Chapter 9

Organizational information

ü Employees must be able to obtain and analyze to many different levels, formats and granu larities of organizational information to make decision

ü Successfully collecting, compiling, sorting and analyzing information can provide tremendous insight into how an organization is performing

The value of timely information

ü Timeliness is an aspect of information that depends on the situation :

-         Real-time information – immediate up-to-date information

-         Real-time system – provides real-time information in response to query requests

The value of quality information

ü Business decisions are only as good as the quality of the information used to make the decisions

ü You never want to find yourself using technology to help you make a bad decision faster

ü Characteristic of high-quality information include :

-         Accuracy

-         Completeness

-         Consistency

-         Uniqueness

-         Timeliness

Understanding the cost of poor information

ü The four primary sources of low quality information include :

I.            Online customers intentionally enter inaccurate information to protect their privacy

II.            Information from different systems have different entry standards and formats

III.            Call centre operators enter abbreviated or erroneous by accident or to save time

IV.            Third party and external information contains inconsistencies, inaccuracies and errors

ü Potential business effects resulting from low quality information include :

-         Inability to accurately track customers

-         Difficulty identifying valuable customers

-         Inability to identify selling opportunities

-         Marketing to nonexistent customers

-         Difficulty tracking revenue due to inaccurate invoices

-         Inability to build strong customer relationship

·        Understanding the benefits of good information

ü High quality information can significantly improve the chances of making a good decision

ü Good decision can directly impact an organization’s bottom line

DECISION MAKING

Reasons for the growth of decision making information systems

-people need to analyze large amounts of information

-people must take decision quickly

-people must apply sophisticated analysis techniques, such as modelling and foresting, to make good decisions

-people must protect the corporate asset of organizational information

MODEL

A simplified representation or abstraction of reality

IT SYSTEMS IN AN ENTERPRISE

EXECUTIVES - EXECUTIVE INFORMATION SYSTEM (EIS)

MANAGERS - DECISION SUPPORT SYSTEMS (DSS)

ANALYSIS – TRANSACTION PROCESSING SYSTEMS (TPS)

TRANSACTION PROCESSING SYSTEMS

-Moving up through the organizational pyramid users move from requiring transactional information to analytical information

-Transaction processing system – the basic business system that serves the operational level (analysts) in an organization

-Online transaction processing (OLTP) – the capturing of transaction and event information using technology to (1) process the information according to defined business rules, (2) store the information, (3) update existing information to reflect the new information

-Online analytical processing (OLAP) – the manipulation of information to create business intelligence in support of strategic decision making

DECISION SUPPORT SYSTEMS

-Decision support systems (DSS) – models information to support managers and business professionals during the decision-making process

-Three quantitative models used by DSSs include :

1. Sensitively analysis – the study of the impact that changes in one (or               more) parts of the model have on other parts of the model

2. What-if analysis – checks the impact of a change in an assumption on the proposed solution

3. Goal-seeking analysis – finds the inputs necessary to achieve a goal such as a desired level of output

EXECUTIVE INFORMATION SYSTEMS

-Executive information system (EIS) – a specialized DSS that supports senior level executives within the organization

-most EISs offering the following capabilities :

1.consolodation– involves the aggregation of intelligent system that mimics the evolutionary, survival-of-the-fittest process to generate increasingly better solutions to a problem

2.drill-down – enables, users to get details and details of details, of information

3.slice-and-dice – looks at information from different perspectives

ARTIFICIAL INTELLIGENCE

-INTELLIGENT SYSTEM – various commercial applications of artificial intelligence

-ARTIFICIAL INTELLIGENCE (AI) – Simulates human intelligence such as the ability to reason and learn

-advantages: can check info on competitor

-the ultimate goal of AI is the ability to build a system that can mimic human intelligence

-Four most common categories of AI include :

1. expert system – computerized advisory programs that imitate the reasoning processes of expert in solving difficult problems

2. neural network – attempts to emulate the way the human brain works

-fuzzy logic – a mathematical method of handling imprecise or      subjective information

3. genetic algorithm – an AI system that mimics the evolutionary, survival-if-the-fittest process to generate increasingly better solutions to a problem

4. intelligent agent – special-purposed-knowledge-based information system that accomplishes specific tasks on behalf of its users

DATA-MINING

-data-mining software includes many forms of AI such as neural networks and expert system

-common forms of data-mining analysis capabilities include:

1. cluster analysis

2. association detection

3. statistical analysis

CLUSTER ANALYSIS

-CLUSTER ANALYSIS – To divide an information set into mutually exclusive groups such that the members of each group are as possible to one another and the different groups are as far apart as possible

-CRM systems depend on cluster analysis to segment customer information and identify behavioral traits

ASSOCIATION DETECTION

-Association detection reveals the degree to which variables are related and the nature and frequency of these relationships in the information

-Market basket analysis such items as Web sites and checkout scanner information to detect customers’ buying behavior and predict future behaviour by identifying affinities among customers’ choices of products and services

STATISTICAL ANALYSIS

STATISTICAL ANALYSIS performs such functions as information correlations, distributions, calculations and variance analysis

- forecast– predictions made on the basis of time-series information

- time-series information – time-stamped information collected at a particular frequency

Chapter 8 Data Warehouse

Data warehouse.

 What is that ? Do you know about it ? maybe some of you think 'warehouse' that sells clothes right ? It's simple. Warehouse is place for storage of goods. So, automatically we can say it as place of storage of data. Get it ? Picture below shows you data warehouse 

It is a logical collection of information that gathered from many different operational databases that supports business activities & decision making start.

Data warehouse compiled information from internal or transactional/operational databases & external databases through extraction, transformation, and loading (ETL)
Data warehouse sends subsets of the information to data mart.
Information is multidimensional : contains layers of columns and rows
To present multidimensional information, a cube is used in common term.

Data mining is the process of analyzing data to extract information not offered by raw data alone and to  perform it, users need data mining tools such as query tools, reporting tools, statistical tools and intelligent agent. This tools use a variety of techniques to find patterns and relationship in large volume of information.

To  increase quality of organizational information and effectiveness, businesses must develop strategy to keep information clean. Information cleansing or scrubbing is process that weed out & fixes or discard inconsistent, incorrect or incomplete information.

In addition, business intelligence is information that people use to support their decision making efforts.
Principle BI enablers include technology, culture and people.

Chapter 7 Storing Organization Information - Database

Relational Database Fundamentals

Information is everywhere in an organization.

Information is stored in databases.

  Database – maintains information about various types of objects (inventory), events (transactions), people (employees), and places (warehouses).

Database models include: 

  Hierarchical database model – information is organized into a tree-like structure (using parent/child relationships) in such a way that it cannot have too many relationships. 

  Network database model – a flexible way of representing objects and their relationships. 

  Relational database model – stores information in the form of logically related two-dimensional tables.

Entities & Attributes

Entity – a person, place, thing, transaction, or event about which information is stored. 

     The rows in each table contain the entities. 

     In Figure 7.1 CUSTOMER includes Dave’s Sub Shop and Pizza Palace entities. 

Attributes (fields, columns) – characteristics or properties of an entity class. 

     The columns in each table contain the attributes. 

     In Figure 7.1 attributes for CUSTOMER include Customer ID, Customer Name, Contact Name.

Keys & Relationships

Primary keys and foreign keys identify the various entity classes (tables) in the database. 

   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. 

Potential relational database for Coca-Cola:

Walk your students through the relational database model in Figure 7.1

To ensure your students are grasping the concepts, ask them to answer the following:

How many orders have been placed for T’s Fun Zone? 

Answer: 1 Order IT 34563.

How many orders have been placed for Pizza Palace? 

Answer:  None.

How many items are included in Dave’s Sub Shop’s two orders? 

Answer:  Order 34561 has 3 items and order 34562 has one item for a total of 4 items in both orders.

Who is responsible for distributing Dave’s Sub Shop’s orders? 

Answer:  Hawkins Shipping.

Which products are included in Order 34562? 

Answer:  300 Vanilla Coke. 

Relational Database Advantages

Database advantages from a business perspective include: 

   Increased flexibility. 

   Increased scalability and performance. 

   Reduced information redundancy. 

   Increased information integrity (quality). 

   Increased information security. 

lncreased Flexibility

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 users logically access information. 

Increased Scalability & Performance

A database must scale to meet increased demand,  while maintaining acceptable performance levels. 

   Scalability – refers to how well a system can adapt to increased demands. 

  Performance – measures how quickly a system performs a certain process or transaction.

Reduced Information Redundancy

Databases reduce information redundancy. 

    Redundancy – the duplication of information or storing the same information in multiple places. 

Inconsistency is one of the primary problems with redundant information.

Increase Information Integrity (Quantity)

vInformation integrity – measures the quality of information. 

vIntegrity constraint – rules that help ensure the quality of information. 

   

   §Relational integrity constraint - rule that enforces basic and fundamental information-based constraints.

   

   §Business-critical integrity constraint - rule that enforce business rules vital to an organization’s success and often require more insight and knowledge than relational integrity constraints.

Increased Information Security

vInformation is an organizational asset and must be protected. 

vDatabases offer several security features including: 

   §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.

Database Management Systems:- 

vDatabase management systems (DBMS) – software through which users and application programs interact with a database.

Direct interaction :

>The user interacts directly with the DBMS.

>The DBMS obtains the information from the database.

Indirect interaction:

>User interacts with an application (i.e., payroll application, manufacturing application, sales application).

>The application interacts with the DBMS.

>The DBMS obtains the information from the database.

Data-Driven Web Sites

data-driven Web site is an interactive Web Site kept constantly updated and relevant to the needs of its customers through the use of a database. Data-driven Web sites are especially useful when the site offers a great deal of information, products, or services. Web site visitors are frequently angered if they are buried under an avalanche of information when searching a Web site. A data-driven Web site invites visitors to select and view what they are interested in by inserting a query, which the Web site then analyzes and custom builds a Web page in real-time that satisfies the query. The figure displays a Wikipedia user querying business intelligence and the database sending back the appropriate Web page that satisfies the user’s request.

What would happen to a Web site that is not data-driven? 

    Answer:The users would need to continually update the Web site data manually as the business data is updated.  This would be a redundant effort and most likely result in errors and the Web site could quickly become out of sync with the business data.

Driven Web Site Advantages

1. Development: Allows the Web site owner to make changes any time—all without having to rely on a developer or knowing HTML programming. A well-structured, data-driven Web site enables updating with little or no training.

2. Content management: A static Web site requires a programmer to make updates. This adds an unnecessary layer between the business and its Web content, which can lead to misunderstandings and slow turnarounds for desired changes.

3. Future expandability: Having a data-driven Web site enables the site to grow faster than would be possible with a static site.  Changing the layout, displays, and functionality of the site (adding more features and sections) is easier with a data-driven solution.

4. Minimizing human error: Even the most competent programmer charged with the task of maintaining many pages will overlook things and make mistakes. This will lead to bugs and inconsistencies that can be time consuming and expensive to track down and fix. Unfortunately, users who come across these bugs will likely become irritated and may leave the site. A well-designed, data-driven Web site will have ”error trapping” mechanisms to ensure that required information is filled out correctly and that content is entered and displayed in its correct format.

5.Cutting production and update costs: A data-driven Web site can be updated and ”published” by any competent data entry or administrative person. In addition to being convenient and more affordable, changes and updates will take a fraction of the time that they would with a static site. While training a competent programmer can take months or even years, training a data entry person can be done in 30 to 60 minutes.

6.More efficient: By their very nature, computers are excellent at keeping volumes of information intact. With a data-driven solution, the system keeps track of the templates, so users do not have to. Global changes to layout, navigation, or site structure would need to be programmed only once, in one place, and the site itself will take care of propagating those changes to the appropriate pages and areas. A data-driven infrastructure will improve the reliability and stability of a Web site, while greatly reducing the chance of ”breaking” some part of the site when adding new areas.

7. Improved Stability: Any programmer who has to update a Web site from ”static” templates must be very organized to keep track of all the source files. If a programmer leaves unexpectedly, it could involve re-creating existing work if those source files cannot be found. Plus, if there were any changes to the templates, the new programmer must be careful to use only the latest version. With a data-driven Web site, there is peace of mind, knowing the content is never lost—even if your programmer is.

Data-Driven Business Intelligence

Business Intelligence in a data-driven Web site:

>Companies can gain business intelligence by viewing the data accessed and analyzed from their Web site.  The figure displays how running queries or using analytical tools, such as a Pivot Table, on the database that is attached to the Web site can offer insight into the business, such as items browsed, frequent requests, items bought together, etc.

Integrating Information Among Multiple Databases

Integration – allows separate systems to communicate directly with each other. 

  Forward integration – takes information entered into a given system and sends it automatically to all downstream systems and processes. 
  
  Backward integration – takes information entered into a given system and sends it automatically to all upstream systems and processes.

Forward Integration:

>Basically, all information flows forward along the business process. Sales enters the information when it is negotiating the sale (looking for opportunities). The information is then passed to the order entry system when the order is actually placed. The order fulfillment system picks the products from the warehouse, packs the products, labels boxes, etc. Once the order is filled and shipped, the customer is billed.

What would happen if users could enter order information directly into the billing system?

The systems would quickly become out-of-sync.  There might be bills for nonexistent orders, or orders that do not have any bills (if someone deleted a bill). For this reason organizations typically place a business-critical integrity constraint on integrated systems:  With a forward integration the information must be entered in the sales system, you could not enter information directly into the billing system.

>Integrations are expensive to build and maintain and difficult to implement. For these reasons many organizations only build forward integrations and use business-critical integrity constraints to ensure all information is always entered only at the start of the integration (one source of record).

Backward Integration:

Basically, all information flows backward along the business process. Billing enters information and this information is passed back to the order system. The order fulfillment system passes the information back to the order entry system. The order entry system passes the information back to the sales system.

Why would an organization want to build both forward and backward integrations?

This allows users to enter information at any point in the business process and the information is automatically sent upstream and downstream to all other systems. For example, if order fulfillment determined that they could not fulfill an order (the product had been discontinued), they could simply enter this information into the database and it would be sent automatically upstream to the sales representative who could contact the customer and downstream to billing to remove the item from the bill.

Building a central repository specifically for integrated information:-

The above figure displays an example of customer information integrated using this method. Users can create, read, update, and delete in the main customer repository, and it is automatically sent to all of the other databases. This method does not follow the business process when building the integrations. Business-critical integrity constraints still need to be built to ensure information is only ever entered into the customer repository, otherwise the information will become out-of-sync.