MANAGEMENT INFORMATION SYSTEMS

MODULE I: MANAGEMENT INFORMATION SYSTEMS

CHAPTER VI: FOUNDATIONS OF BUSINESS INTELLIGENCE: DATABASES AND INFORMATION
MANAGEMENT

I. OBJECTIVES
At the end of this chapter, the students should be able to:
 Describe how the problems of managing data resources in a traditional file environment
are solved by a database management system.
 Describe the capabilities and value of a database management system.
 Apply important database design principles.
 Evaluate tools and technologies for accessing 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 firm’s data resources.

II. SUBJECT MATTER

Topic: Foundations of Business Intelligence
Sub topic: - Organizing Data in a Traditional File Environment
- The Database Approach to Data Management
- Using Databases to Improve Business Performance and Decision Making
- Managing Data Resources

III. PROCEDURE
A. Preliminaries
Pre- Assessment
1. Describe and discuss hierarchy of data that is used to store information in a database.
2. Illustrate database approach to data management including capabilities of databases
management systems.
3. Discuss how to Databases to Improve Business Performance and Decision Making.
4. Enumerate the different resources in managing data.

B. Lesson Proper
In an age of non-organic corporate growth where companies grow by acquiring other
companies, business firms quickly become a collection of hundreds of databases, e-mail
systems, personnel systems, accounting systems, and manufacturing systems, none of which
can communicate with one another. Even if firms grow organically without acquisitions it is
common for separate departments and divisions to have their own systems and databases.
Firms in this case suffer the same result: the firm becomes a collection of systems that cannot
 share information. This creates a demand for powerful, enterprise-wide or firm-wide
databases that can bring order to the chaos.
.
1. Organizing Data in a Traditional File Environment

File organization terms & concepts

 Bit: Smallest unit of data; binary digit (0,1)

 Byte: Group of bits that represents a single character
 Database: Group of related files
 File: Group of records of same type
 Record: Group of related fields

A record describes an entity. An entity is a person, place, thing, or event on which we store and
maintain information. Each characteristic or quality describing a particular entity is called an
attribute.

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.

Problems with the traditional file environment

 Data redundancy: Presence of duplicate data in multiple files

 Data inconsistency: Same attribute has different values
 Program-data dependence: When changes in program requires changes to data accessed
by program
 Lack of flexibility
 Poor security
 Lack of data sharing and availability

TRADITIONAL FILE PROCESSING

The use of a traditional approach to file processing encourages each functional area in a
corporation to develop specialized applications. 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.
 2. The Database Approach to Data Management

Database

 Serves many applications by centralizing data and controlling redundant data

Database management system (DBMS)

 Interfaces between applications and physical data files

 Separates logical and physical views of data
 Solves problems of traditional file environment
o Controls redundancy
o Eliminates inconsistency
o Uncouples programs and data
o Enables organization to central manage data and data security

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.
Relational DBMS

 Represent data as two-dimensional tables

 Each table contains data on entity and attributes
Table: grid of columns and rows

 Rows (tuples): Records for different entities

 Fields (columns): Represents attribute for entity
  Key field: Field used to uniquely identify each record
 Primary key: Field in table used for key fields
 Foreign key: Primary key used in second table as look-up field to identify records from
original table
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.
Operations of a Relational DBMS
Three basic operations used to develop useful sets of data

 SELECT: Creates subset of data of all records that meet stated criteria
 JOIN: Combines relational tables to provide user with more information than available in
individual tables
 PROJECT: Creates subset of columns in table, creating tables with only the information
specified.
THE THREE BASIC OPERATIONS OF A RELATIONAL DBMS
The select, join, and project operations enable data from two different tables to be combined and
only selected attributes to be displayed. The SELECT operation retrieves just those parts in the PART
table whose part number is 137 or 150. The JOIN operation uses the foreign key of the Supplier Number
provided by the PART table to locate supplier data from the Supplier Table for just those records selected
in the SELECT operation. Finally, the PROJECT operation limits the columns to be shown to be simply the
part number, part name, supplier number, and supplier name (orange rectangle).

Non-relational databases: “NoSQL”

 More flexible data model

 Data sets stored across distributed machines
 Easier to scale
 Handle large volumes of unstructured and structured
 data (Web, social media, graphics)
Databases in the cloud

 Typically, less functionality than on-premises DBs

 Amazon Relational Database Service, Microsoft SQL Azure
 Private clouds
Capabilities of database management systems
Data definition capability: Specifies structure of database content, used to create tables and
define characteristics of fields
Data dictionary: Automated or manual file storing definitions of data elements and their
characteristics
Data manipulation language: Used to add, change, delete, and retrieve data from database

 Structured Query Language (SQL)

 Microsoft Access user tools for generating SQL

MICROSOFT ACCESS DATA DICTIONARY FEATURES

Microsoft Access has a rudimentary data dictionary capability that displays information about the
size, format, and other characteristics of each field in a database. Displayed here is the
information maintained in the SUPPLIER table. The small key icon to the left of Supplier_Number
indicates that it is a key field.
EXAMPLE OF AN SQL QUERY

Illustrated here are the SQL statements for a query to select suppliers for parts 137 or 150.
AN ACCESS QUERY

Designing Databases
  Conceptual (logical) design: abstract model from business perspective
 Physical design: How database is arranged on direct-access storage devices
Design process identifies:

 Relationships among data elements, redundant database elements

 Most efficient way to group data elements to meet business requirements, needs of
application programs
Normalization

 Streamlining complex groupings of data to minimize redundant data elements and

awkward many-to-many relationships.
AN UNNORMALIZED RELATION FOR ORDER

An unnormalized relation contains repeating groups. For example, there can be many parts and
suppliers for each order. There is only a one-to-one correspondence between Order_Number and
Order_Date.
NORMALIZED TABLES CREATED FROM ORDER

After normalization, the original relation ORDER has been broken down into four smaller
relations. The relation ORDER is left with only two attributes and the relation LINE_ITEM has a
combined, or concatenated, key consisting of Order_Number and Part_Number.
Referential integrity rules

 Used by RDMS to ensure relationships between tables remain consistent

Entity-relationship diagram

 Used by database designers to document the data model

 Illustrates relationships between entities
One technique database designer’s use in modeling the structure of the data is to use an entity-
relationship diagram. Symbols on the diagram illustrate the types of relationships between
entities.
AN ENTITY-RELATIONSHIP DIAGRAM

This graphic shows an example of an entity-relationship diagram. It shows that one ORDER can
contain many LINE_ITEMs. (A PART can be ordered many times and appear many times as a line
item in a single order.) Each LINE ITEM can contain only one PART. Each PART can have only one
SUPPLIER, but many PARTs can be provided by the same SUPPLIER.
3. Using Databases to Improve Business Performance and Decision Making
The Challenge of Big data
We now use the term big data to describe these datasets with volumes so huge that they are
beyond the ability of typical DBMS to capture, store, and analyze.
Big data doesn’t refer to any specific quantity, but usually refers to data in the petabyte and
exabyte range—in other words, billions to trillions of records, all from different sources. Big data
are produced in much larger quantities and much more rapidly than traditional data.
Businesses are interested in big data because they can reveal more patterns and interesting
anomalies than smaller data sets, with the potential to provide new insights into customer
behavior, weather patterns, financial market activity, or other phenomena. However, to derive
business value from these data, organizations need new technologies and tools capable of
managing and analyzing non-traditional data along with their traditional enterprise data.
Business intelligence infrastructure

 Today includes an array of tools for separate systems, and big data
 Contemporary tools:
o Data warehouses
o Data marts
o Hadoop
o In-memory computing
o Analytical platforms

 Business intelligence is a very amorphous notion that is not well defined. In this course we
refer instead to a “business intelligence” environment which is composed of many
different components (including both technology and management dimensions).
Data warehouse:

 Stores current and historical data from many core operational transaction systems
 Consolidates and standardizes information for use across enterprise, but data cannot be
altered
 Provides analysis and reporting tools
Data marts:

 Subset of data warehouse

 Summarized or focused portion of data for use by specific population of users
 Typically focuses on single subject or line of business
COMPONENTS OF A DATA WAREHOUSE

A contemporary business intelligence infrastructure features capabilities and tools to manage

and analyze large quantities and different types of data from multiple sources. Easy-to-use query
and reporting tools for casual business users and more sophisticated analytical toolsets for power
users are included.
Hadoop

 Enables distributed parallel processing of big data across inexpensive computers

 Key services
o Hadoop Distributed File System (HDFS): data storage
o MapReduce: breaks data into clusters for work
o Hbase: NoSQL database
 Used by Facebook, Yahoo, NextBio
In-memory computing

 Used in big data analysis

 Use computers main memory (RAM) for data storage to avoid delays in retrieving data
from disk storage
 Can reduce hours/days of processing to seconds
 Requires optimized hardware
Analytic platforms

 High-speed platforms using both relational and non-relational tools optimized for large
datasets.
Analytical tools: Relationships, patterns, trends

 Tools for consolidating, analyzing, and providing access to vast amounts of data to help
users make better business decisions
o Multidimensional data analysis (OLAP)
o Data mining
o Text mining
o Web mining

Online analytical processing (OLAP)

 Supports multidimensional data analysis

o Viewing data using multiple dimensions
o Each aspect of information (product, pricing, cost, region, time period) is different
dimension
o Example: How many washers sold in East in June compared with other regions?
 OLAP enables rapid, online answers to ad hoc queries
MULTIDIMENSIONAL DATA MODEL
The view that is showing is product versus region. If you rotate the cube 90 degrees, the face that
will show 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.
Data mining:

 Finds hidden patterns, relationships in datasets

o Example: customer buying patterns
 Infers rules to predict future behavior
 Types of information obtainable from data mining:
o Associations: Occurrences linked to single event
o Sequences: Events linked over time
o Classification: Recognizes patterns that describe group to which item belongs
o Clustering: Recognizes patterns that describe group to which item belongs
o Forecasting: Recognizes patterns that describe group to which item belongs

Text mining

 Extracts key elements from large unstructured data sets

o Stored e-mails
o Call center transcripts
o Legal cases
o Patent descriptions
o Service reports, and so on
 Sentiment analysis software: Mines e-mails, blogs, social media to detect opinions
Web mining

 Discovery and analysis of useful patterns and information from Web

o Understand customer behavior
o Evaluate effectiveness of Web site, and so on
 Web content mining: Mines content of Web pages
 Web structure mining: Analyzes links to and from Web page
 Web usage mining: Mines user interaction data recorded by Web server
Databases and the Web

 Many companies use Web to make some internal databases available to customers or
partners
 Typical configuration includes:
o Web server
o Application server/middleware/CGI scripts
o Database server (hosting DBMS)
 Advantages of using Web for database access:
o Ease of use of browser software
 o Web interface requires few or no changes to database
o Inexpensive to add Web interface to system

LINKING INTERNAL DATABASES TO THE WEB

Users access an organization’s internal database through the Web using their desktop PCs and
Web browser software.

4. Managing Data Resources

Establishing an information policy

 Firm’s rules, procedures, roles for sharing, managing, standardizing data

 Data administration: Establishes policies and procedures to manage data
 Data governance: Deals with policies and processes for managing availability, usability,
integrity, and security of data, especially regarding government regulations
 Database administration: Creating and maintaining database
Ensuring data quality

 More than 25% of critical data in Fortune 1000 company databases are inaccurate or
incomplete
o Redundant data
o Inconsistent data
o Faulty input
 Before new database in place, need to:
o Identify and correct faulty data
o Establish better routines for editing data once database in operation

Data quality audit:

 Structured survey of the accuracy and level of completeness of the data in an information
system
o Survey samples from data files, or
o Survey end users for perceptions of quality
Data cleansing

 Software to detect and correct data that are incorrect, incomplete, improperly formatted,
or redundant
 Enforces consistency among different sets of data from separate information systems

ACTIVITY 1: SHORT VIDEO CLIP VIEWING

Now you are going to watch a short video clip about the Maruti Suzuki Business Intelligence and
Enterprise Databases, as you view the clip take down notes. Type this link to access the video:
http://www.youtube.com/watch?v=aZWAzbRm-ms

After watching the videos, answer the following questions. You may use your notes as reference.
1. What were the business challenges facing Maruti Suzuki management prior to adopting the
Oracle suite?
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2. What were the important business factors which management used to evaluate Oracle’s
database offerings?
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3. Why was it important that a vendor’s products be able to integrate with legacy systems?
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ACTIVITY 2: REVIEW QUESTION
Based on the discussion in this chapter, give some Advantages and Disadvantages of combining
Business Intelligence with a flexible Information System. Write your answers on the box below.

ADVANTAGES DISADVANTAGES