CHAPTER 6 "Foundations of Business Intelligence: Databases and Information Management"
6.1 Organizing Data in A Traditional File Environment
You might be surprised to learn that many businesses don’t have timely, accurate, or relevant information because the data in their information systems have been poorly organized and maintained. That’s why data management is so essential.File Organization Terms and Concepts
A grouping of characters into a word, a group of words, or a complete number is
called a field. A group of related fields,
such as the student’s name, the course taken the date, and the grade, comprises a record; a group of records of the
same type is called a file. A group of related files makes up a database. A record describes an entity. An entity is a person, place, thing,
or event on which we store and maintain information. Each characteristic or
quality describing a particular entity is called an attribute.
Problems With The Traditional File Environment
In most organizations, systems tended to grow independently
without a company-wide plan. Accounting, finance, manufacturing, human
resources, and sales and marketing all developed their own systems and data
files. Each application, of course, required its own files and its own
computer program to operate. The organization is saddled with hundreds of programs and applications that are very difficult to
maintain and manage. The resulting problems are data redundancy and
inconsistency, program-data dependence, inflexibility, poor data security, and an
inability to share data among applications.
6.2 The Database Approach to Data Management
Database is a
collection of data organized to serve many applications efficiently by centralizing
the data and controlling redundant data. A single database services multiple applications.
Database Management Systems
A database management system
(DBMS) is software that permits an organization to centralize data, manage them efficiently, and
provide access to the stored data by application programs. The DBMS acts as an
interface between application programs and the physical data
files. The database management software makes the physical database
available for different logical views required by users.
Capabilities of Databases Management Systems
A DBMS includes capabilities and tools for organizing, managing,
and accessing the data in the database. DBMS have a data definition capability
to specify the structure of the content of the database. This information about
the database would be documented in a data dictionary. A data dictionary is
an automated or manual file that stores definitions of data elements and their
characteristics.
Designing Databases
To create a database, you must understand the relationships among
the data, the type of data that will be maintained in the database, how the
data will be used, and how the organization will need to change to manage data
from a company-wide perspective. The database requires both a conceptual design
and a physical design. The conceptual, or logical, design of a database is an
abstract model of the database from a business perspective, whereas the
physical design shows how the database is actually arranged on direct-access
storage devices.
6.3 Using Databases to Improve Business Performance and Decision Making
Businesses use their databases to keep track of basic
transactions, such as paying suppliers, processing orders, keeping track of customers,
and paying employees. But they also need databases to provide information that
will help the company run the business more efficiently, and help managers and
employees make better decisions. special
capabilities and tools are required for analyzing vast quantities of data and
for accessing data from multiple systems. These capabilities include data
warehousing, data mining, and tools for accessing internal databases through
the Web.
Data Warehouses
A data warehouse is a database that stores current and historical data of potential
interest to decision makers throughout the company. The data warehouse
consolidates and standardizes information from different operational databases
so that the information can be used across the enterprise for management
analysis and decision making. A data
mart is a subset of a data
warehouse in which a summarized or highly focused portion of the organization’s
data is placed in a separate database for a specific population of users.
Tools for Business Intelligence: Multidimensional Data Analysis and Data Mining
Once data have been captured and organized in data warehouses and
data marts, they are available for further analysis using tools for business
intelligence, Business intelligence tools enable users to analyze data to see
new patterns, relationships, and insights that are useful for guiding decision
making. This section will introduce you to these tools.
Online Analytical Processing (OLAP)
OLAP supports multidimensional data analysis, enabling users to view
the same data in different ways using multiple dimensions.
Data Mining
Data mining is more discovery-driven. Data mining provides insights into corporate
data that cannot be obtained with OLAP by finding hidden patterns and relationships
in large databases and inferring rules from them to predict future behavior. The types of information obtainable from data mining
include associations, sequences, classifications, clusters, and forecasts.
Text Mining and Web Mining
Text mining tools are now available to help businesses analyze these data.
These tools are able to extract key elements from large unstructured data sets,
discover patterns and relationships, and summarize the information. The
discovery and analysis of useful patterns and information from the World Wide Web is called Web mining.
Databases and The Web
Many companies now use the Web to make some of the information in
their internal databases available to customers and business partners. Because
many back-end databases cannot interpret commands written in HTML, the Web
server passes these requests for data to software that translates HTML commands
into SQL so that they can be processed by the DBMS working with the database.
In a client/server environment, the DBMS resides on a dedicated computer called
a database server.
6.4 Managing Data Resources
In order to make sure that the data for your business remain
accurate, reliable, and readily available to those who need it, your business
will need special policies and procedures for data management.
Establishing an Information Policy
An information policy specifies the organization’s rules for sharing, disseminating,
acquiring, standardizing, classifying, and inventorying information. In a large
organization, managing and planning for information as a corporate resource
often requires a formal data administration function. Data administration is
responsible for the specific policies and procedures through which data can be
managed as an organizational resource. Data governance deals with the policies
and processes for managing the availability, usability, integrity, and security
of the data employed in an enterprise, with special emphasis on promoting
privacy, security, data quality, and compliance with government regulations.
Ensuring Data Quality
Analysis of data quality often begins with a data quality audit,
which is a structured survey of the accuracy and level of completeness of the data in
an information system. Data
cleansing, also known as data scrubbing, consists of activities for
detecting and correcting
data in a database that are incorrect, incomplete, improperly formatted, or
redundant. Data cleansing not only corrects errors but also enforces
consistency among different sets of data that originated in separate information systems.
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source: "Management Information System" e-book, 12th edition, written by Kenneth C. Laudon and Jane P. Laudon.