Foundations of Business Intelligence: Databases and Information Management

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Foundations of Business Intelligence Databases
and Information Management
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Management Information Systems Chapter 6
Foundations of Business Intelligence Databases
and Information Management
LEARNING OBJECTIVES

• Describe basic file organization concepts and the
  problems of managing data resources in a
  traditional file environment.
• Describe the principles of a database management
  system and the features of a relational database.
• Apply important database design principles.

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and Information Management
LEARNING OBJECTIVES (contd)

• Evaluate tools and technologies for providing
  information from databases to improve business
  performance and decision making.
• Assess the role of information policy, data
  administration, and data quality assurance in the
  management of organizational data resources.

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Nascar Races to Manage Its Data

• Problem Gaining knowledge of customers and
  making effective use of fragmented customer data.
• Solutions Use relational database technology to
  increase revenue and productivity.
• Data access rules and a comprehensive customer
  database consolidate customer data.
• Demonstrates ITs role in creating customer
  intimacy and stabilizing infrastructure.
• Illustrates digital technologys role in
  standardizing how data from disparate sources are
  stored, organized, and managed.

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Organizing Data in a Traditional File Environment

• File organization concepts
• Problems with the traditional file environment
• Data redundancy and inconsistency
• Program-data dependence
• Lack of flexibility
• Poor security
• Lack of data sharing and availability

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Management Information Systems Chapter 6
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Organizing Data in a Traditional File Environment

• File organization concepts
• Information is becoming as important a business
  resource as money, material, and people.
• Even though a company compiles millions of pieces
  of data doesnt mean it can produce information
  that its employees, suppliers, and customers can
  use.
• Businesses are realizing the competitive
  advantage they can gain by compiling useful
  information, not just data.

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Management Information Systems Chapter 6
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and Information Management
Organizing Data in a Traditional File Environment

• File organization concepts
• Its almost inevitable that someday youll be
  establishing or at least working with a database
  of some kind.
• As with anything else, understanding the lingo is
  the first step to understanding the whole concept
  of managing and maintaining information.
• It all comes down to turning data into useful
  information, not just a bunch of bits and bytes.

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Management Information Systems Chapter 6
Foundations of Business Intelligence Databases
and Information Management
Organizing Data in a Traditional File Environment

• File organization concepts
• Its almost inevitable that someday youll be
  establishing or at least working with a database
  of some kind.
• As with anything else, understanding the lingo is
  the first step to understanding the whole concept
  of managing and maintaining information.
• It all comes down to turning data into useful
  information, not just a bunch of bits and bytes.

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Management Information Systems Chapter 6
Foundations of Business Intelligence Databases
and Information Management
Organizing Data in a Traditional File Environment
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Management Information Systems Chapter 6
Foundations of Business Intelligence Databases
and Information Management
Organizing Data in a Traditional File Environment

• File organization concepts
• An entity is basically the person, place, thing,
  or event on which we maintain information. Each
  characteristic or quality describing an entity is
  called an attribute.

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Organizing Data in a Traditional File Environment
Traditional File Processing
The use of a traditional approach to file
processing encourages each functional area in a
corporation to develop specialized applications
and files. Each application requires a unique
data file that is likely to be a subset of the
master file. These subsets of the master file
lead to data redundancy and inconsistency,
processing inflexibility, and wasted storage
resources.
Figure 6-2
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Management Information Systems Chapter 6
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Organizing Data in a Traditional File Environment

• Problems with the traditional file
• Many problems such as data redundancy, data
  inconsistency, program-data dependence,
  inflexibility, poor data security, and of data
  sharing and availability among applications have
  occurred with traditional file environments.

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and Information Management
Organizing Data in a Traditional File Environment

• Problems with the traditional file
• Data Redundancy and Inconsistency
• Weve spoken about islands of information
  before. Building and maintaining databases is
  where this situation is most evident and most
  troublesome. Usually it begins in all innocence,
  but it can quickly grow to monstrous proportions.

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Organizing Data in a Traditional File Environment

• Problems with the traditional file
• For instance, after you move and change
  addresses, you notify everyone of your new
  address including your bank. Everything is going
  smoothly with your monthly statements. All of a
  sudden, at the end of the year, the bank sends a
  Christmas card to your old address. Why?
• Because your new address was changed in one
  database, but the bank maintains a separate
  database for its Christmas card list and your
  address was never changed in it.

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Organizing Data in a Traditional File Environment

• Problems with the traditional file
• If you received two Christmas cards, youre
  probably a victim of data redundancy. That is,
  your information is now in two separate databases
  with duplicate records.
• It is easy to see that the problem with data
  redundancy is that it wastes storage resources.
  Another problem with data redundancy is that it
  will also lead to data inconsistency. In the
  Christmas card example illustrated above, the
  address field in the two databases has two
  different values.

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Organizing Data in a Traditional File Environment

• Problems with the traditional file
• Program-Data Dependence
• Even more troublesome is when several departments
  or individuals decide to set up their own islands
  of information. This usually happens because they
  find the main system inflexible or it just
  doesnt fit their needs.
• So they set up their own fields and records and
  files and use them in their own programs to
  manipulate data according to their needs. Now
  each department maintaining islands of
  information because of program-data dependence.

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Organizing Data in a Traditional File Environment

• Problems with the traditional file
• Program-Data Dependence
• Taking this problem even further, the fields and
  records for marketing probably dont have the
  same structure and meaning as the fields and
  records for accounting, or those for production.
• Each record describes basically the same entity
  (customers or products), but it is very possible
  that each database file will have different
  information, or attributes, in records concerning
  the same entity.

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Organizing Data in a Traditional File Environment

• Problems with the traditional file
• Lack of Flexibility
• A traditional file system can deliver routine
  scheduled reports after extensive programming
  efforts, but it cannot deliver ad hoc reports or
  respond to unanticipated information requirements
  in a timely fashion.
• To send Christmas cards to every person in the
  database would be programmed and easily executed.
  However, lets assume that you only want to send
  Christmas cards out to individuals who are 55
  years old and live in Liverpool. This ad hoc
  request will not be easy to retrieve.

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Organizing Data in a Traditional File Environment

• Problems with the traditional file
• Poor Security
• Because there is little control or management of
  data, access to and dissemination of information
  may be out of control.
• Management may have no way of knowing who is
  accessing or even making changes to the
  organizations data.

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Organizing Data in a Traditional File Environment

• Problems with the traditional file
• Lack of Data Sharing and Availability
• For example, assume that the marketing department
  has a promotional program whereby all individuals
  placing an order last month of 1,000 or more are
  issued a 50 gift card on their next purchase.
• After placing their order, the customer later
  returns the product and the accounting department
  issues them a full credit. If the marketing
  department maintains their own customer sales
  database, then they would have no way of knowing
  that the customer returned the product.

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The Database Approach to Data Management

• The Database Approach to Data Management
• The key to establishing an effective, efficient
  database is to involve the entire organization as
  much as possible, even if everyone will not
  immediately be connected to it or use it. Perhaps
  they wont be a part of it in the beginning, but
  they very well could be later on.

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The Database Approach to Data Management

• A database management system (DMBS) 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.

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Physical views of items are often different from
the logical views of the same items when they are
actually being used. The physical view of data
focuses on where the data are actually stored in
the record or in a file. The physical view is
important to programmers who must manipulate the
data as they are physically stored in the
database. The logical view is concerned with the
way you can use the data not how it is stored.
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The Database Approach to Data Management
Physical views of items are often different from
the logical views of the same items when they are
actually being used. The physical view of data
focuses on where the data are actually stored in
the record or in a file. The physical view is
important to programmers who must manipulate the
data as they are physically stored in the
database. The logical view is concerned with the
way you can use the data not how it is stored.
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Does it really matter to the user that the
customer address is physically stored on the disk
before the customer name? Probably not.
However, when users create a report of
customers located in Liverpool, they generally
will list the customer name first and then the
address. So its more important to the end user
to bring the data from its physical location on
the storage device to a logical view in the
output device, whether screen or paper.
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How a DBMS Solves the Problems of the Traditional
File Environment A DBMS reduces data redundancy
and inconsistency by minimizing isolated files in
which the same data are repeated. A DBMS
eliminates data inconsistency because the DBMS
can help the organization ensure that every
occurrence of redundant data has the same values.
The DBMS enables the organization to centrally
manage data, their use, and security.
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Relational DBMS The most popular type of DBMS
today for PCs as well as for larger computers and
mainframes is the relational DBMS. A relational
DBMS uses tables in which data are stored to
extract and combine data in whatever form or
format the user needs. The tables are sometimes
called files, although that is actually a
misnomer, since you can have multiple tables in
one file.
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Relational DBMS Suppose you decide to create a
database for your newspaper delivery business. In
order to succeed, you need to keep accurate,
useful information for each of your customers.
You set up a database to maintain the
information. The actual information about a
single customer resides in a table called a row.
Rows are commonly referred to as records, or in a
very technical term, a tuple.
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Relational DBMS For each customer, you create a
record. Within each record you have the following
fields customer name, address, ID, date last
paid. Smith, Jones, and Brooks are the records
within a file you decide to call Paper
Delivery. The entities then are Smith, Jones,
and Brooks, the people about whom you are
maintaining information. The attributes are
customer name, address, ID, and date last paid.
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Relational DBMS Each record requires a key
field, or unique identifier. The key field in
this file is the ID number perhaps youll use
phone number because it will be unique for each
record. This is a very simplistic example of a
database, but it should help you understand the
terminology.
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Relational DBMS In a relational database, each
table contains a primary key, a unique identifier
for each record. To make sure the tables relate
to each other, the primary key from one table is
stored in a related table as a secondary key.
For instance, in the customer table the primary
key is the unique customer ID. That primary key
is then stored in the order table as the
secondary key so that the two tables have a
direct relationship.
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Relational DBMS
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The Database Approach to Data Management
Relational DBMS
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Operations of a Relational DBMS Relational
database tables can be combined to deliver data
required by users, provided that any two tables
share a common data element. Use these three
basic operations to develop relational
databases Select Create a subset of records
meeting the stated criteria. Join Combine
related tables to provide more information than
individual tables. Project Create a new table
from subsets of previous tables.
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Hierarchical and Network DBMS The hierarchical
DBMS presents data to users in a treelike
structure. Think of a mother and her children. A
child only has one mother and inherits some of
her characteristics, such as eye color or hair
color. A mother might have one or more children
to whom she passes some of her characteristics
but usually not exact ones. The child then goes
on to develop her own characteristics separate
from the mother.
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Hierarchical and Network DBMS In a hierarchical
database, characteristics from the parent are
passed to the child by a pointer, just as a human
mother will have a genetic connection to each
human child. You can demonstrate this concept to
students by showing them how this database
pointer works by illustrating the simple
hierarchy illustrated below.
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Hierarchical and Network DBMS
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Hierarchical and Network DBMS A network data
model is a variation of the hierarchical model.
Take the same scenario with one parent and many
children and add a father and perhaps a couple of
stepparents. Now the parents arent restricted
to only one (the mother), but to many parents.
That is, a parent can have many children and a
child can have many parents. The parents pass on
certain characteristics to the children, but the
children also have their own distinct
characteristics.
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Hierarchical and Network DBMS
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Hierarchical and Network DBMS As with
hierarchical structures, each relationship in a
network database must have a pointer from all the
parents to all the children and back, as this
figure demonstrates. These two types of
databases, the hierarchical and the network, work
well together because they can easily pass data
back and forth.
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Hierarchical and Network DBMS But these
structures are not easily manipulated and require
extensive technical programming to meet changing
requirements. Because they are difficult to
build in the first place, some businesses are
hesitant to replace them with newer relational
data models. They are referred to as legacy
systems systems that continue to be used
because of the high cost of replacing them.
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Object-Oriented Databases Many companies are
moving away from strictly text-based database
systems. Data as objects can be pictures, groups
of text, voice, and audio. Object-oriented
databases bring the various objects from many
different sources and get them working together.
If you combine the capabilities of a relational
DBMS and an object-oriented database, you create
an object-relational DBMS.
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Capabilities Of Database Management Systems A
Database Management System (DBMS) is basically
another software program like Word or Excel or
e-mail. This type of software is more
complicated it permits an organization to
centralize data, manage them efficiently, and
provide access to the stored data by application
programs. A DBMS has three components, all of
them important for the long-term success of the
system.
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Capabilities Of Database Management Systems
Data definition language. Marketing looks at
customer addresses differently from Shipping, so
you must make sure that all database users are
speaking the same language. It becomes critical
to involve users in the development of the data
definition language.
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Capabilities Of Database Management Systems
Data dictionary. Each data element or field
should be carefully analyzed when the database is
first built or as the elements are later added.
Determine what each element will be used for,
who will be the primary user, and how it fits
into the overall scheme of things. Then write it
all down and make it easily available to all
users. This is one of the most important steps in
creating a good database.
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Querying and Reporting Data manipulation
language. This is a formal language programmers
use to manipulate the data in the database and
make sure they are formulated into useful
information. The goal of this language should
be to make it easy for users. The basic idea is
to establish a single data element that can serve
multiple users in different departments,
depending on the situation.
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Querying and Reporting Data manipulation
language. Data manipulation languages are
getting easier to use and more prevalent. SQL
(Structured Query Language) is the most prominent
language and is now embedded in desktop
applications such as Microsoft Access. Because
SQL is becoming a popular, easy method of
extracting data, lets look at a couple of the
commands it uses.
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Querying and Reporting Data manipulation
language. Select Statement Used to query data
for specific information Conditional Selection
Used to specify which rows of a table are
displayed, based on criteria contained in the
WHERE clause Joining Two Tables Used to combine
data from two or more tables and display the
results
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Querying and Reporting Data manipulation
language. Select Statement Used to query data
for specific information Conditional Selection
Used to specify which rows of a table are
displayed, based on criteria contained in the
WHERE clause Joining Two Tables Used to combine
data from two or more tables and display the
results SQL commands can be embedded in
application programs written in many different
languages.
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• DESIGNING DATABASES
• First, you should think long and hard about how
  you use information in your current situation.
  Think of how it is organized, stored, and used.
  Designing databases
• Now imagine how this information could be
  organized better and used more easily throughout
  the organization.

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• Normalization and Entity-Relationship Diagrams
• Determine the relationships between each data
  element that you currently have
  (entity-relationship diagram).
• Determine which data elements work best together
  and how you will organize them in tables. Break
  your groups of data into as small a unit as
  possible (normalization).
• Avoid redundancy between tables. Decide what the
  key identifier will be for each record.

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• Normalization and Entity-Relationship Diagrams

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The Database Approach to Data Management

• Normalization and Entity-Relationship Diagrams

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The Database Approach to Data Management

• Distributing Databases
• A distributed database, which is stored in more
  than one physical location, is usually found in
  very large corporations that require immediate,
  fast access to data at multiple sites. There are
  two ways to structure distributed databases
• Partition a central database so that each remote
  processor has the necessary data to serve its
  local area.
• Replicate the central database at all remote
  locations.

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Distributed Databases
There are alternative ways of distributing a
database. The central database can be partitioned
(a) so that each remote processor has the
necessary data to serve its own local needs. The
central database also can be replicated (b) at
all remote locations.
Figure 6-12
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Using Databases to Improve Business Performance
and Decision Making

• Database warehouses
• As organizations want and need more information
  about their company, their products, and their
  customers, the concept of data warehousing has
  become very popular.
• Remember those islands of information we keep
  talking about? Unfortunately, too many of them
  have proliferated over the years and now
  companies are trying to rein them in using data
  warehousing.

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• Database warehouses
• No, data warehouses are not great big buildings
  with shelves and shelves of bits and bytes stored
  on them.
• They are huge computer files that store old and
  new data about anything and everything that a
  company wants to maintain information on.

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• Database 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.

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Components of a Data 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 warehouse.
Figure 6-13
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BUSINESS INTELLIGENCE, MULTIDIMENSIONAL DATA
ANALYSIS, AND DATA MINING

• Tools for consolidating, analyzing, and providing
  access to vast amounts of data to help users make
  better business decisions are often referred to
  as business intelligence (BI).
• Principal tools for business intelligence include
  software for database query and reporting, tools
  for multidimensional data analysis (online
  analytical processing), and data mining.

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Online Analytical Processing (OLAP)

• As technology improves, so does our ability to
  manipulate information maintained in databases.
  Have you ever played with a Rubik Cube one of
  those little multicolored puzzle boxes you can
  twist around and around to come up with various
  color combinations? Thats a close analogy to how
  multidimensional data analysis or online
  analytical processing (OLAP) works. In theory,
  its easy to change data around to fit your
  needs.

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Online Analytical Processing (OLAP)
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DATABASES AND THE WEB
Many companies are finding out that its easier
to provide employees with Web-like browsers
attached to the computer at the main office.
Employees anywhere can have up-to-the-minute
access to any information they need. Its also
proving cheaper to create front-end browser
applications that can more easily link
information from disparate systems than to try to
combine all the systems on the back-end.
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DATABASES AND THE WEB
One of the easiest ways to make databases
available to any user is by linking the internal
databases to the Web through software programs
that provide a connection to the database without
major reconfigurations. A database server, which
is a special dedicated computer, maintains the
DBMS. A software program, called an application
server, processes the transactions and offers
data access. A users connect to the
organizations database and receive information
in the form of a Web page.
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DATABASES AND THE WEB
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DATABASES AND THE WEB

• The benefits of using a Web browser to access a
  database are as follows
• Ease-of-use
• Less training for users
• No changes to the internal database
• Cheaper than building a new system
• Creating new efficiencies and opportunities
• Provide employees with integrated firmwide views
  of information

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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, you need special
  policies and procedures for data management.
• Establishing an information policy
• Every organization needs to have rules on how the
  data are to be organized and maintained, and who
  is allowed to view the data or change them.

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Managing Data Resources

• Information policy No one part of the
  organization should feel that it owns information
  to the exclusivity of other departments or people
  in the organization.
• A certain department may have the primary
  responsibility for updating and maintaining the
  information, but that department still has to
  share it across the whole company.
• Well-written information policies can outline the
  rules for using this important resource,
  including how it will be shared, disseminating,
  acquiring, standardizing, classifying, and
  inventorying information.

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Managing Data Resources
Data administration is responsible for the
specific policies and procedures through which
data can be managed as an organizational
resource. This function can help define and
structure the information requirements for the
entire organization to ensure it receives the
attention it deserves. Data administration is
responsible for the following Developing
information policies Planning for data Overseeing
logical database design Data dictionary
development Monitoring the usage of data by
techies and non-techies
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Using Databases to Improve Business Performance
and Decision Making
DNA Databases Crime-Fighting Weapon or Threat to
Privacy?

• Read the Interactive Session Management, and
  then discuss the following questions
• What are the benefits of DNA databases?
• What problems do DNA databases pose?
• Who should be included in a national DNA
  database? Should it be limited to convicted
  felons? Explain your answer.
• Who should be able to use DNA databases?

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Management Information Systems Chapter 6
Foundations of Business Intelligence Databases
and Information Management
Managing Data Resources
What Can Be Done About Data Quality?

• Read the Interactive Session Management, and
  then discuss the following questions
• What was the impact of data quality problems on
  the companies described in this case study? What
  management, organization, and technology factors
  caused these problems?
• How did the companies described in this case
  solve their data quality problems? What
  management, organization, and technology issues
  had to be addressed?
• It has been said that the biggest obstacle to
  improving data quality is that business managers
  view data quality as a technical problem. Discuss
  how this statement applies to the companies
  described in this case study.