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Chapter 6 McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. CHAPTER 6: LEARNING OUTCOMES Chapter 6 1. 2. 3. 4. 5. 6. 7. 8. Explain the four primary traits that determine the value of information. Describe a database, a database management system, and the relational database model. Identify the business advantages of a relational database. Explain the business benefits of a data-driven website. Define a data warehouse and provide a few reasons it can make a manager more effective. Explain ETL and the role of a data mart in business. Define data mining and explain the three common forms for mining structured and unstructured data. Identify the advantages of using business intelligence to support managerial decision making. 6-2 THE BUSINESS BENEFITS OF HIGH-QUALITY INFORMATION Chapter 6 • Successfully collecting, compiling, sorting, and analyzing information can provide tremendous insight into how an organization is performing • Information Type: Transactional and Analytical • Transactional Information—Encompasses all of the information contained within a single business process or unit of work, and its primary purpose is to support the performing of daily operational tasks • Analytical Information—Encompasses all organizational information, and its primary purpose is to support the performing of managerial analysis tasks 6-3 THE BUSINESS BENEFITS OF HIGH-QUALITY INFORMATION Chapter 6 • Information Timeliness Real-time Information—Immediate, up-to-date information Real-time System—Provides real-time information in response to requests. • Information Quality Common characteristics of high-quality information: o Accurate, Complete, Consistent, Unique, and Timely • Information Governance Data governance 6-4 STORING INFORMATION IN A RELATIONAL DATABASE MANAGEMENT SYSTEM Chapter 6 • Database—Maintains information about various types of objects, events, people, and places • Database Management Systems (DBMS)—Allows users to create, read, update, and delete data in a relational database • Data Element—The smallest or basic unit of information • Data Model—Logical data structures that detail the relationships among data elements using graphics or pictures • Metadata—Provides details about data • Data Dictionary—Compiles all of the metadata about the data elements in the data model 6-5 STORING INFORMATION IN A RELATIONAL DATABASE MANAGEMENT SYSTEM Chapter 6 • Storing Data Elements in Entities and Attributes Entity—A person, place, thing, transaction, or event about which information is stored Attribute—The data elements associated with an entity Record—A collection of related data elements • Creating Relationships Through Keys Primary Key—A field (or group of fields) that uniquely identifies a given entity in a table Foreign Key—A primary key of one table that appears an attribute in another table and acts to provide a logical relationship among the two tables 6-6 USING A RELATIONAL DATABASE FOR BUSINESS ADVANTAGES Chapter 6 • Increased Flexibility A database needs to handle changes quickly and easily, just as any business needs to be able to do o o Physical View—Deals with the physical storage of information on a storage device Logical View—Focuses on how individual users logically access information to meet their own particular business needs • Increased Scalability and Performance Scalability—Refers to how well a system can adapt to increased demands Performance—Measures how quickly a system performs a certain process or transaction 6-7 USING A RELATIONAL DATABASE FOR BUSINESS ADVANTAGES Chapter 6 • Reduced Data Redundancy Data Redundancy—The duplication of data or storing the same information in multiple places Inconsistency is one of the primary problems with redundant information • Increased Information Integrity (Quality) Information Integrity—Measures the quality of information Integrity Constraint—Rules that help ensure the quality of information o o Relational integrity constraint Business-critical integrity constraint 6-8 USING A RELATIONAL DATABASE FOR BUSINESS ADVANTAGES Chapter 6 • Increased Information Security Information is an organizational asset and must be protected • Databases offer several security features: Password—Provides authentication of the user Access Level—Determines who has access to the different types of information Access Control—Determines types of user access, such as read-only access 6-9 DRIVING WEBSITES WITH DATA Chapter 6 • Data-Driven Websites—An interactive website kept constantly updated and relevant to the needs of its customers using a database • Data-driven website advantages: Easy to manage content Easy to store large amounts of data Easy to eliminate human errors 6-10 THE BUSINESS BENEFITS OF DATA WAREHOUSING Chapter 6 • Data warehouses extend the transformation of data into information • The data warehouse provided the ability to support decision making without disrupting the day-to-day operations • Data Warehouse—A logical collection of information – gathered from many different operational databases – that supports business analysis activities and decision-making tasks • The primary purpose of a data warehouse is to aggregate information throughout an organization into a single repository for decision-making purposes 6-11 PERFORMING BUSINESS ANALYSIS WITH DATA MARTS Chapter 6 • Extraction, Transformation, and Loading (ETL)—A process that extracts information from internal and external databases, transforms the information using a common set of enterprise definitions, and loads the information into a data warehouse • Multidimensional Analysis Dimension—A particular attribute of information Cube—Common term for the representation of multidimensional information • Information Cleansing or Scrubbing—A process that weeds out and fixes or discards inconsistent, incorrect, or incomplete information 6-12 UNCOVERING TRENDS AND PATTERNS WITH DATA MINING Chapter 6 • Data Mining—The process of analyzing data to extract information not offered by the raw data alone • Data-mining Tools—Use a variety of techniques to find patterns and relationships in large volumes of information • Structured Data—Data already in a database or a spreadsheet • Unstructured Data—Data does not exist in a fixed location and can include text documents, PDFs, voice messages, emails • Text Mining—Analyzes unstructured data to find trends and patterns in words and sentences • Web Mining—Analyzes unstructured data associated with websites to identify consumer behavior and website navigation 6-13 UNCOVERING TRENDS AND PATTERNS WITH DATA MINING Chapter 6 • Cluster Analysis—A technique used to divide an information set into mutually exclusive groups • Association Detection—Reveals the relationship between variables along with the nature and frequency of the relationships Market Basket Analysis • Statistical Analysis—Performs such functions as information correlations, distributions, calculations, and variance analysis Forecast and Time-Series Information 6-14 SUPPORTING DECISIONS WITH BUSINESS INTELLIGENCE Chapter 6 • The Problem: Data Rich, Information Poor Businesses face a data explosion as digital images, email in-boxes, and broadband connections doubles every year • The Solution: Business Intelligence BI enables business users to receive data for analysis that is: o o o o Reliable Consistent Understandable Easily Manipulated 6-15