Chapter 6 (Data:Business Intelligence)

Section 6.1: Data, Information, and Databases

Information granularity refers to the extent of detail within the information (fine and
detailed or coarse and abstract).
Successful collecting, compling, sorting and finally analyzing information from multiple
levels, in varied formats, and exhibiting different granularities can provide tremendous
insight into high an organization is performing.
Figure 6.4

Information Type:
Transactional information encompasses all of the info contained within a single
business process or unit of work (supports operational tasks)
Ex: repetitive decisions such as analyzing daily sales reports, production schedules and
etc.
Analytical information encompasses all organizational information (supports
managerial tasks)
Ex: makes difficult decisions such as building a new manufacturing plant or hiring
additional sales personnel
Information Timeliness
Depends on situation. Some info that are a few days or weeks old can be relevant while a
few minutes can be almost worthless.
Real-time information is immediate, up-to-date information. Real-time systems provide
real-time information in response to requests.
There is a growing demand for real-time information because organizations need to make
faster and more effective decisions, keep smaller inventories, operate more efficiently
and track performance more carefully. Information also needs to be timely in the sense

that it meets employees needs. Biggest pitfall with real-time information is continual
change. Ex: three managers gathered info at different times of the day to understand a
situation. May be different because of the time differences and views on problem may not
match because the information they are basing their analysis on is continually changing.
Must evaluate timeliness for the information for every decision to prevent bad decisions
based on real-time information.
Information Quality
Information inconsistency occurs when the same data element has different values. Ex: A
customer who had changed her last name due to marriage. Changing this information in
only a few organizational systems will lead to data inconsistencies causing customer
123456 to be associated with two last names.
Information integrity issues occurs when a system produces incorrect, inconsistent or
duplicate data. Can cause managers to consider system reports invalid and make
decisions on other sources.
High-quality information include:
1. Completeness Missing information?
2. Accuracy Is there anything incorrect?
3. Consistency Is the summary or aggregate information in agreement with
detailed information?
4. Timeliness Is it updated? & when?
5. Uniqueness Does the transaction only occur once? No duplicates?
Figure 6.7

Ex: Nestle uses 550,000 suppliers to sell more than 100,000 products in 200 countries.
Due to poor information, company was unable to evaluate its business effectively. Had 9
million records of vendors, customers and materials, half of which was duplicated,
obsolete, inaccurate or incomplete.
Must address errors to significantly improve the quality of company information. Four
primary reasons for low-quality information are:
1. Online customers intentionally enter inaccurate information to protect their
identity.
2. Different systems have different information entry standards and formats.
3. Data-entry personnel enter abbreviated information to save time or erroneous
information by accident.
4. Third-party and external information contains inconsistencies, inaccuracies and
errors.
Cost of Using Low-Quality Information
Inability to accurately track customers.
Difficulty identifying the organizations most valuable customers.
Inability to identify selling opportunities.
Lost revenue opportunities from marketing to non-exsistant customers.
The cost of sending nondeliverable mail.
Difficulty tracking revenue because of inaccurate invoices.
Inability to build strong relationships with customers.
Benefits of Using High-Quality Information
Improve the changes of making a good decision and will directly increase an
organizations bottom line. Ex: Discovered that even with large number of golf courses,
Phoenix, Arizona is not a good place to sell golf clubs due to the fact that most golfers
are tourists and conventioneers who bring their own clubs. With this information,
company was able to strategically place its stores and launch its marketing campaigns.
High quality information does not guarantee that every decision made is going to be a
good one because people ultimately make decisions and no one is perfect. Such
information does ensure the basis of accuracy. Success of the organization depends on
appreciating and leveraging the true value of timely and high-quality information.
Information Governance
To ensure a firm manages its information correctly, it will need special policies and
procedures establishing rules on how the information is organized, updated, maintained
and accessed. Data govenance refers to the overall management of the availability,
usability, integrity and security of a company data.
Policy should clearly define how to store, archive, back up and secure the data. Company
should set procedures indetifying accessibility levels for employees.

Storing Information Using a Relational Database Management System

A database maintains information about various types of objects (inventory), events
(transactions), people (employees), and places (warehouses). A database management
system (DBMS) creates, reads, updates, and deletes data in a database while controlling
access and security. Performs the actual manipulation of the data in the database.
Information is stored and managers can access operational questions.
A query-by-example (QBE) tool that helps users graphically design the answer to a
question against a database. A structured query language (SQL) askes users to write lines
of code to answer questions against a database. MIS professionals have the skills required
to code SQL.
A data element is the smallest or basic unit of information. Ex: customers name, address,
email, discount rate, preferred shipping method, product name, quantity and etc.
Data models are logical data structures that detail the relationships among data elements
using graphics or pictures.
Metadata provides details about data. Ex: Metadata for an image includes the size,
resolution and date created. Metadata for a text document could be document length, data
created, authors name and summary. Data element gets metadata such as text, numeric,
alphanumeric, date, image and binary value.
Data dictionary compiles all metadata about the data elements in the data model.
Provides tremendous insight into database functirons, purpose and business rules.
Three primary data models: hierarchial, network and the relational database
A relational database model stores information in the form of logically related twodimensional tables. A relational database management system allows users to create,
read, update and delete data in a relational database.
Storing Data Elements in Entities and Attributes
Relationships in the RDM help managers extract information to business questions. An
entity stores information about a person, place, thing, transaction, or event.
Attributes are the data elements associated with an entity, Ex: Attributes for the entity
TRACKS are TrackNumber, TrackTile, TrackLength, and RecordingID
Primary keys are critical because they provide a way of distinguishing each record in a
table. It is an unique ID to find a certain thing. Ex: There can be 20 Steve Smiths.
However each Steve Smith has a primary key ID unique to them.
Foreign keys is a primary key of one table that appears as an attribute in another table and
acts to provide a logical relationship between the two tables. Creating logical relationship
between tables allows managers to search the data and turn it into useful information.

Advantages
Increased Flexibility:
o Physical view of infomraiton is physical storage on a storage device.
Logical view focuses on how individuals users logically access
information to meet their own particular business needs. Users can make
the system show what they need.
Increased Scalability and Performance: Database has to be scalable to handle
massive volumes of information.
o Perform quickly under heavy use. Allows all type of information
processing and information searching tasks.
Reduced Information Redundancy.
o Database eliminates information reduncy by recording each piece of
information in only one place of the the database.
Increased Information Integrity (Quality):
o Information integrity is a measure of the quality of information.
o Integrity constraints are rules to help ensure the quality of information.
Database and DBMS ensures users never violate the relational and
business critical constraints.
o Relational integrity constaints are rules that enforce basic and
fundamental information based constraints. A business rule defines how a
company performs certain aspects of its business and typically results in a
yes/no or true/false answer. Business-critical integrity constraints
enforce business rules vital to an organizations success and often require
more insight and knowledge than relational integrity constaints.s
Specification and enforcement of integrity constraints produce higherquality information that will provide better support for business decisions.
Increased Information Security
o Databases offer many security features including passwords to provide
authentication, access levels to determine who can access the data, and
access controls to determine what type of access they have to the
information. Ex: Customer-service repsentatives might need read-only
access. Biggests risk to security database is cloud computing. Data
governance can make it safer.
A data-driven website is an interactive website kept constantly updated and relevant to
the needs of its customers using a database. Especially useful when firm needs to offer
large amounts of information, products or services. Limit amount of information
displayed to customers based on unique search requiremebnts,
Advantages include:
Easy to manage content: Website owners can make changes without relying on MIS
professionals and users can update a data-driven website with little or no training.
Easy to store large amounts of data: Data-driven websites can keep large volumes of
information organized. Website owners can sue templates to implement changes for

layouts, navigation or website structure. Improves website reliability, scalability and

performance.
Easy to eliminate human errors: Data-driven websites trap data-entry errors, eliminating
inconsistencies while ensuring all information is entered correctly.
Ex: Zappos has data-driven website catering a specific niche market of consumers who
were tired of finding their most-desired items out of stock at traditional retailers.