Foundation of Business

Intelligence: Databases and

Managing Information
Chapter 6
 Problems of managing Data Resources in a
Traditional File Environment
 Effective IS provides user with Accurate,

timely and relevant information

 Many businesses do not have this kind of

information
File Organization Terms and
Concepts
A computer system organizes data in a hierarchy that
starts with bits and bytes and progresses to fields,
records, files, and databases.
Traditional File Environment- some terms:
 Bit- smallest

 Byte- 8 bits multiple

 Field- column
 Record- row
 Entity- objective, organization

 Attribute- characteristics, age

 File- table
 Database- multiple files related- RDBMS
 Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases
and Information Management

The Data Hierarchy

A computer system
organizes data in a
hierarchy that starts
with the bit, which
represents either a 0
or a 1. Bits can be
grouped to form a
byte to represent one
character, number, or
symbol. Bytes can be
grouped to form a
field, and related
fields can be
grouped to form a
record. Related
records can be
collected to form a
file, and related files
can be organized into
a database.

Figure 6-1
 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
Problems with the Traditional
Environment
Organization has different departments. Each developed their
own systems and files
 Data redundancy and inconsistency:

It is the presence of duplicate data in multiple data files so that

the same data are stopped in more than place or location.
Data redundancy occurs when different groups in an
organization independently collect the same piece of data and
store it independently of each other.
 Program data dependence:

It is the coupling of data stored in files and the specific

programs required to update and maintain those files such
that changes in programs required to update and maintain
those files such that changes in programs require changes to
the data
Lack of flexibility:
A traditional file system can deliver routine
scheduled reports after existence
programming efforts

 Poor security:
• Lack of control, widespread
• Who is accessing and making changes
Lack of Data sharing and
Availability
•Information cannot be related
•Impossible to share or access in a
timely manner.
What is a Database?
 Collection of data organized to serve many applications
efficiently by centralizing the data and controlling the
redundant data.

 Database management system:

Is software that permits an organization to centralize data, manage them efficiently and
provides access to the stored data by application programs.
• Interfaces between application programs and physical data files
• Separates logical and physical views of data
• Solves problems of traditional file environment
• Controls redundancy by minimizing isolated files in which same data is
repeated.
• Eliminated inconsistency
• Enables central management and security
DATABASE MANAGEMENT SYSTEM
DATA DEFINITION CAPABILITY, DATA
DICTIONARY CAPABILITY AND DATA
MANPULATION LANGUAGE (SQL)
 Software that permits an organization to

centralize data, manages them efficiently,

and provides access to the stored data by
application programs.
 Separates the Logical and physical view of the

data
 The Database Approach to Data Management

Human Resources Database with Multiple Views

A single human resources database provides many different views of data, depending on the information
requirements of the user. Illustrated here are two possible views, one of interest to a benefits specialist
and one of interest to a member of the company’s payroll department.

Figure 6-3
Types of DBMS
 Relational DBMS
 Most popular type of DBMS
 Represents data into two dimensional tables

called relations
 Concept of primary and foreign key
 RDBMS have three basic operations: SELECT,

JOIN, PROJECT
 QUERYING AND REPORTING
 The Database Approach to Data Management

Relational Database Tables

A relational database organizes data in the form of two-dimensional tables.

Illustrated here are tables for the entities SUPPLIER and PART showing how
they represent each entity and its attributes. Supplier_Number is a primary key
for the SUPPLIER table and a foreign key for the PART table.

Figure 6-4A
 The Database Approach to Data Management

Relational Database Tables (cont.)

Figure 6-4B
OODBMS (OBJECT ORENTED DBMS)
 Databases that can store drawings, images,
videos, photographs and voices along with
the structured numbers and characters.
 Relatively slow than RDBMS

 HYBRID OODBMS- it has the capabilities of

RDBMS and OODBMS
 PRINCIPAL TOOLS AND TECHNOLOGIES FOR
ACCESSING INFORMATION FROM DATABASE TO
IMPROVE BUSINESS PERFORMANCE AND DECISION
MAKING
 Businesses use their databases to keep track of

basic transactions such as paying employees and

suppliers, processing orders, keeping track of
customers etc;
 In large databases from separate functions large

amount of data is stored and there are special

capabilities and tools for analyzing large amount of
data and for accessing this data
These capabilities include:
 Data warehousing
 Data mining
 Tools for accessing internal databases

through the web

Querying and Reporting
DBMS includes tools for accessing and
manipulating information in databases. Most
DBMS have a specialized language called a
data manipulation language, that is used to
add, change, delete, and retrieve the data in
the database.
Distributing Databases
Database design also considers how the data
are to be distributed. Information systems
can be designed with a centralized database
that is used by a single central processor or
by multiple processors in a client/ server
network.
 The Database Approach to Data Management

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
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.
DATA WAREHOUSING
If data is required from:
 Different departments
 Should be complete
 Updated
 Past Data

Then data warehousing solves your problems

 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
Data can be accessed but cannot be altered
 Using Databases to Improve Business Performance and
Decision Making

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
 DATA MARTS

 Data marts focuses on single subject area

online of business
 Decentralized Subsets of data warehouses

which is highly focused or summarized. It is

placed in separate database for a specific
population of the users
BUSINESS INTELLIGENCE,
MULTIDIMENSIONAL, DATA ANALYSIS
AND DATA MINING
 Once data has been captured and organized
it is available for further analysis
 Several tools are available for analyzing data

to see new patterns, relationships and

insights.
 The tools for consolidating analyzing and

providing access to vast amount of data to

help users make better decisions are often
referred as “Business Intelligence (BI)”
 Using Databases to Improve Business Performance and
Decision Making
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. Figure 6-14
These Include..
 Software for querying and reporting
 Tools for multidimensional data analysis

(Online analytical processing OLAP)

 Data mining
OLAP (Online Analytical Processing)
 Lets assume you sell four products in three
different regions of the country?
 If you want an answer for a simple question

like “how many of the Product A was sold in

the last quarter?”. Simple query would answer
the question but lets say the question is “how
many of product A was sold in each of your
sales region and compare the actual and
projected sales?”
 For that you will need OLAP which will enable
user to se same data in different ways
 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. Figure 6-15
DATA MINING
 Data mining is the process of extracting patterns
from data. Data mining is becoming an increasingly
important tool to transform this data into
information.
 It is commonly used in a wide range of profiling
practices, such as marketing, surveillance, fraud
detection and scientific discovery
 Data mining can be used to uncover patterns in data
but is often carried out only on samples of data
 The mining process will be ineffective if the samples
are not a good representation of the larger body of
data
 Data mining cannot discover patterns that
may be present in the larger body of data if
those patterns are not present in the sample
being “mined”. Inability to find patterns may
become a cause for some disputes between
customers and service providers. Therefore,
data mining is not foolproof, but may be
useful if sufficiently representative data
samples are collected
Text Mining and Web Mining
 Database and the Web
 If you have used web to order something

online then you are using a website which is

linked to a database
 There are number of advantages in using the

web to access an organization internal

databases
WEB BROWSER SOFTWARE IS MUCH EASIER TO
HANDLE
Managing Data Resources
 Establishing an Information Policy:
An information policy specifies the
organization’s rules for sharing, dissemination,
acquiring, standardizing, classifying and
inventorying information. Information policy
lays out specific procedures and
accountabilities, identifying which users and
organizational units can share information,
where information can be distributed and who
is responsible or updating and maintaining the
information.
ENSURING DATA QUALITY
 A well-designed database and information
policy will go a long way towards ensuring
that the business has the information it
needs. However, additional steps must be
taken to ensure that the data in
organizational databases are accurate and
remain reliable.