by John Gallaugher

Information Systems

Chapter 11 The Data Asset:

Databases, Business Intelligence, and Competitive Advantage

©2010 Flat World Knowledge, Inc.

The Information Economy

• Information is the most important asset of most modern corporations.

• Companies who can gather, analyze, and act upon information most effectively will sustain competitive advantages.

Patents, trademarks, and brands

are important information assets.

Information Systems

• In many industries, the right information systems are critical for creating and sustaining competitive advantages.

Information Systems

Competitive Advantage

Knowledge

Information

Data

Drowning in Data

• The transformation of data into knowledge is key.

Zara Example •  Data about specific purchases

is collected at the cash register. •  Daily informational reports

about sales activity are sent to The Cube (Corporate Headquarters).

•  Reports are analyzed, trends are identified, and BUSINESS DECISIONS ARE MADE.

What is a Database?

• Databases are used to efficiently store and manage large amounts of data.

• Databases are everywhere, driving many familiar functions.

Database Examples

• Many familiar examples: –  iTunes –  library research tools –  store inventory systems – Google

Databases sort through large amounts of data and

deliver just the information you wanted!

Database Basics

• Database tables store information and resemble Excel worksheets.

• Tables consist of: –  fields (columns) –  records (rows)

• Tables are connected (or related) through keys.

Data Logic and Integrity

• Database field attributes allow a designer to specify the type of information contained in a field.

The database of a Web store can require that the credit card number field be a 16 digit

numeric required field—without 16 digits, a credit card number is of little value!

Queries

Searching on Switchboard.com queries a large phone record

database, locating just the person you’re looking for.

Queries written in SQL: “SELECT [NAME] FROM Records WHERE [Name]=Smith…”

• Queries ask questions of a database and are used to pull records that meet certain criteria.

Where Does Data Come From?

• Companies have more and more data from a growing number of sources: –  transaction data –  customer data –  survey – government data –  commercial sources

Public Records

• Look up people you know and see what Intelius.com knows about them!

Zillow.com uses deed records to estimate the value of nearly every home in America.

Data Marts

• Lots of data are in old legacy systems.

• For companies to take advantage of data, information needs to be accessible.

Data warehouses and data marts unite information from across an organization.

Business Intelligence

• Business intelligence systems use data created by other systems to provide reporting and analysis for organizational decision making.

The ability to pull data from across an organization

and make decisions is key to business success.

Wal-Mart’s Information System

•  Within 15 seconds of a purchase, customer purchase data is sent to Wal-Mart’s data center.

•  Wal-Mart uses this data to track sales, replenish inventory, and communicate with over 100,000 vendors.

Wal-Mart’s system is so sophisticated that they’ve identified the fact that people buy strawberry Pop-Tarts when a hurricane is approaching.

In addition, their inventory system is so agile that they can deliver more Pop-Tarts to the store before the storm hits!

Key Terms

• business intelligence

• database •  table • query • field • record

• data warehouse • data mart •  legacy system • data mining • artificial

intelligence