Chapter 6: Business Intelligence – Flashcards
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Business benefits of high-quality information
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• Information is everywhere in an organization • Employees must be able to obtain and analyze the many different levels, formats, and granularities of organizational information to make decisions • Successfully collecting, compiling, sorting, and analyzing information can provide tremendous insight into how an organization is performing
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4 Primary Traits that determine value of information
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1) Info type: transactional or analytical 2) Info timeliness 3) Info quality 4) Info governance
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Information Granularity
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Refers to the extent of detail within the information
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Transactional information
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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 • Ex: Airline ticket, Sales receipt, Packing slip
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Analytical information
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Encompasses all organizational information, and its primary purpose is to support the performing of managerial analysis tasks • Ex: Product statistics, Sales projections, future growth, trends
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Information Timeliness
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Timeliness is an aspect of information that depends on the situation/industry
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Real-time information
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Immediate, up-to-date information
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Real-time system
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Provides real-time information in response to requests
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Information Quality
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• Business decisions are only as good as the quality of the information used to make the decisions • You never want to find yourself using technology to help you make a bad decision faster
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Information inconsistency
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Occurs when the same data element has different values
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Information integrity issues
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When a system produces incorrect, inconsistent, or duplicate data. Data integrity issues can cause managers to consider the system reports invalid and will make decisions based on other sources
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5 characteristics common to high-quality information
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Accuracy Completeness Consistency Timeliness Uniqueness
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The four primary sources of low quality information
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• 1. Online customers intentionally enter inaccurate information to protect their privacy • 2. Different entry standards and formats • 3. Operators enter abbreviated or erroneous information by accident or to save time • 4. Third party and external information contains inconsistencies, inaccuracies, and errors
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Potential business effects resulting from low quality information include
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• Inability to accurately track customers • Difficulty identifying valuable customers • Inability to identify selling opportunities • Marketing to nonexistent customers • Difficulty tracking revenue • Inability to build strong customer relationships
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Understanding the Benefits of Good Information
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• High quality information can significantly improve the chances of making a good decision • Good decisions can directly impact an organization's bottom line
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Data governance
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Refers to the overall management of the availability, usability, integrity, and security of company data
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Database
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Maintains information about various types of objects (inventory), events (transactions), people (employees), and places (warehouses)
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Database management systems (DBMS)
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Allows users to create, read, update, and delete data in a relational database while controlling access and security
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Query-by-example (QBE) tool
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Helps users graphically design the answer to a question against a database
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Structured query language (SQL)
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Asks users to write lines of code to answer questions against a database
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Data element
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The smallest or basic unit of information
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Data model
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Logical data structures that detail the relationships among data elements using graphics or pictures
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Metadata
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Provides details about data
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Data dictionary
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Compiles all of the metadata about the data elements in the data model
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Relational Database Model
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Stores information in the form of logically related two-dimensional tables
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Entity
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A person, place, thing, transaction, or event about which information is stored o The rows in a table contain entities
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Attribute (field, column)
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The data elements associated with an entity o The columns in each table contain the attributes
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Record
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A collection of related data elements
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Primary Key
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A field (or group of fields) that uniquely identifies a given entity in a table
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Foreign key
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A primary key of one table that appears an attribute in another table and acts to provide a logical relationship among the two tables
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Benefits of relational databases
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- increased flexibility (physical and logical view of info) - increased scalability and performance - reduced information redundancy - increased information integrity - increased information security
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Increased Flexibility
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o A well-designed database should • Handle changes quickly and easily • Provide users with different views • Have only one physical view Physical view - Deals with the physical storage of information on a storage device • Have multiple logical views Logical view - Focuses on how individual users logically access information to meet their own particular business needs
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Increased Scalability and Performance
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o A database must scale to meet increased demand, while maintaining acceptable performance levels
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Scalability
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Refers to how well a system can adapt to increased demands
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Performance
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Measures how quickly a system performs a certain process or transaction
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Reduced Information Redundancy
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o Databases reduce information redundancy o Information redundancy - The duplication of data or storing the same information in multiple places o Inconsistency is one of the primary problems with redundant information
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Increase Information Integrity (Quality)
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o Information integrity - measures the quality of information o Integrity constraint - rules that help ensure the quality of information • Relational integrity constraint • Business-critical integrity constraint
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Relational integrity constraint
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Rules that enforce basic and fundamental information-based constraints
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Business-critical integrity constraint
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Enforce business rules vital to an organization's success and often require more insight and knowledge that relational integrity constraints
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Increased Information Security
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o Information is an organizational asset and must be protected o Databases offer several security features o Password - Provides authentication of the user o Access level - Determines who has access to the different types of information o Access control - Determines types of user access, such as read-only access
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Data-driven websites
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An interactive website kept constantly updated and relevant to the needs of its customers using a database
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Content creator
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A person who writes original content for a Web site.
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Content editor
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A person who is responsible for editing and maintaining website content
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Static information
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Includes fixed data incapable of change in the event of a user action
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Dynamic information
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Data that changes based on user actions, i.e reservations and tickets, data stored in a dynamic catalog
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Data-driven website advantages
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o Easy to manage content o Easy to store large amounts of data o Easy to eliminate human errors
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Data Warehouse
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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 • The data warehouse provided the ability to support decision making without disrupting the day-to-day operations
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Benefits of Data Warehousing
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- Developing customer profiles - Identifying new product opportunities - Improving business operations - Identifying financial issues - Analyzing trends - Understanding competitors - Understanding product performance
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Extraction, transformation, and loading (ETL)
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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
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Data mart
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Contains a subset of data warehouse information
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Multidimensional Analysis
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• Databases contain information in a series of two-dimensional tables • In a data warehouse and data mart, information is multidimensional, it contains layers of columns and rows
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Dimension
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A particular attribute of information
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Cube
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Common term for the representation of multidimensional information
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Information cleansing/scrubbing
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A process that weeds out and fixes or discards inconsistent, incorrect, or incomplete information
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Data quality audits
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To determine the accuracy and completeness of its data
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Data mining
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The process of analyzing data to extract information not offered by the raw data alone
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Data-mining activities
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use a variety of techniques to find patterns and relationships in large volumes of information o Classification: assigns records to one of a predefined set of classes o Estimation: determines values for an unknown continuous variable behavior or estimated future value o Affinity grouping: Determines which things go together o Clustering: Segments a heterogeneous population of records into a number of more homogeneous subgroups
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Structured data
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Already in a database or spreadsheet, where data mining occurs
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Unstructured data
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Do not exist in a fixed location and can include text documents, PDF, voice message, emails, etc.
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Text Mining
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Analyzes unstructured data to find trends and patterns in words and sentences
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Web Mining
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Analyzes unstructured data associated with websites to identify customer behavior and website navigation
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3 Most common forms of mining structured/unstructured
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- Cluster analysis - Association detection - Statistical analysis
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Cluster Analysis
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A technique used to divide an information set into mutually exclusive groups such that the members of each group are as close together as possible to one another and the different groups are as far apart as possible.
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Association detection
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Reveals the relationship between variables along with the nature and frequency of the relationships
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Market basket analysis
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Analyzes such items as websites and checkout scanner information to detect customers' buying behavior and predict future behavior by identifying affinities among customers' choices of products and services
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Statistical analysis
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Performs such functions as information correlations, distributions, calculations, and variance analysis
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Forecast
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Predictions made on the basis of time-series information
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Time-series information
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Time-stamped information collected at a particular frequency
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The Problem: Data Rich, Information Poor
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• Businesses face a data explosion as digital images, email in-boxes, and broadband connections doubles by 2010 • The amount of data generated is doubling every year • Some believe it will soon double monthly
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The Solution: Business Intelligence
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• Improving the quality of business decisions has a direct impact on costs and revenue • BI enables business users to receive data for analysis that is: Reliable, Consistent, Understandable, Easily manipulated
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Visual Business Intelligence
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Informing, Infographics, Data visualization
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Informing
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Accessing large amounts of data from different management information systems
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Infographics
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Displays information graphically
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Data visualization
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Allows users to "see" or visualize data to transform information into a business perspective
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Data visualization tools
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Sophisticated analysis techniques such as pie charts, controls, instruments, maps, time-series graphs, and more
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Business Intelligence Dashboards
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Track corporate metrics such as critical success factors and key performance indicators and include advanced capabilities such as interactive controls allowing users to manipulate data for analysis.
