data mining is also known as Knowledge
Discovery in Data (KDD).

Essentials of Management Information Systems

Chapter 5 Foundations of Business Intelligence: Databases and
Information Management
Using Databases to Improve Business Performance and
Decision Making

Data Mining

Finds hidden patterns and relationships in

large databases and infers rules from them
to predict future behavior
Types of information obtainable from data
mining
Associations: occurrences linked to single event
Sequences: events linked over time
Classifications: patterns describing a group an item
belongs to
Clusters: discovering as yet unclassified groupings
Forecasting: uses series of values to forecast future
values

Essentials of Management Information Systems

Chapter 5 Foundations of Business Intelligence: Databases and
Information Management
Using Databases to Improve Business Performance and
Decision Making

Data Mining

The key properties of data mining are:

Automatic discovery of patterns
Prediction of likely outcomes
Creation of actionable information
Focus on large data sets and databases

Essentials of Management Information Systems

Chapter 5 Foundations of Business Intelligence: Databases and
Information Management
Using Databases to Improve Business Performance and
Decision Making

Text Mining

Unstructured data (mostly text files) accounts for

80 percent of an organizations useful information.
Text mining allows businesses to extract key
elements from, discover patterns in, and
summarize large unstructured data sets.

Web Mining

Discovery and analysis of useful patterns and

information from the Web
Content mining, structure mining, usage mining

Essentials of Management Information Systems

Chapter 5 Foundations of Business Intelligence: Databases and
Information Management
Using Databases to Improve Business Performance and
Decision Making

Data Mining

Database, Data warehouse

Collection of data

Database
Server

/Warehouse

Fetch Data

Knowledge Base

Domain knowledge to help

search engine

Data Mining engine

Set of functional modules

such
as
characterization,
association,
classification,

Essentials of Management Information Systems

Chapter 5 Foundations of Business Intelligence: Databases and
Information Management
Using Databases to Improve Business Performance and
Decision Making

Data Mining

Pattern evaluation

Interestingness
measures

Database
Server

/Warehouse

Fetch Data

GUI

User Interaction

Essentials of Management Information Systems

Chapter 5 Foundations of Business Intelligence: Databases and
Information Management
Using Databases to Improve Business Performance and
Decision Making

Data Mining

One popular use of data mining: analyzing

patterns in customer data for one-to-one marketing
campaigns or for identifying profitable customers
Predictive analysis:
Uses data mining techniques, historical data, and
assumptions about future conditions to predict
outcomes of events, such as the probability a
customer will respond to an offer or purchase a
specific product
Data mining versus privacy concerns
Used to create detailed data image about each
individual

Essentials of Management Information Systems

Chapter 5 Foundations of Business Intelligence: Databases and
Information Management
Using Databases to Improve Business Performance and
Decision Making

Data Mining Uses

Games

Pattern mining

Business

Subject-based data
mining

Science
engineering

and

Human rights
Medical
mining

data

Spatial data mining

Visual data mining
Music data mining

BUSINESS INTELLIGENCE

Business Intelligence (BI) applications are

decision support tools that enable real-time,
interactive access, analysis and manipulation of
mission-critical corporate information.
Business intelligence: tools for consolidating,
analyzing, and providing access to large amounts
of data to improve decision making

THE GOALS FOR BUSINESS

INTELLIGENCE

Support internal enterprise users in the

assessment, enhancement and optimization of
organizational performance & operation.
Deliver critical business information to end-users
about value chain constituencies such as
customers and supply-chain partners.
End-users can utilize the BI tools to "drill-down"
and "slice and dice" to gain a better
understanding of transactional and operational
information; for example, Star Schema and OLAP
are usually used for provide this functionality.

BUSINESS INTELLIGENCE

A series of analytical
tools works with data
stored in databases to
find patterns and
insights for helping
managers and
employees make better
decisions to improve
organizational
performance.

BUSINESS INTELLIGENCE
BI Technologies

Customer
Marketing
Data Mart

Inventory

Credit

Sales

ETL
tools

Data
Warehouse

BI

Reports

Distribution
Data Mart

Operation

External

Operational Data

Finance
Data Mart

OLAP

Pivot Table

Extraction
Transformation
and Loading

Database

BUSINESS INTELLIGENCE

Operational Data Source:

ETL tools (Extract, Transform, Load)

collects data from various sources including operation

database, OLTP, ERP, legacy apps, external database and
etc.
used to pull data from source database, transform the
data so that it is compatible with the data warehouse and
then load it into data warehouse.

A Data Warehouse
A data mart
OLAP

BUSINESS INTELLIGENCE

Pivot Table and Reports

A pivot table is a great reporting tool that allows for slicing and
dicing data.

BUSINESS INTELLIGENCE BENEFITS