Chapter 6McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

Chapter 6

6-6-22

1. Explain the four primary traits that determine the value of information.

2. Describe a database, a database management system, and the relational database model.

3. Identify the business advantages of a relational database.

4. Explain the business benefits of a data-driven website.5. Define a data warehouse and provide a few reasons it

can make a manager more effective.6. Explain ETL and the role of a data mart in business.7. Define data mining and explain the three common

forms for mining structured and unstructured data.8. Identify the advantages of using business intelligence

to support managerial decision making.

CHAPTER 6: LEARNING OUTCOMES

Chapter 6

6-6-33

THE BUSINESS BENEFITS OF HIGH-QUALITY INFORMATION

• 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

Chapter 6

6-6-44

THE BUSINESS BENEFITS OF HIGH-QUALITY INFORMATION

• 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

Chapter 6

6-6-55

• 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

STORING INFORMATION IN A RELATIONAL DATABASE MANAGEMENT SYSTEM

Chapter 6

6-6-66

STORING INFORMATION IN A RELATIONAL DATABASE MANAGEMENT SYSTEM

• 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

Chapter 6

6-6-77

USING A RELATIONAL DATABASE FOR BUSINESS

ADVANTAGES• Increased Flexibility

A database needs to handle changes quickly and easily, just as any business needs to be able to doo Physical View—Deals with the physical storage of

information on a storage deviceo 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

Chapter 6

6-6-88

USING A RELATIONAL DATABASE FOR BUSINESS

ADVANTAGES• 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 informationo Relational integrity constrainto Business-critical integrity constraint

Chapter 6

6-6-99

USING A RELATIONAL DATABASE FOR BUSINESS

ADVANTAGES

• 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

Chapter 6

6-6-1010

DRIVING WEBSITES WITH DATA

• 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

Chapter 6

6-6-1111

THE BUSINESS BENEFITS OF DATA WAREHOUSING

• 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

Chapter 6

6-6-1212

PERFORMING BUSINESS ANALYSIS

WITH DATA MARTS• 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

Chapter 6

6-6-1313

UNCOVERING TRENDS AND PATTERNS WITH DATA MINING

• 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

Chapter 6

6-6-1414

• 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

UNCOVERING TRENDS AND PATTERNS WITH DATA MINING

Chapter 6

6-6-1515

SUPPORTING DECISIONS WITH

BUSINESS INTELLIGENCE• 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 Reliableo Consistento Understandableo Easily Manipulated