Business Intelligence and

Data Mining
 Part1
Business Intelligence

1. Introduction to Business Intelligence

2. Data warehousing
3. Data warehouse Design
4. Multidimensional Analysis: OLAP
5. ERP Systems
 1. Introduction to Business Intelligence

• Decision Making Process

• What is BI?
• Why BI?
• BI and Web
• Data analysis problems
 Decision making Process
BI motivation
• Decision making at different levels
– Operational
• Related to daily activities with short-term effect
• Structured decisions taken by lower management
– Tactical
• Semi-structured decisions taken by middle management
– Strategic
• Long-term effect
• Unstructured decisions taken by top management
• Decision making steps include
– Problem identification,
– Finding alternative solutions,
– Making a choice
• Information and knowledge form the backbone of the decision making
process
• Decision Support : IT help executives,
managers and analysts make faster & better
Decisions
• Decision-making speed is an important success
factor in the information economy
• The problem is to find the right information and
analyze it
Data-Information-Knowledge Decision Making
USER
Intelligence
Information :
Basis of

DATA: Knowledge:
produce used for

Actions: Decisions
generate Making: trigger
 What is BI?
Business Intelligence (BI) is
1. a broad category of TECHNOLOGIES that allows for
gathering, storing, accessing & analyzing data to help
business users make better decisions and analyzing
business performance through data-driven insight:
Understanding the past and predicting the future….
• Data Warehousing (DW)
– On-Line Analytical Processing (OLAP)
– Data Mining (DM)
– Data Visualization (VIS)
– Decision Analysis (what-if)
– Customer Relationship Management (CRM)
– Benchmarking
– Text Mining
– Predictive Analysis: (Linear Regression)
2. a broad category of APPLICATIONS , which include the activities of
• decision support systems
• query and reporting
• online analytical processing (OLAP)
• statistical analysis, forecasting, and data mining.

“[BI] refers to a set of tools and techniques that enable a company to

transform its business data into timely and accurate information for
the decisional process, to be made available to the right persons in the
most suitable form.” from Encyclopedia of Database Systems
BI Versus Artificial Intelligence (AI)
– AI systems make decisions for the users
– BI systems help users make the right decisions, based on the available data
– Many BI techniques have roots in AI, though
 BI Queries: examples
Q1: On October 11, 2000, find the 5 top-selling products for each
product subcategory that contributes more than 20% of the sales within
its product category.
• Q2: As of March 15, 1995, determine shipping priority and potential
gross revenue of the orders that have the 10 largest gross revenues
among the orders that had not yet been shipped. Consider orders from
the book market segment only.
• If inventory level drop by 10%, what customers might shop
elsewhere?
• can customer profile changes support high priced products?

== Regular database models and systems are not suitable for this
type of queries.!!!! If possible VERY COSTLY!!!
 Why is BI Important?

• Worldwide BI revenue in 2005 = US$ 5.7 billion

- 10% growth each year
- A market where players like IBM, Microsoft,
Oracle, and SAP compete and invest
• BI is not only for large enterprises
- Small and medium-sized companies can also benefit
from BI
• The financial crisis has increased the focus on BI
- You cannot afford not to use the “gold” in your data
 BI and WEB
1. The Web made BI more necessary (Electronic Commerce):
– Customers do not appear ”physically” in the store
– Customers can change to other stores more easily
2. Thus:
– You have to know your customers using data and BI.
– Web logs makes it possible to analyze customer behavior in a more
detailed than before (what was not bought? Behavior? Preferences?....)
– Combine web data with traditional customer data
3. Wireless Internet adds further to this:
– Customers are always ”online”
– Customer’s position is known
– Combine position and customer knowledge => very valuable GIS
4. The BIG DATA made BI more than never mandatory!!!!!
 Key analysis Problems?
1) Complex and unusable models
– Many DB models are difficult to understand (normalization is a two fold process :
negative and positive)
– DB models do not focus on a single clear business purpose (subject: functional area)
2) Same data found in many different systems
– The same concept is defined differently
Example: customer data across different stores and departments
3. Heterogeneous sources
Relational DBMS, On-Line Transaction Processing (OLTP)
Unstructured data in files (e.g., MS Word)
Legacy systems

4) Data is suited for operational systems

– Accounting, billing, etc.
– Do not support analysis across business functions
4) Data quality is bad
– Missing data, imprecise data, different use of systems
5) Data are ”volatile”
– Data deleted in operational systems (6 months)
– Data change over time – no historical information
Solution:
a new analysis environment

DATA WAREHOUSE where Data are:

– Subject oriented (versus function oriented)
– Integrated (logically and physically)
– Time variant (data can always be related to time)
– Stable (data not deleted, several versions)
– Supporting management decisions (different organization)
• Data from the operational systems are
– Extracted
– Cleansed
– Transformed
– Aggregated (?)
– Loaded into the DW
• A good DW is a prerequisite for successful Business Intelligence
 BI Processes
Making Decisions

Data Presentation
( visualisation Techniques)
|
Data Mining (KDD?)
(Knowledge Dicovery)
|
Data Exploration
(OLAP, Statistical Analysis, Querying , Reporting…)
|
Data Warehouse/Data Marts (BDD)
|
Data Sources
(BDs, Files, Web, clients, suppliers, Documents, OLTP…..etc)
 BI Layers
Reporting Analysis

Presentation /Reporting Layer Cubes

Warehouse Layer

DW

Source System Layer

Reports External CRM HR

Data
 2. Datawarehousing
• Introduction
• What is DW?
• Data Integration
• Data Marts
• DW Architecture
• DW vs. DBMS
 Introduction

Transaction DB = Operational DB
OLTP (On-Line Transactional Processing)

– Simple Queries (access to a part of DB)

– Frequent queries
– Many users

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 Relationnel Models
(Reminder)

– Data Coherence and integrity

– Frequent Updates …
– Concurrent access management
– Many and ”small” queries
– The system is always available for both updates and reads
– Smaller data volume (few historical data)
– Complex data model (normalized)

– Examples
➲ Inventory Management (Sales )
➲ Human resources Management
➲ Library
➲ Billing……
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 Operational DBs: Limitations

• Do not support decision making

(many joins are very costly !!!!)
• Complex queries are not supported
• No data Navigation for analytical purposes is
possible
• SQL knowldge is mandatory for data
manipulation

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 Decision Support DBs
Starting 1990 need for analysis support systems:

➲ Data volume is increasing !!!

– Need for computer based systems to process data for decision making
– Business needs are more complex
➲ Provide analytical tools for decision makers:
improve enterprise decision performance

● Reporting: Report generation: what happened? What is happening ? Why did it happened ? Why
will happen?
● Navigation: navigate on data for analytical purposes
● Knowledge extraction: Data Mining :(Patterns)

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 Decision support queries

➲ Complex
➲ Decision makers (few users)
➲ Data aggregation levels:
• Product: Product->Type->Category
• Store: Store->Area->City->County
• Time: Day->Month->Quarter->Year
➲ Fewer, but ”bigger” queries
➲ Frequent reads, in-frequent updates (daily)
➲ 2-phase operation: either reading or updating
➲ Larger data volumes (collection of historical data)
➲ Simple data model (multidimensional/de-normalized)

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 Examples of decision support queries

1. Socio professional category of best customers by region

2. Evolution of market share of a particular product
3. Number of employees by age, gender and by rank.
4. What is the profile of the most performant employees?
5. What are the components of machines with the largest number of unpredictable accidents

during the period of 1992-97 ?

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 DATA WAREHOUSE?
Solution: a new analysis environment (a data
warehouse) where data is
– Integrated (logically and physically)
– Subject oriented (versus function oriented)
– Supporting management decisions (different
organization)
– Non Volatile: Stable (data not deleted, several
versions)
– Time variant (data can always be related to time)

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 Subject oriented
•Organized around major subjects, such as customer, product, sales.
• Data are arranged to provide answers to questions coming from diverse functional
areas within a company. (sales, marketing, finance…) # functional or process oriented.
• data are summarized by topic (sales; marketing, …) for each topic the DW contains specific subject of interest: products, clients, departments,
regions…

Time Variant
Once data are periodically uploaded to the DW, all time dependant aggregations are
recomputed. (Exp. Weekly sales are updates => monthly sales are also updated)
Non volatile

When data enter the DW, they are never removed. Requires only two

operations in data accessing: initial loading of data and

access of data.
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Subject Orientation
 Data Integration
• Constructed by integrating multiple, heterogeneous
data sources
– relational databases, flat files, on-line transaction records
• Data cleaning and data integration techniques are
applied.
– Ensure consistency in naming conventions, encoding
structures, attribute measures, etc. among different data
sources
• E.g., Hotel price, currency, tax, breakfast covered, etc.
– When data is moved to the warehouse, it is converted.
 Data Integration

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 Query-Driven Data Integration

• Data is integrated on demand (lazy)

– PROS
• Access to most up-to-date data (all source data directly available)
• No duplication of data
– CONS
• Delay in query processing
• Slow or unavailable information sources
• Complex filtering and integration
• Inefficient and expensive for frequent queries
• Competes with local processing at sources
• Data loss at the sources (e.g., historical data) cannot be
recovered
– Has not caught on in industry
 Warehouse-Driven Data Integration

• Data is integrated in advance (eager)

• Data is stored in DW for querying and analysis
– PROS
• High query performance
• Does not interfere with local processing at sources
• Assumes that data warehouse update is possible during downtime
of local processing
• Complex queries are run at the data warehouse
• OLTP queries are run at the source systems
– CONS
• Duplication of data
• The most current source data is not available
• Has caught on in industry
 Data marts
Data Warehouse vs. Data Marts
• Enterprise warehouse: collects all information about
subjects (customers, products, sales, assets,
personnel) that span the entire organization
– Requires extensive business modeling (may take years to
design and build)
• Data Marts: Departmental subsets that focus on
selected subjects
– Marketing data mart: customer, product, sales
– Faster roll out, but complex integration in the long run
 Reasons for creating a data mart
Example: marketing DataMart: Used to store and generate customer related
information. Such as customer purchasing behaviors, it also permits to keep track of
product profitability and determine the impact of marketing campaign on clients…...
Other examples: HR DataMart, Finance DataMart …...

1. Easy access to frequently needed data

2. Creates collective view by a group of users
3. Improves end-user response time
4. Ease of creation
5. Lower cost than implementing a full Data warehouse
6. Potential users are more clearly defined than in a full Data
warehouse
 Reasons for creating a data mart
Example: marketing DataMart: Used to store and generate customer related
information. Such as customer purchasing behaviors, it also permits to keep track of
product profitability and determine the impact of marketing campaign on clients…...
Other examples: HR DataMart, Finance DataMart …...

1. Easy access to frequently needed data

2. Creates collective view by a group of users
3. Improves end-user response time
4. Ease of creation
5. Lower cost than implementing a full Data warehouse
6. Potential users are more clearly defined than in a full Data
warehouse
Data Warehouse: A Multi-Tiered Architecture

Monitor
Metadata & OLAP Server
Other
sources Integrator
Analysis
Query
Operational Extract
Serve Reports
DBs Transform Data
Data mining
Load Warehouse
Refresh

Data Marts

Data Sources Data Storage OLAP Engine Front-End Tools

 DW vs. Operational DBMS
• OLTP (on-line transaction processing)
– Major task of traditional relational DBMS
– Day-to-day operations: purchasing, inventory, banking, manufacturing,
payroll, registration, accounting, etc.
• OLAP (on-line analytical processing)
– Major task of data warehouse system
– Data analysis and decision making
• Distinct features (OLTP vs. OLAP):
– User and system orientation: customer vs. market
– Data contents: current, detailed vs. historical, consolidated
– Database design: ER + application vs. star + subject
– View: current, local vs. evolutionary, integrated
– Access patterns: update vs. read-only but complex queries
 OLTP vs. OLAP
Feature Op. DB DW
Transaction production, management analysis, decision support
Data Model E/R Model; 3NF… Star, Snow flake model
Normalization frequent very rare in data marts
Data Updated , raw historical, aggregated, summary
elementary, atomic
Updates immediate, real time always in batch processing
Integration level medium high
Perception bidimensional multidimensional
Operationsread, write, modify , read , analysis, delete
refreshing
size in Gigabytes in Terabytes
Data currency current operations historic data, time component
(week, month, year)
Query complexity simple to medium very complex
 3. Datawarehouse Design
• DW Design Major Steps
• Basic Concepts
– Facts and Dimensions
– Star, Snowflake and constellation models
• Modelling case studies: Exercises
 DW Design Major Steps
• Requirement Gathering
Concrete definition of user requirements such as hardware sizing information, training requirements, data source
identification, and most importantly, a concrete project plan indicating the finishing date of the data warehousing project.
Deliverables :
A list of reports / cubes to be delivered to the end users.
An updated detailed project plan.
• Physical Environment Setup
Set up the physical servers and databases.
Deliverables: Hardware / Software setup document for all of the environments (hardware specifications, and scripts / settings for
the software)
• Data Modeling
deliverables: Conceptual, physical data model
• ETL
The ETL (Extraction, Transformation, Loading) process. 50% design time because
• Get the source data, understand the necessary columns, business rules, the logical and physical data models.
Deliverable:
ETL Script / ETL Package and Data Mapping Document
• OLAP Cube Design
specify the exact report / analysis users want to see
Deliverables:
Documentation specifying the OLAP cube dimensions and measures.
Actual OLAP cube / report.
 Basic Concepts:
Facts, Dimensions and Measures
Data is organized in subjects: sales, clients, products, …..
Data is divided into:
– Facts
– Dimensions = subject = facts + dimensions
• Exemple: Sales (N°sale  product, period, store)
• Goal for multidimensional modeling:
– Surround facts with as much context (dimensions) as possible
– Hint: redundancy may be ok (in well-chosen places)
– But you should not try to model all relationships in the data (unlike
E/R and OO modeling!)

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 Facts
Definition:
• The fact is a business metric (i.e., numerical
measurement) of the enterprise activity: (ie: sales,
profit, ……transaction)
• Facts should be numeric, have a value, and be additive.
Exemple : sales: each record represents total sales of a
product, by store, by day Facts represent the subject of
the desired analysis Fact Table : relates many dimension
tables

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 Facts types
Event Fact (transaction)
– A fact for a business event (sales)
Snapshot Fact
– A fact for combinations of dimensions during an
interval of time (Current inventory status/period,
store, region).
•Granularity of a fact ?:
– What does a single fact mean?
– Level of detail: sale: customer transaction or an
individual item purchase ?
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 Dimensions
Definiton:
A dimension represents a single set of objects or events in the real world. Each
dimension that you identify for the data model gets implemented as a dimension table.
Dimensions are the qualifiers that make the measures of the fact table meaningful,
because they answer the what, when, and where aspects of a question :
Exp1: Date (DateKey, Date, DayOfWeek, CalMonth, CalYear, Holiday)

Dimensions describe facts

A sale has the dimensions Product, Store and Time

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 Measures

Measures represent the fact property that the

user wants to study, analyze and optimize
(Example: sales total amount)
A measure has tow components:
– Value : (sales price, units sold, ……)
– Aggregation formula (SUM): used to group many
measures in one.

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 DW Design
Star Schema

• A common approach to draw a dimensional

model is the star schema.
• The star schema shows a fact table and
dimension tables.
• For each table we specify the attributes.
Sales Facts: DateKey, ProductKey, CityKey
Date Dimension: DateKey, Year
Product Dimension : ProductKey, Product name
City Dimension: CityKey, CityName
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In a star schema, the central table which contains
the individual facts being stored in the database.
There are two types of fields in a fact table:
1. The fields storing the foreign keys which
connect each particular fact to the appropriate
value in each dimension.
2. The fields storing the individual facts (or
measures) - such as number, amount, or price.

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 Example of Star Schema
time
time_key item
day item_key
day_of_the_week Sales Fact Table item_name
month brand
quarter time_key type
year supplier_type
item_key
branch_key
branch location
location_key
branch_key location_key
branch_name units_sold street
branch_type city
dollars_sold state_or_province
country
avg_sales
Measures
 Snow flake Schema
Refining of Star Schema with normalized dimension tables.
Product
IDprod Supplier
description ID-sup
color description
Sales size type
ID-sup Address

Advantages
– Avoid redundancy
– Leads to constellations (many fact tables sharing the same dimensions)

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 Example of Snowflake Schema
time
time_key item
day item_key supplier
day_of_the_week Sales Fact Table item_name supplier_key
month brand supplier_type
quarter time_key type
year item_key supplier_key

branch_key
branch location
location_key
location_key
branch_key
units_sold street
branch_name
city_key
branch_type
dollars_sold city
city_key
avg_sales city
state_or_province
Measures country 48
 Example of Fact Constellation
time
time_key item Shipping Fact Table
day item_key
day_of_the_week Sales Fact Table item_name time_key
month brand
quarter time_key type item_key
year supplier_type shipper_key
item_key
branch_key from_location

branch location_key location to_location

branch_key location_key dollars_cost
branch_name units_sold
street
branch_type dollars_sold city units_shipped
province_or_state
avg_sales country shipper
Measures shipper_key
shipper_name
location_key
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shipper_type
 DW Design:
Wholesale furniture company
Exercise 1
Design the data warehouse for a wholesale furniture company. The data
warehouse has to allow to analyze the company’s situation at least with
respect to the Furniture, Customers and Time.
Moreover, the company needs to analyze:
•The furniture with respect to its type (chair, table, ward robe, cabinet. . . ),
category (kitchen, living room, bedroom,bathroom, office. . . ) and material
(wood, marble. . . )
•The customers with respect to their spatial location, by
considering at least cities, regions and states
The company is interested in learning at least the quantity, income and
discount of its sales.

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 Questions
1) Identify facts, dimensions and measures
2) For each fact:
– produce the attributes
– design the star or snowflake schema and write the following
– SQL queries:
• Find the quantity, the total income and discount with respect to
each city, type of furniture and the month
• Find the average quantity, income and discount with respect to
each country, furniture material and year
• Determine the 5 most sold furnitures during the May month

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 Exercise 2
Insurance company

An insurance company requires the data warehouse design for accidents

analysis of its customers. In particular, the company requires to evaluate the
type of accidents related to customers and the type of policies.
Goal:
– Evaluate the history of accidents w.r.t. the policies and the customers
– Evaluate the history of policies w.r.t. the customers by
considering the risk type and the policy amount
Questions: Design the Data Warehouse for the two problems
(accident and risk analysis)
– Facts, measures and dimensions?
– Star Schema for the company DW
– Suggest DW possible queries to satisfy the goals and express them in
SQL

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 Exercise 3
Consider the following relational database schema of an international airport:
FLIGHT (IDF, Company, DepAirport, ArrAirport, DepTime,
ArrTime)
FLYING (IDFlight, FlightDate)
AIRPORT (IDAirport, AirName, City, State)
TICKET (Number, IDFlight, FlightDate, Seat, Rate, Name, Surname, Sex)
CHECK-IN (Number, CheckInTime, LuggageNr)
Design the Data Warehouse for the analysis of the flights of the
airport:
1) Suggest facts, measures and dimensions
2) Define the fact schema:

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 Multidimensional Analysis
OLAP
Example: sales of supermarkets
• Facts and measures
Each sales record is a fact, and its sales value is a measure
• Dimensions
– Group correlated attributes into the same dimension
– easier for analysis tasks
• Each sales record is associated with its values of Product, Store, Time

Product Type Category Store City Region Date

Sales
P1 Food Beverage S1 Rabat RabatSalé 25 May, 2009 5.75
PRODUCT STORE TIME
• How do we model the Time dimension?
Hierarchies with multiple levels
Attributes, e.g., holiday, event
tid day day # week# month# year work day
1 January 1 1 1 2009 No
1st 2009
-------------------------------------------------------------------------------------------
2 January 2 1 1 2009 Yes
2nd 2009
‘’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’
• Advantage of this model?
Easy for query (more about this later)
• Disadvantage?
Data redundancy (but controlled redundancy is acceptable)
 Cubes

• Facts “live” in a multidimensional cube

Think of an array from programming languages
• A “cube” may have many dimensions.
– More than 3 - the term ”hypercube” is sometimes used
– Theoretically no limit for the number of dimensions
– Typical cubes have 4-12 dimensions
• But only 2-3 dimensions can be viewed at a time
• A cube consists of cells
– A given combination of dimension values
– A cell can be empty (no data for this combination)
– A sparse cube has few non-empty cells
– A dense cube has many non-empty cells
– Cubes become sparser for many/large dimensions

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 Store Product Time Sales
Aalborg Bread 2000 57
Aalborg Milk 2000 56
Copenhagen Bread 2000 123

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 Multidimensional OLAP
(MOLAP)
• Data stored in special multidimensional data structures
• E.g., multidimensional array on hard disk
– MOLAP data cube
– Pros
• Less storage use (“foreign keys” not stored)
• Faster query response times
– Cons
• Up till now not so good
• Less scalability
• Less flexible, e.g., cube must be re-computed when design changes
• Does not reuse an existing investment (but often bundled with RDBMS)
d2 /d1 1 2 3
1 0 4 9
2 3 2 0
3 2 1 4
 Hybrid OLAP
(HOLAP)

– Detail data stored in relational tables (ROLAP)

– Aggregates stored in multidimensional structures
(MOLAP)
• Pros
Scalable (as ROLAP)
Fast (as MOLAP)
• Cons
High complexity
 Typical OLAP Operations
• Slice and dice:
– project and select
• Roll up (drill-up): summarize data
– by climbing up hierarchy or by dimension reduction
• Drill down (roll down): reverse of roll-up
– from higher level summary to lower level summary or detailed data, or introducing new dimensions
• Pivot (rotate):
– Rotates the data axis to view the data from different perspectives.
– Groups data with different dimensions.
• Cross-tab
– Spreadsheet style row/column aggregates.

Other operations
• drill across:
– Accesses more than one fact table that is linked by common dimensions.
– Combines cubes that share one or more dimensions.
• drill through:
– Drill down to the bottom level of a data cube down to its back-end relational tables.
 Slicing

Slicing: selection part of the cube based on

condition on dimension:
• We specify one fixed value for each dimension.
• Exemple: Slice (2004) : only the 2004 cube part is kept.

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 Exemple : Slicing

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 Slicing: Example
Attendance fact table

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 Jill Slice from
the attendance table

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 SQL Slicing and Dicing
Exercise 1: Sql query to build « jack » slice?

Exercise 1: solution
select course, avg(grade)
from attendance
where student = ’Jack’
group by course,discipline,faculty

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 Dicing
Dicing refers to range selection in multiple dimensions.
( Exp: select range 2-3 for dims 1 and 2,
select range 1-2 for dim 3.

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 Exemple : Dice

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 Dicing in SQL
Example
Exercise 1: the selection of courses between DB and AMIS and students whose names start letter
is between A and C?

Exercise2: Sql query to build a dice :

Solution:
select * from attendance where course between ’CMP370’ and ’CMP537’ and student_name
between ’A*’ and ’C*’

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Drill Down
Slice and Dice
 Attendance Table

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 Pivot and CrossTabs

Some operations are concerned with

information display.
•Pivot: choose which dimensions to show in a
(usually) 2-d rendering.
•Cross-tabs: spreadsheet-style row/column
aggregates.

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 Pivot
Example

Registrar cube:
Session×Student x Forcredit Grade
Pivot choosing Student for x and Session for y
Jill Jack Al
Spring’03 42 76
Summer’03 87 89 20

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 Pivot, showing > 2 dimensions

You can pack several dimensions onto one display

axis.
(Typically, by Cartesian product).
Pivot choosing Student and ForCredit for x and
Session for y
Jill Jack Al
Yes No Yes No Yes No
Spring’03 42 76
Summer’03 86 88 89 38 2
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 Pivot with CrossTabs example

Jill Jack Al Avg

Spring’03 42 76 47.8
Summer’03 87 89 20 39.4
Avg 87 51.4 29.3 42.9

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