MANAGEMENT

INFORMATION SYSTEMS

Chapter 8: Accessing Organizational Information Data Warehouse + BP18

Learning Outcomes

Describe the roles and purposes of data warehouses and

data marts in an organization.

Explain the relationship between business intelligence (BI)

and a data warehouse.

Explain the problem associated with BI and describe the

solution to this business problem.

Describe the 3 common forms of data-mining analysis.

Compare tactical, operational, and strategic BI.

Explain the organization-wide benefits of BI.

Describe the 4 categories of BI business benefits.

Data Warehouse

Data warehouse = logical collection of information

gathered from many different operational databases that

supports business analysis activities and decision-

making tasks

Primary purpose of data warehouse = to aggregate

information throughout an organization into a single

repository for decision-making purposes

Data Warehouse Fundamentals

Extraction, Transformation, and Loading (ETL) = 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 warehouse

Data mart = contains subset of data warehouse information

Data Warehouse Fundamentals

Multidimensional Analysis

Data Mining

Databases contain information in a series of two-

dimensional tables

In a data warehouse and data mart, information is

multidimensional; it contains layers of columns and rows

Dimension = particular attribute of information

Cube = representation of multidimensional information

Multidimensional Analysis

Data Mining

Multidimensional Analysis

Data Mining

Data mining = process of analyzing data to extract

information not offered by the raw data alone

To perform data mining users need data-mining tools

Data-mining tool = Uses a variety of techniques to find

patterns and relationships in large volumes of

information and infers rules that predict future behavior

and guide decision making

Information Scrubbing or Cleansing

Organization must maintain high-quality data in data

warehouse

Information cleansing or scrubbing = process that weeds

out and fixes or discards inconsistent, incorrect, or

incomplete information

Contact information in an operational system

Information Cleansing or Scrubbing

Standardizing customer name from operational systems

Information Cleansing or Scrubbing

Information Scrubbing or Cleansing

Information Scrubbing or Cleansing

Business Intelligence

Business intelligence = information that people use to

support their decision-making efforts

Business intelligence = applications and technologies

used to gather, provide access to, and analyze data and

information to support decision-making efforts

Business intelligence = sifting through large amounts of

data, extracting information, and turning that information

into actionable knowledge

Enabling Business Intelligence

Competitive organizations accumulate business

intelligence to gain sustainable competitive advantage

Technology = most significant enabler of business

intelligence

People = manager who is in the field and close to the

customer rather than an analyst rich in data but poor

in experience

Culture = extent to which the BI attitude flourishes in

an organization depends in large part on the

organizations culture

Data Rich, Information Poor

Problem

Businesses face a data explosion as digital images, email

inboxes, and broadband connections doubled by 2010

Amount of data generated is doubling every year

Some believe it will soon double monthly

Solution

Improving the quality of business decisions has a direct

impact on costs and revenue

BI systems and tools results in creating an agile intelligent

enterprise

Business Intelligence

BI enables business users to receive data for analysis that is:

Reliable

Consistent

Understandable

Easily manipulated

Business Intelligence

Operational, Tactical, Strategic BI

Operational, Tactical, Strategic BI

Operational Value of BI

Richard Hackathorn demonstrates the value of operational BI

Shorten latencies so that time frame for opportunistic influences on

customers, suppliers, etc. is faster, more interactive, and better positioned

Data Mining Tools

Data mining = process of analyzing data to extract

information

Data-mining tools = use a variety of techniques to find

patterns and relationships in large volumes of

information

Classification

Estimation

Affinity grouping

Clustering

Data Mining Analysis

Cluster analysis

Association detection

Statistical analysis

Cluster Analysis

Cluster analysis = 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 possible

CRM systems depend on cluster analysis to segment customer information and identify behavioral traits

Association Detection

Association detection = reveals the degree to which variables are related and the nature and frequency of these relationships in the information

Market basket analysis

Statistical Analysis

Statistical analysis = performs such functions as

information correlations, distributions, calculations,

and variance analysis

Forecast = predictions made on the basis of time-series

information

Time-series information = time-stamped information

collected at a particular frequency

Business Benefits of BI

Single point of access to information for all users

BI across organizational departments

Up-to-the-minute information for everyone

Four main categories of benefits:

Quantifiable benefits

Indirectly quantifiable benefits

Unpredictable benefits

Intangible benefits