5.1 © 2007 by Prentice Hall 5 Chapter Foundations of Business Intelligence: Databases and Information Management

5.2 © 2007 by Prentice Hall STUDENT OBJECTIVES Essentials of Business Information Systems Chapter 5 Foundations of Business Intelligence: Databases and Information Management Describe how a relational database organizes data and compare its approach to an object- oriented database. Identify and describe the principles of a database management system. Evaluate tools and technologies for providing information from databases to improve business performance and decision making.

5.3 © 2007 by Prentice Hall Assess the role of information policy and data administration in the management of organizational data resources. Assess the importance of data quality assurance for the business. STUDENT OBJECTIVES (Continued) Essentials of Business Information Systems Chapter 5 Foundations of Business Intelligence: Databases and Information Management

5.4 © 2007 by Prentice Hall 7-Eleven Stores Ask the Customer by Asking the Data Problem: Detached view of customer base, inadequate sales data. Solutions: Implement retail information system and database and deploy POS workstations to analyze customer preferences and analyze sales trends. HP servers and Retail Information System leads to reduced inventory and increased sales revenue. Demonstrates IT’s role in establishing customer intimacy and managing inventory. Illustrates digital technology’s role in forging success in business from data harvesting. Essentials of Business Information Systems Chapter 5 Foundations of Business Intelligence: Databases and Information Management

5.5 © 2007 by Prentice Hall What are your experiences with shopping at your local convenience store? Does the store ever run out of your favorite items? If so, how quickly are they replaced? Does the store proprietor have a relationship with his or her customers? Are you aware of purchase data being collected? Are you more or less likely to shop at a convenience store when you know that your purchase data are being collected? Are you more or less likely to frequent a store that caters to your personal buying habits? Interactive Session: 7-Eleven 7-Eleven Stores Ask the Customer by Asking the Data Essentials of Business Information Systems Chapter 5 Foundations of Business Intelligence: Databases and Information Management

5.6 © 2007 by Prentice Hall The Database Approach to Data Management Database: a collection of related files containing records on people, places, or things Entities and attributes Organizing data in a relational database Fields, records, key fields, primary key, foreign key Establishing relationships Entity-relationship diagram, normalization, join table Essentials of Business Information Systems Chapter 5 Foundations of Business Intelligence: Databases and Information Management

5.7 © 2007 by Prentice Hall A Relational Database Table Figure 5-1 A relational database organizes data in the form of two-dimensional tables. Illustrated here is a table for the entity SUPPLIER showing how it represents the entity and its attributes. Supplier_Number is the key field. The Database Approach to Data Management Essentials of Business Information Systems Chapter 5 Foundations of Business Intelligence: Databases and Information Management

5.8 © 2007 by Prentice Hall Normalized Database Design Normalized Database Design Figure 5-5 The Database Approach to Data Management Essentials of Business Information Systems Chapter 5 Foundations of Business Intelligence: Databases and Information Management

5.9 © 2007 by Prentice Hall Example Entity-Relationship Diagram Figure 5-6 The Database Approach to Data Management Essentials of Business Information Systems Chapter 5 Foundations of Business Intelligence: Databases and Information Management

5.10 © 2007 by Prentice Hall A specific type of software for creating, storing, organizing, and accessing data from a database Separates the logical and physical views of the data Logical view: how end users view data Physical view: how data are actually structured and organized Examples of DBMS: Microsoft Access, DB2, Oracle Database, Microsoft SQL Server, MYSQL DBMS Database Management Systems Essentials of Business Information Systems Chapter 5 Foundations of Business Intelligence: Databases and Information Management

5.11 © 2007 by Prentice Hall Operations of a Relational DBMS Select: creates a subset of records based on stated criteria Join: combines relational tables to present the user with more information than is available from individual tables Project: creates a subset consisting of columns in a table Database Management Systems Essentials of Business Information Systems Chapter 5 Foundations of Business Intelligence: Databases and Information Management

5.12 © 2007 by Prentice Hall Capabilities of Database Management Systems Data definition Data dictionary Querying and reporting Data manipulation language Structured query language (SQL) Object-oriented databases Database Management Systems Essentials of Business Information Systems Chapter 5 Foundations of Business Intelligence: Databases and Information Management

5.13 © 2007 by Prentice Hall Data Warehouses Using Databases to Improve Business Performance and Decision Making What is a data warehouse? A database that stores current and historical data that may be of interest to decision makers Data marts Subsets of data warehouses that are highly focused and isolated for a specific population of users Essentials of Business Information Systems Chapter 5 Foundations of Business Intelligence: Databases and Information Management

5.14 © 2007 by Prentice Hall Components of a Data Warehouse Figure 5-13 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 warehouse. Essentials of Business Information Systems Chapter 5 Foundations of Business Intelligence: Databases and Information Management Using Databases to Improve Business Performance and Decision Making

5.15 © 2007 by Prentice Hall Business intelligence: tools for consolidating, analyzing, and providing access to large amounts of data to improve decision making Online analytical processing (OLAP) Data mining and predictive analysis Associations Sequences Classifications Clusters Forecasts Business Intelligence, Multidimensional Data Analysis, and Data Mining Using Databases to Improve Business Performance and Decision Making Essentials of Business Information Systems Chapter 5 Foundations of Business Intelligence: Databases and Information Management

5.16 © 2007 by Prentice Hall Using Databases to Improve Business Performance and Decision Making Essentials of Business Information Systems Chapter 5 Foundations of Business Intelligence: Databases and Information Management Figure 5-14 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

5.17 © 2007 by Prentice Hall Peru’s Banco de Credito Scores with a New Data Warehouse Using Databases to Improve Business Performance and Decision Making Essentials of Business Information Systems Chapter 5 Foundations of Business Intelligence: Databases and Information Management Read the Focus on Organizations and then discuss the following questions: What problems does Banco de Credito Peru face? How do the problems affect the bank’s strategy and business performance? How did management choose to solve these problems? Analyze the people, organization, and technology dimensions of its solution. What alternatives were available to management? Did management choose the best alternative? Explain your answer.

5.18 © 2007 by Prentice Hall Firms use the Web to make information from their internal databases available to customers and partners Middleware and other software make this possible Database servers CGI Web interfaces provide familiarity to users and savings over redesigning and rebuilding legacy systems Databases and the Web Using Databases to Improve Business Performance and Decision Making Essentials of Business Information Systems Chapter 5 Foundations of Business Intelligence: Databases and Information Management

5.19 © 2007 by Prentice Hall Establishing an Information Policy Managing Data Resources An information policy states an organization’s rules for managing and storing information Data administration is responsible for the specific policies and procedures through which data can be managed as a resource Large organizations use a database design and management group to perform database administration Essentials of Business Information Systems Chapter 5 Foundations of Business Intelligence: Databases and Information Management

5.20 © 2007 by Prentice Hall Ensuring Data Quality Poor data quality is a major obstacle to successful customer relationship management Data quality problems can be caused by redundant and inconsistent data produced by multiple systems Data input errors are the cause of many data quality problems A data quality audit is a structured survey of the accuracy and completeness of data Data cleansing detects and corrects incorrect, incomplete, improperly formatted, and redundant data Managing Data Resources Essentials of Business Information Systems Chapter 5 Foundations of Business Intelligence: Databases and Information Management

5.21 © 2007 by Prentice Hall Read the Focus on Technology and then discuss the following questions: What data management and data quality problems are posed by digital music services? What is the impact of these problems on individuals and the digital music industry? What people, organization, and technology factors were involved? What alternative solutions are available? Downloading Digital Music—When You’re on the Wrong Track Managing Data Resources Essentials of Business Information Systems Chapter 5 Foundations of Business Intelligence: Databases and Information Management

5.22 © 2007 by Prentice Hall What experiences have you had with bad data in relation to digital music? Visit the Gracenote Web site at and search the music database for a few of your favorite songs and artists. Are you able to find any bad or conflicting data? How concerned are you with having correct metadata for your digital music? What steps do you take to protect the quality of your metadata? Interactive Session: Downloading Digital Music Managing Data Resources Essentials of Business Information Systems Chapter 5 Foundations of Business Intelligence: Databases and Information Management