Essentials of Management

Information Systems
Fifteenth Edition, Global Edition

Chapter 6
Foundations of Business
Intelligence: Databases and
Information Management

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Learning Objectives
6.1 Define a database and explain how a relational
database organizes data.
6.2 Describe the principles of a database management
system.
6.3 Identify the principal tools and technologies for
accessing information from databases to improve
business performance and decision making.
6.4 Explain why data governance and data quality assurance
are essential for managing a firm’s data resources.
6.5 Understand how M I S can help your career.

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Video Case
• Stitch Fix CEO Sees Business of Personalization as Key to
Success; Stitch Fix President on Booming Growth Amid
Pandemic

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Data Insights Send Envision Virgin
Racing to the Finish Line
• Problem
– Unpredictability, from a change in the weather to a car crash
– Difficulty in analyzing radio communication records in real
time and modifying response
• Information System: Lap Estimate Optimizer
– An artificial intelligence (AI) model to instantly assess and
predict the number of laps remaining
– Improve processing of radio communication records
– Enable strategy shift instantly during races

Illustrates the use of an AI model with structured as well as

unstructured data to improve analysis and prediction

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Databases, Entities, and Attributes
• Database:
– Collection of related files containing records on people,
places, or things
• Entity:
– Generalized category representing person, place, thing
– Example: SUPPLIER, PART
• Attributes:
– Specific characteristics of each entity:
 Example: SUPPLIER name, address
 Example: PART description, unit price, supplier

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Figure 6.1 The Data Hierarchy

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Relational Databases
• Organize data into two-dimensional tables (relations) with
columns and rows
• One table for each entity:
– Example: CUSTOMER, SUPPLIER, PART, SALES
– Fields (columns) store data representing an attribute
– Rows store data for separate records, or tuples
• Key field: uniquely identifies each record
• Primary key

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Figure 6.2 A Relational Database
Table

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Figure 6.3 The PART Table

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Establishing Relationships (1 of 2)
• Entity-relationship diagram
– Used to clarify table relationships in a relational
database
• Relational database tables may have:
– One-to-one relationship
– One-to-many relationship
– Many-to-many relationship
 Requires “join table” or intersection relation that
links the two tables to join information

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Figure 6.4 A Simple Entity-
Relationship Diagram

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Figure 6.5 Sample Order Report

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Figure 6.6 The Final Database Design
with Sample Records

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Figure 6.7 Entity-Relationship
Diagram for the Database with Four
Tables

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Establishing Relationships (2 of 2)
• Normalization
– Streamlining complex groups of data
– Minimizes redundant data elements
– Minimizes awkward many-to-many relationships
– Increases stability and flexibility
• Referential integrity rules
– Ensure that relationships between coupled tables
remain consistent

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Database Management Systems
(DBMS)
• Software for creating, storing, organizing, and accessing
data from a database
• Separates the logical and physical views of the data
– Logical view: how end users view data
– Physical view: how data are actually structured and
organized on physical storage media
• Examples: Microsoft Access, IBM Db2, Oracle Database,
Microsoft SQ L Server, MySQL

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Figure 6.8 Human Resources
Database with Multiple Views

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Operations of a Relational DBMS
• Select:
– Creates a subset of all records meeting stated criteria
• Join:
– Combines relational tables to present the user with
more information than is available from individual
tables
• Project:
– Creates a subset consisting of columns in a table
– Permits user to create new tables containing only
desired information

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Figure 6.9 The Three Basic
Operations of a Relational DBMS

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Capabilities of Database Management
Systems
• Data definition: Specify structure of content of database
• Data dictionary: Stores definitions of data elements and
their characteristics
• Querying and reporting:
– Data manipulation language
 Structured query language (SQ L)
 Microsoft Access query-building tools
– Report generation:
 Examples: SQL Server Reporting Services, Oracle
Reports Builder
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Figure 6.10 Access Data Dictionary
Features

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Figure 6.11 Example of a SQL Query

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Figure 6.12 An Access Query

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Nonrelational Databases, Cloud
Databases, and Blockchain (1 of 3)
• Nonrelational databases: “NoSQL”
– Handle large data sets of data that are not easily organized
into tables, columns, and rows
– Use more flexible data model
– Can manage unstructured data, such as social media and
graphics
– Examples: Amazon’s Simple D B, Mongo DB Atlas

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Nonrelational Databases, Cloud
Databases, and Blockchain (2 of 3)
• Cloud databases:
– Pricing based on usage
– Appeal to small or medium-sized businesses
– Example: Amazon Relational Database Service (Amazon
RDS)
 Offers MySQL, Microsoft SQL Server, Oracle Database
engines
• Distributed databases
– Stored in multiple physical locations
– Google’s Spanner cloud service

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Spotlight on Technology: New Cloud
Database Tools Help Vodafone Fiji Make
Better Decisions

• Class discussion
– Define the problem faced by Vodafone Fiji. What people,
organization, and technology factors contributed to the problem?
– Evaluate Oracle Autonomous Data Warehouse and Oracle
Analytics Cloud as solutions for Vodafone Fiji.
– How did the new Oracle tools change decision making at
Vodafone Fiji?
– Was using cloud services advantageous for Vodafone Fiji?
Explain your answer.

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Nonrelational Databases, Cloud
Databases, and Blockchain (3 of 3)
• Blockchain
– Distributed database of transactions
– Operates on a network without central authority
– Maintains a growing list of records called blocks
– Once recorded, blocks cannot be changed
– Reduces cost of processing transactions and enhances
security

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Figure 6.13 How Blockchain Works

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The Challenge of Big Data
• Massive quantities of unstructured and semi-structured
data from web traffic, social media, sensors, etc.
– 3Vs: Volume, variety, velocity
– Petabytes and exabytes
• Volumes too great for typical DBMS
– Petabytes, exabytes
• Big datasets can reveal more patterns and insights than
smaller datasets, e.g.
– Customer behavior
– Weather patterns
• Requires new technologies and tools
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Business Intelligence Infrastructure
(1 of 5)
• Array of tools for obtaining useful information from internal
and external systems and big data
– Data warehouses
– Data marts
– Data lakes
– Hadoop
– In-memory computing
– Analytical platforms

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Business Intelligence Infrastructure
(2 of 5)
• Data warehouse:
– Stores current and historical data from many core
operational transaction systems
– Consolidates and standardizes data for use across
enterprise; data can be accessed but not altered
– Provides analysis and reporting tools
• Data mart:
– Subset of data warehouses; typically focused and
isolated for a specific population of users
• Data lake:
– Repository for raw, unstructured data or structured data that
for the most part has not yet been analyzed
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Business Intelligence Infrastructure
(3 of 5)
• Hadoop
– Open-source software framework for processing Big Data
– Breaks data task into sub-problems and distributes the
processing to many inexpensive computer processing
nodes
– Key services
 Hadoop Distributed File System (HDFS)
 MapReduce
 HBase: NoSQL database

• Alternative: Apache Spark

– Faster than Hadoop for small workloads

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Business Intelligence Infrastructure
(4 of 5)
• In-memory computing
• Used in Big Data analysis
– Relies on computer’s main memory (RAM) for data storage
– Eliminates bottlenecks in retrieving and reading data
– Dramatically shortens query response times
– Enabled by high-speed processors, multicore processing
– Lowers processing costs

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Business Intelligence Infrastructure
(5 of 5)
• Analytic Platforms
– Preconfigured hardware-software systems
– Designed for query processing and analytics
– Use both relational and non-relational technology to analyze
large data sets
– Include in-memory systems, NoSQL DBMS
– Example: IBM Pure Data System for Analytics

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Figure 6.14 Business Intelligence
Technology Infrastructure

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Analytical Tools: Relationships,
Patterns, Trends
• Tools for consolidating, analyzing, and providing access to
vast amounts of data to help users make better business
decisions
– Multidimensional data analysis (O LA P)
– Data mining
– Text mining
– Web mining

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Online Analytical Processing (OLAP)
• Supports multidimensional data analysis, enabling users to
view the same data in different ways using multiple
dimensions
– Each aspect of information—product, pricing, cost,
region, or time period—represents a different
dimension
– Example: How many washers sold in the East region in
June compared to the previous June and sales
forecast
• Enables users to obtain online answers to ad hoc
questions such as these in a fairly rapid amount of time

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Figure 6.15 Multidimensional Data
Model

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Data Mining
• Finds hidden patterns and relationships in large datasets
– Example: customer buying patterns
• Infers rules to predict future behavior
• Types of information obtainable from data mining
– Associations: occurrences linked to single event
– Sequences: events linked over time
– Classifications: patterns describing a group an item
belongs to
– Clustering: discovering as yet unclassified groupings
– Forecasting: uses series of values to forecast future
values
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Text Mining
• Allows businesses to extract key elements from, discover
patterns in, and summarize large unstructured data sets.
• Sentiment analysis
– Mines online text comments online or in email to
measure customer sentiment

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Web Mining
• Discovery and analysis of useful patterns and information
from the web
– E.g. to understand customer behavior, evaluate
website, quantify success of marketing
• Content mining – mines content of websites
• Structure mining – mines website structural elements, such
as links
• Usage mining – mines user interaction data gathered by
web servers

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Databases and the Web
• Many companies use the web to make some internal databases
available to customers or partners
• Typical configuration includes:
– Web server
– Application server
– Database server (hosting DBM S)
• Advantages of using the web for database access:
– Ease of use of browser software
– Web interface requires few or no changes to database
– Inexpensive to add web interface to system

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Figure 6.16 Linking Internal
Databases to the Web

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Data Governance
• Encompasses policies and procedures through which data
can be managed as an organizational resource
• Establishes organization’s rules for sharing, disseminating,
acquiring, classifying, and inventory information.
– Example: Firm information policy that specifies that only selected
members of a particular department can view certain information

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Ensuring Data Quality
• Data quality assurance especially important with today’s
organizations relying so heavily on data to drive operations
and decision making
– But not just a business problem. Also can pose serious
problems for individuals
• Data quality problems caused by:
– Redundant and inconsistent data produced by multiple
systems
– Data input errors
• Data quality audit
• Data cleansing
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Spotlight on Organizations: Higher
Data Quality Helps Vyaire Save Lives
• Class Discussion
– Identify the problem in this case study. What people,
organization, and technology factors contributed to this
problem?
– Describe the business impact of low data quality at Vyaire.
– Describe the solution Vyaire selected. What was the role of
data quality in the solution? How effective was it?

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How MIS Can Help Your Career
• The Business: Mega Midwest Power
• Position Description
• Job Requirements
• Interview Questions
• Author Tips

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