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 decisionmaking 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 twodimensional 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

Information Cleansing or Scrubbing

Contact information in an operational system

Information Cleansing or Scrubbing

Standardizing customer name from operational systems

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