Module 3: Data and Business Intelligence

Learning Objectives
After studying this module, you should be able to:
1. Define a database and a database management system.
2. Explain logical database design and the relational database model.
3. Define the five components of a database management system.
4. Summarize three recent trends in database design and use.
5. Analyse the four major components and functions of a data warehouse and their use for
business.
6. Describe the functions of a data mart.
7. Compare and contrast data lakes with data warehouses.
8. Describe the role of business analytics in the decision-making process.
9. Examine the advantages and challenges of big data and predictive analytics for a business.
10. Explain database marketing and its business applications.
11. Explain key features of Tableau and Power BI as two popular business intelligence and
visualization platforms.

Section 3-1: Databases

Definition of a Database
• A database is a collection of related data stored in a central location or multiple locations.
• It can consist of a single file or a group of files.
• Example: A university database might have files for students, staff, faculty, and courses.
Data Hierarchy
• Fields: Smallest unit of data (e.g., Social Security number, name).
• Records: Group of related fields (e.g., all information about Mary Smith).
• Files: Group of related records (e.g., all student records).
Advantages of a Database Over Flat Files
• More information can be generated from the same data.
• Complex requests can be handled more easily.
• Data redundancy is eliminated or minimized.
• Programs and data are independent.
• Data management is improved.
• Sophisticated security measures can be used.
• Storage space is reduced.

Section 3-2: Logical Database Design

Physical vs. Logical View
• Physical View: How data is stored on and retrieved from storage media (e.g., hard disks,
magnetic tapes).
• Logical View: How information appears to users and how it can be organized and retrieved.
Data Model
• Determines how data is created, represented, organized, and maintained.
• Components:
• Data Structure: Describes how data is organized and relationships among records.
• Operations: Methods, calculations, and queries that can be performed on data.
• Integrity Rules: Boundaries of a database, such as constraints and access methods.
Types of Data Models
• Relational Model: Most common; uses two-dimensional tables of rows and columns.
• Hierarchical Model: Records form a treelike structure (e.g., supplier-product relationship).
• Network Model: Similar to hierarchical but allows multiple parent-child relationships.
• Object-Oriented Model: Represents real-world entities with objects containing attributes and
methods.
Section 3-3: Components of a DBMS
Five Components of a DBMS
1. Database Engine: Responsible for data storage, manipulation, and retrieval.
2. Data Definition: Defines the structure of the database (e.g., fields, tables).
3. Data Manipulation: Allows users to query and update data.
4. Application Generation: Used to design elements of an application (e.g., forms, menus).
5. Data Administration: Handles backup, recovery, security, and user permissions.

Section 3-4: Recent Trends in Database Design and Use

Trends
1. Data-Driven Web Sites: Act as interfaces to databases, retrieving and storing data
dynamically.
2. Distributed Databases: Store data on multiple servers throughout an organization.
• Approaches: Fragmentation, Replication, Allocation.
3. Object-Oriented Databases: Handle complex data types like multimedia and support
inheritance and encapsulation.

Section 3-5: Data Warehouses

Definition
• A data warehouse is a collection of data from various sources used to support decision-
making applications.
Characteristics
• Subject-oriented
• Integrated
• Time-variant
• Aggregated data
• Analytical purpose
Components
1. Input: External data sources, transaction files, ERP/CRM systems.
2. ETL (Extraction, Transformation, Loading):
• Extract: Collect data from various sources.
• Transform: Process and format data.
• Load: Transfer data into the warehouse.
3. Storage: Raw data, summary data, metadata.
4. Output: Reports, OLAP analysis, data-mining analysis.

Section 3-6: Data Marts

• A data mart is a smaller version of a data warehouse, used by a single department or function.
• Advantages:
• Faster access to data.
• Improved response time.
• Easier and less expensive to create.
• Limitations:
• Limited scope compared to data warehouses.

Section 3-7: Data Lakes

• A data lake gathers and stores data in its original format (structured and unstructured).
• Differences from Data Warehouses:
• Data lakes store raw data; warehouses store processed data.
• Data lakes are suitable for big data analytics and machine learning.
Section 3-8: Business Analytics
Definition
• Business Analytics (BA) uses data and statistical methods to gain insights and provide
actionable information for decision-makers.
• Types:
• Descriptive Analytics: Reviews past events and provides reports.
• Predictive Analytics: Forecasts future trends and outcomes.
• Prescriptive Analytics: Recommends actions based on predictions.

Section 3-9: Big Data

Definition
• Big Data refers to data so voluminous that conventional computing methods cannot efficiently
process it.
• The 5 Vs of Big Data:
• Volume: Amount of data.
• Variety: Types of data (structured/unstructured).
• Velocity: Speed of data generation and processing.
• Veracity: Trustworthiness and accuracy of data.
• Value: Usefulness of data for decision-making.
Benefits
• Retail: Customer relationship management, personalized services.
• Finance: Risk analysis, fraud detection.
• Healthcare: Disease prediction, genome research.
Challenges
• Privacy risks.
• Ethical concerns.
• Lack of legal protections.

Section 3-10: Database Marketing

Definition
• Uses an organization’s database of customers and potential customers to promote products
or services.
• Goals:
• Increase profits.
• Enhance competitiveness.
• Build long-term customer relationships.
Techniques
• Multivariate analysis.
• Data segmentation.
• Automated tools.

Section 3-11: Tableau and Power BI

Tableau
• A data visualization tool for generating business intelligence.
• Features:
• Superb visualizations.
• In-depth insights.
• User-friendly interface.
• Works with disparate data sources.
Power BI
• A platform for analysing and visualizing data from different sources.
• Advantages:
• Seamless integration with existing systems.
• Personalized dashboards.
 • Real-time analytics.

Key Terms
• Allocation , Big Data , Graph Database , Hierarchical Model , Business Analytics (BA) ,
Create, Read, Update, Delete (CRUD) , Data Dictionary , Data Hierarchy , Data Lake , Data
Mart , Data Model , Data Warehouse , Database , DBMS , Database Marketing , Data-
Driven Web Site , ETL , OLAP , OLTP , Primary Key , Relational Model , Sequential Access
File Structure , Structured Query Language (SQL) , Text-Mining Analysis .

Review Questions
1. Define a database.
2. What are the differences between physical and logical views of information?
3. What are the five components of a DBMS?
4. What are three recent trends in database design and implementation?
5. What are two inputs and two outputs of a data warehouse?

Projects
1. Write a paper explaining BI and its applications in companies.
2. Identify companies using data-mining tools and explain their benefits.
3. Explore mobile analytics and its impact on sales goals.
4. Explain database marketing and its challenges and advantages.
5. Discuss big data analytics and privacy risks.
Mind Map
Module 3: Data and Business Intelligence
1. Databases
• Definition: A collection of related data stored in a central or multiple locations.
• Advantages Over Flat Files:
• More information generation.
• Handles complex requests easily.
• Reduces data redundancy.
• Improves data management.
• Supports sophisticated security measures.
• Reduces storage space.
• Types of Data:
• Internal (e.g., transaction records, sales records).
• External (e.g., competitors, economic indicators).
• Access Methods:
• Sequential Access: Records processed in order.
• Random Access: Records accessed directly.
• Indexed Sequential Access (ISAM): Combines sequential and random access.

2. Logical Database Design

• Physical View: How data is stored and retrieved (e.g., hard disks, magnetic tapes).
• Logical View: How users perceive and organize data.
• Data Model Components:
• Data Structure: Describes relationships among records.
• Operations: Methods for updating and querying data.
• Integrity Rules: Defines boundaries and constraints.
• Common Data Models:
• Relational Model: Uses tables with rows and columns.
• Primary Key: Uniquely identifies records.
• Foreign Key: Links tables.
• Normalization: Eliminates redundant data.
• Hierarchical Model: Tree-like structure (e.g., supplier-product relationship).
• Network Model: Allows multiple parent-child relationships.

3. Database Management System (DBMS)

• Components:
• Database Engine: Handles storage, manipulation, and retrieval.
• Data Definition: Defines structure (e.g., fields, tables).
• Data Manipulation: Queries and updates data.
• Application Generation: Designs application elements (e.g., menus, forms).
• Data Administration: Manages backup, recovery, security, and user permissions.
• Roles:
• Database Administrator (DBA): Designs, secures, and maintains databases.

4. Recent Trends in Database Design

• Data-Driven Web Sites: Interfaces to databases for dynamic content.
• Distributed Databases:
• Stores data across multiple servers.
• Approaches: Fragmentation, Replication, Allocation.
• Object-Oriented Databases:
• Handles complex data types (e.g., multimedia).
• Uses objects with attributes and methods.

5. Data Warehouses
 • Definition: A collection of data from various sources for decision-making.
• Characteristics:
• Subject-Oriented.
• Integrated.
• Time-Variant.
• Aggregated Data.
• Analytical Purpose.
• Components:
• Input: External data sources, transaction files, ERP/CRM systems.
• ETL (Extraction, Transformation, Loading): Processes raw data.
• Storage: Raw, summary, metadata.
• Output: Reports, OLAP analysis, data-mining analysis.

6. Data Marts
• Definition: Smaller version of a data warehouse for specific departments.
• Advantages:
• Faster access to data.
• Improved response time.
• Easier and less expensive to create.

7. Data Lakes
• Definition: Stores data in its original format (structured/unstructured).
• Key Differences from Data Warehouses:
• Types of Data: Raw vs. Processed.
• Accessibility: Highly accessible vs. Limited.
• Update Procedure: Quick vs. Slow.
• Cost: Less than a data warehouse.

8. Business Analytics (BA)

• Definition: Uses data and statistical methods for actionable insights.
• Types:
• Descriptive Analytics: Reviews past events.
• Predictive Analytics: Forecasts future trends.
• Prescriptive Analytics: Recommends actions.
• Applications:
• Retail: Personalized services.
• Finance: Risk analysis, fraud detection.
• Healthcare: Disease prediction, genome research.

9. Big Data
• Definition: Voluminous data that conventional methods cannot process efficiently.
• 5 Vs:
• Volume: Quantity of data.
• Variety: Structured and unstructured data.
• Velocity: Speed of data generation.
• Veracity: Trustworthiness and accuracy.
• Value: Usefulness for decision-making.
• Challenges:
• Privacy risks.
• Ethical concerns.
• Lack of legal protections.

10. Database Marketing

• Definition: Uses customer databases to promote products/services.
 • Techniques:
• Multivariate Analysis.
• Data Segmentation.
• Automated Tools.
• Benefits:
• Increased profitability.
• Improved marketing communications.
• Enhanced product development.

11. Tableau and Power BI

• Tableau:
• Visualization tool for business intelligence.
• Features: Superb visualizations, user-friendly interface, supports diverse data sources.
• Power BI:
• Platform for analysing and visualizing data.
• Features: Seamless integration, personalized dashboards, real-time analytics.
Module 3 – INF1505

A collection of related data stored in a central

What is a database?
location or multiple locations.

A database management system (DBMS) is

What is a DBMS? software for creating, storing, maintaining, and
accessing database files.

The physical view describes how data is stored

What is the difference between physical and and retrieved from storage media, while the
logical views of information? logical view explains how users perceive and
organize data.

A relational model uses two-dimensional tables

Define the relational model. of rows (records) and columns (fields) to store
data.

Normalization improves database efficiency by

What is normalization? eliminating redundant data and ensuring only
related data is stored in a table.

A primary key uniquely identifies every record in

What is a primary key?
a relational database.

Structured Query Language (SQL) is a standard

fourth-generation query language used by many
What is SQL?
DBMS packages to retrieve and manipulate
data.

A data warehouse is a collection of data from

various sources used to support decision-
What is a data warehouse?
making applications and generate business
intelligence.

Extraction, Transformation, and Loading (ETL)

refers to the processes of collecting,
What is ETL?
transforming, and loading data into a data
warehouse.
 Online Analytical Processing (OLAP) generates
What is OLAP? business intelligence by providing
multidimensional analysis of data.

A data mart is a smaller version of a data

What is a data mart? warehouse, used by a single department or
function.

A data lake gathers and stores data in its original

What is a data lake? format, both structured and unstructured, in a
central location.

Business analytics uses data and statistical

What are business analytics (BA)? methods to gain insights and provide actionable
information for decision-makers.

Descriptive (reviews past events), predictive

What are the three types of analytics? (forecasts future trends), and prescriptive
(recommends actions).

Big data refers to data so voluminous that

What is big data? conventional computing methods cannot
efficiently process it.

What are the 5 Vs of big data? Volume, Variety, Velocity, Veracity, and Value.

Database marketing uses an organization’s

What is database marketing? database of customers and potential customers
to promote products or services.

Tableau is a data visualization tool used for

What is Tableau? generating business intelligence through graphs
and charts.
 Power BI is a platform for analysing and
visualizing data from different sources, enabling
What is Power BI?
personalized dashboards and real-time
analytics.

A graph database uses graph structures with

nodes, edges, and properties to represent and
What is a graph database?
store data, focusing on connections between
entities.
Test: Module 3: Data and Business Intelligence

Multiple-Choice Questions
1. What is the definition of a small business according to the National Small Business Act 29 of
2004?
• A) A business that employs fewer than 50 people
• B) A separate and distinct business entity managed by one owner or more, including its
branches or subsidiaries if any
• C) Any business with an annual turnover less than R1 million
• D) A business that operates only in the informal sector
2. Which factor is most important when selecting a geographical location for a retail business?
• A) Availability of raw materials
• B) Proximity to competitors
• C) Access to the market
• D) Personal preferences
3. What is the primary advantage of a sole proprietorship?
• A) Limited liability
• B) Easy dissolution
• C) Shared decision-making
• D) High access to capital
4. Which type of business failure occurs when the opportunity cost becomes high?
• A) The owner dies
• B) The business generates less profit compared to other options
• C) The business loses money
• D) The business becomes bankrupt
5. What is the main disadvantage of a partnership?
• A) Unlimited liability
• B) Lack of continuity
• C) Difficulty in raising capital
• D) All of the above
6. Which legal form of ownership provides limited liability to its members?
• A) Sole proprietorship
• B) Partnership
• C) Close corporation
• D) Non-profit company
7. What is the purpose of a business plan?
• A) To identify the nature and context of the business opportunity
• B) To attract investors
• C) Both A and B
• D) Neither A nor B
8. Which government department provides financial support to small businesses?
• A) Department of Education
• B) Department of Trade and Industry
• C) Department of Health
• D) Department of Transport
9. What is venture capital finance?
• A) Funds raised through the sale of stock
• B) Private equity capital used as seed funding for high-growth businesses
• C) Loans from banks
• D) Crowdfunding
10. Which is not a characteristic of a juristic person?
• A) Exists independently of its members
• B) Recognized as a legal subject
• C) Affected by changes in membership
 • D) Has own rights, assets, and obligations
11. What is the primary advantage of a business trust?
• A) Extreme flexibility
• B) Unlimited liability
• C) High operational costs
• D) Public financial affairs
12. Which factor contributes significantly to small business failure?
• A) Managerial inadequacy
• B) Financial adequacy
• C) Favourable economic conditions
• D) Strong competition
13. Which type of company must have at least three directors?
• A) Private company
• B) Public company
• C) Co-operative society
• D) Business trust
14. What is the main objective of a business incubator?
• A) To provide loans to businesses
• B) To assist entrepreneurs in establishing and operating their businesses
• C) To sell products on behalf of businesses
• D) To manage public companies
15. Which component is essential in a business plan?
• A) Executive summary
• B) Cover page
• C) Marketing plan
• D) All of the above
16. Which is not a disadvantage of a close corporation?
• A) Agency problem
• B) High operational costs
• C) Membership limit
• D) Unlimited liability
17. What is crowdfunding?
• A) Raising capital by involving friends, family, and individuals collectively
• B) Loans from banks
• C) Private equity capital
• D) Government grants
18. Which legal form of ownership does not have a separate legal personality?
• A) Company
• B) Sole proprietorship
• C) Close corporation
• D) Business trust
19. What is the main advantage of a co-operative society?
• A) Economies of scale
• B) Unlimited liability
• C) Strict legal requirements
• D) High operational costs
20. What is the primary reason for the high failure rate of small businesses in South Africa?
• A) Corruption
• B) Lack of financing
• C) Inadequate education
• D) Poor government policies
True or False Questions
1. A small business is defined solely by the number of employees it has.
2. The success of retail organizations depends heavily on their geographical location.
3. A sole proprietorship offers limited liability to its owner.
4. Partnerships are easy to form but difficult to dissolve.
5. A close corporation can have unlimited members.
6. A public company must have at least seven persons to be established.
7. Business plans are developed only for external purposes.
8. Venture capital finance is typically provided by angel investors.
9. A business incubator provides both financial and non-financial support to startups.
10. A co-operative society cannot have more than five members.
11. The most problematic factor for doing business in South Africa is tax rates.
12. Angel investors usually require a share in the business they invest in.
13. A private company can list shares on the stock exchange.
14. The Companies Act 71 of 2008 allows new close corporations to be registered.
15. A non-profit company distributes profits to its members.
16. The executive summary should be written first when drafting a business plan.
17. Sources of raw materials are important factors when choosing a business location.
18. A business trust has no legal personality.
19. A public company's name ends with "(Pty) Ltd."
20. The National Development Plan aims for small businesses to create 90% of jobs by 2030.

Fill in the Missing Word Questions

1. A _______ refers to a business jointly owned by two or more people.
2. The choice of _______ location is crucial for the success of most retail organizations.
3. A small business enjoys _______ due to its ability to adapt quickly to changes.
4. The failure of small businesses is often measured by the _______ of the operation.
5. A _______ is a legal entity owned and controlled by one or more members.
6. A _______ company raises capital from the general public.
7. A business plan serves as a _______ for the development of a business.
8. _______ involves raising capital by involving friends, family, and individuals collectively.
9. A _______ society is a juristic business jointly owned and structured by farmers or consumers.
10. The _______ of a business plan holds together all the other components.
11. A _______ corporation is no longer allowed to be registered under the Companies Act 71 of
2008.
12. A _______ trust is formed through a trust deed.
13. The _______ of a business idea is critical before starting a business.
14. _______ capital finance refers to private equity capital used as seed funding for high-growth
businesses.
15. A _______ company uses its income to promote a specific purpose and does not distribute
profits.
16. _______ is the conflict of interest resulting from a relationship between employed managers
and members.
17. A _______ is a document that outlines the vision for an organization.
18. A _______ analysis includes examining Political, Economic, Social, Technological, Ecological,
and Legal factors.
19. The _______ committee must be appointed in state-owned companies.
20. A _______ is a tool used to describe and analyse a proposed venture's business model.
Answers
Multiple-Choice Questions
1. B
2. C
3. B
4. B
5. A
6. C
7. C
8. B
9. B
10. C
11. A
12. A
13. B
14. B
15. D
16. D
17. A
18. B
19. A
20. B
True or False Questions
1. False
2. True
3. False
4. True
5. False
6. True
7. False
8. False
9. True
10. False
11. True
12. True
13. False
14. False
15. False
16. False
17. True
18. False
19. False
20. True
Fill in the Missing Word Questions
1. Partnership
2. Geographical
3. agility
4. termination
5. Close corporation
6. Public
7. blueprint
8. Crowdfunding
9. Co-operative
10. Executive summary
11. Close
12. Business
13. validation
14. Venture
15. Non-profit
16. Agency problem
17. Business plan
18. PESTEL
19. Audit
20. Business Model Canvas