38 Part I • The Context of Database Management

DATA MATTER!
The amount of data being generated, stored, and processed is growing by leaps
and bounds. According to a McKinsey Global Institute Report (Manyika et al., 2011),
it is estimated that in 2010 alone, global enterprises stored more than 7 exabytes
of data (an exabyte is a billion gigabytes), while consumers stored more than
6 exabytes of new data on devices such as personal computers, smartphones,
tablets, and notebooks. That is a lot of data! As more and more of the world
becomes digital and the products we use every day, such as watches, refrigerators,
and so forth, become smarter, the amount of data that needs to be generated,
stored, and processed will only continue to grow.
The availability of all of these data is also opening up unparalleled opportunities
for companies to leverage data for various purposes. A recent study by IBM (IBM,
2011) shows that one of the top priorities for CEOs in the coming years is the ability
to use insights and intelligence that can be gleaned from data for competitive
advantage. The McKinsey Global Institute Report (Manyika et al., 2011) estimates
that by appropriately leveraging the data available to them, the U.S. retail industry
can see up to a 60 percent increase in net margin, and manufacturing can realize
up to a 50 percent reduction in product development costs.
The availability of large amounts of data is also fueling innovation in companies
and allowing them to think differently and creatively about various aspects of their
businesses. Below you will find some examples from a variety of domains:
1. The Memorial Sloan-Kettering Cancer center is using IBM Watson (do
you remember Watson beating Ken Jennings in Jeopardy?) to help ana-
lyze the information from medical literature, research, past case histories,
and best practices to help provide oncologists with evidence-based recom-
mendations (www-935.ibm.com/services/multimedia/MSK_Case_Study_
IMC14794.pdf).
2. Continental Airlines (now United) invested in a real-time business intelli-
gence capability and was able to dramatically improve its customer service
and operations. For example, it can now track whether a high-value customer
is experiencing a delay in a trip, where and when the customer will arrive at
the airport, and the gate the customer must go to make the next connection
(Anderson-Lehman et al., 2004).
3. A leading fast-food chain uses video information from its fast-food lane
to determine what food products to display on its (digital) menu board. If
the lines are long, the menu displays items that can be served quickly. If the
lines are short, the menu displays higher-margin but slower-to-prepare items
(­Laskowski, 2014).
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4. Nagoya Railroad analyzes data about its customers’ travel habits along with
their shopping and dining habits to better understand its customers. For
example, it was able to identify that young women who used a particular
train station for their commute also tended to eat at a particular type of res-
taurant and buy from certain types of stores. This information allows Nagoya
Railroad to create a targeted marketing campaign (http://public.dhe.ibm
.com/common/ssi/ecm/en/ytc03707usen/YTC03707USEN.PDF).
5. Kroger, a fast-growing grocery store chain, was able to increase the return
rates of its direct mail campaigns to a very high level of 70 percent by per-
sonalizing the offers based on the data the company had collected regarding
their customer’s purchasing behavior (Groenfeldt, 2013).
At the heart of all the above examples is the ability to collect, organize, and
manage data. This is precisely the focus of this textbook. This understanding will
give you the power to support any business strategy and the deep satisfaction
that comes from knowing how to organize data so that financial, marketing, or
customer service questions can be answered almost as soon as they are asked.
Enjoy!

Hoffer, J., Venkataraman, R., Topi, H., Hoffer, J., Venkataraman, R., Topi, H., Hoffer, J., Venkataraman, R., Topi, H., & Hoffer, J. (2019). Modern database management, global edition. Pearson Education, Limited.
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