CHAPTER 4

FOUNDATIONS OF BUSINESS INTELLIGENCE:

DATABASES AND INFORMATION MANAGEMENT
 4.1 Organizing Data in a Traditional File Environment

4.2 The Database Approach to Data Management

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4.3 Using Databases to Improve Business Performance
and Decision Making
4.4 Managing Data Resources

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4.1 ORGANIZING DATA IN A TRADITIONAL FILE ENVIRONMENT

 An effective information system provides users with timely,

accurate, and relevant information.
 This information is stored in computer files. When the files

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are properly arranged and maintained, users can easily
access and retrieve the information they need.
 Well-managed, carefully arranged files make it easy to
obtain data for business decisions, whereas poorly managed
files lead to chaos in information processing, high costs,
poor performance, and little, if any, flexibility.
 Despite the use of excellent hardware and software, many
organizations have inefficient information systems because
of poor file management.
 In this section we describe the traditional methods that
organizations have used to arrange data in computer files.
 3
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.
 A bit represents the smallest unit of data a
computer can handle.

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 A group of bits, called a byte, represents a single
character, which can be a letter, a number, or
another symbol.
 A grouping of characters into a word, a group of
words, or a complete number (such as a person's
name or age) is called a field.
 A group of related fields, such as the student's
name, the course taken, the date, and the grade,
comprises a record; a group of records of the same
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type is called a file.
 A group of related files makes up a database.
 PROBLEMS WITH THE TRADITIONAL FILE ENVIRONMENT
 In most organizations, systems tended to grow independently, and
not according to some grand plan. Each functional area tended to
develop systems in isolation from other functional areas.
 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, processing inflexibility, and wasted

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storage resources.
 Data redundancy is the presence of duplicate data in multiple data
files.
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 organization's data.
Lack of Data-Sharing and Availability
 The lack of control over access to data in this confused
environment does not make it easy for people to obtain
information. 5



 4.2 THE DATABASE APPROACH TO DATA MANAGEMENT

 Database technology can cut through many of the

problems a traditional file organization creates.
 Database is a collection of data organized to serve
many applications efficiently by centralizing the data
and minimizing redundant data.

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 Rather than storing data in separate files for each
application, data are stored physically to appear to
users as being stored in only one location.
 A single database services multiple applications.

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3.8. DATABASE MANAGEMENT SYSTEMS (DBMS)
 A Database Management System (DBMS) is a set of computer
programs that controls the creation, maintenance, and the use of a
database.
 is simply the software that permits an organization to centralize
data, manage them efficiently, and provide access to the stored data
by application programs.
 It allows organizations to place control of database development in
the hands of database administrators (DBAs) and other specialists.

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 A DBMS is a system software package that helps the use of
integrated collection of data records and files known as databases.
 It allows different user application programs to easily access the
same database.
 DBMSs may use any of a variety of database models, such as the
network model or relational model. T
 Thus, many DBMS packages provide Fourth-generation
programming language (4GLs) and other application development
features. It helps to specify the logical organization for a database
and access and use the information within a database.
 It provides facilities for controlling data access, enforcing data
integrity, managing concurrency, and restoring the database from
backups. 7
 A DBMS also provides the ability to logically present database
information to users.
 A DBMS is a set of software programs that controls the organization,
storage, management, and retrieval of data in a database. DBMSs
are categorized according to their data structures or types. The
DBMS accepts requests for data from an application program and
instructs the operating system to transfer the appropriate data. The
queries and responses must be submitted and received according to a
format that conforms to one or more applicable protocols. When a

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DBMS is used, information systems can be changed much more
easily as the organization's information requirements change. New
categories of data can be added to the database without disruption to
the existing system.
 Database servers are computers that hold the actual databases and
run only the DBMS and related software. Database servers are
usually multiprocessor computers, with generous memory and RAID
disk arrays used for stable storage. Hardware database accelerators,
connected to one or more servers via a high-speed channel, are also
used in large volume transaction processing environments. DBMSs
are found at the heart of most database applications. DBMSs may be
built around a custom multitasking kernel with built-in networking
support, but modern DBMSs typically rely on a standard operating 8
system to provide these functions.
Features commonly offered by database management
systems include:
 Query ability
 Querying is the process of requesting attribute information
from various perspectives and combinations of factors.
Example: "How many 2-door cars in Texas are green?" A
database query language and report writer allow users to

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interactively interrogate the database, analyze its data and
update it according to the users privileges on data.
 Backup and replication
 Copies of attributes need to be made regularly in case
primary disks or other equipment fails. A periodic copy of
attributes may also be created for a distant organization that
cannot readily access the original. DBMS usually provide
utilities to facilitate the process of extracting and
disseminating attribute sets. When data is replicated
between database servers, so that the information remains
consistent throughout the database system and users cannot
tell or even know which server in the DBMS they are using, 9
the system is said to exhibit replication transparency.
 Security
 Often it is desirable to limit who can see or change which attributes
or groups of attributes. This may be managed directly by individual,
or by the assignment of individuals and privileges to groups, or (in
the most elaborate models) through the assignment of individuals
and groups to roles which are then granted entitlements.
 Computation
 There are common computations requested on attributes such as

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counting, summing, averaging, sorting, grouping, cross-referencing,
etc. Rather than have each computer application implement these
from scratch, they can rely on the DBMS to supply such
calculations.
 Change and access logging
 Often one wants to know who accessed what attributes, what was
changed, and when it was changed. Logging services allow this by
keeping a record of access occurrences and changes.
 Automated optimization
 If there are frequently occurring usage patterns or requests, some
DBMS can adjust themselves to improve the speed of those
interactions. In some cases the DBMS will merely provide tools to
monitor performance, allowing a human expert to make the 10
necessary adjustments after reviewing the statistics collected.
 Meta-data repository
 Metadata is data describing data. For example, a listing that
describes what attributes are allowed to be in data sets is
called "meta-information". The meta-data is also known as
data about data.
 Data warehouse
 Stores data extracted from operational, external, or other

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databases of an organization. The data warehouse serves as
the ‘memory’ of the enterprise. But, memory is of little use
without intelligence. The tools that analyze data provide the
‘intelligence’.
 Data mining
 Data Mining is the exploration and analysis, by automatic or
semiautomatic means, of large quantities of data in order to
discover meaningful patterns and rules.
 A major use of data warehouse databases.
 Data is analyzed to reveal hidden correlations, patterns,
and trends.
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 4.3 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.
 But they also need databases to provide information that

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will help the company run the business more efficiently,
and help managers and employees make better decisions.
 In a large company, with large databases or large
systems for separate functions, such as manufacturing,
sales, and accounting, special capabilities and tools are
required for analyzing vast quantities of data and for
accessing data from multiple systems.
 These capabilities include data warehousing, data
mining, and tools for accessing internal databases 12
through the Web.
4.4 MANAGING DATA RESOURCES
 Setting up a database is only a start. In order to make
sure that the data for your business remain accurate,
reliable, and readily available to those who need it,
your business will need special policies and procedures

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for data management.
 Establishing an information policy; resource, and you
don’t want people doing whatever they want with
them. You need to have rules on how the data are to be
organized and maintained, and who is allowed to view
the data or change them.
 An information policy specifies the
organization’s rules for sharing, disseminating,
acquiring, standardizing, classifying, and inventorying
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information.
 Data administration is responsible for the
specific policies and procedures through which
data can be managed as an organizational

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resource. These responsibilities include
developing information policy, planning for data,
overseeing logical database design and data
dictionary development, and monitoring how
information systems specialists and end-user
groups use data.

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Woldetsadik Kagnew(Assist.prof.)
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THE END!