by John Gallaugher Additional material by Duane Truex 2001

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.

Professor Truex MBA 8125 Informatioon Technology management

The Business Systems Architecture

Production Database

Data Warehouse Knowledge

Repository

Transaction Processing Systems

(TPS)

Management Information

Systems (MIS)

Data Mining

(Inductive reasoning)

Search Engines & tools

Content Editing &

Production tools

Organizational Memory Information System (OMIS)

DSS, GDSS & EIS

External Data

Sources

On-line Analytical

Processing (OLAP)

(Deductive)

Collaboration and

Coordination tools

Professor Truex MBA 8125 Informatioon Technology management

Definitions(1): Repositories

•  Production Database (DataMart) –  A collection of pre-specified and highly organized(mostly) textual

data in a relational database. –  Generally focussed on topic (CRM) or business unit (e.g., Marketing) –  Used by TPS and MIS. –  Has to be very fast and robust

• Data Warehouse –  Designed to support organizational decision-making –  Like production database, a collection of pre-specified and highly

organized(mostly) textual data in a relational database. –  Can be slower because it aggregates so much data; but is generally

structered for fast queries –  Is not mission critical.

Professor Truex MBA 8125 Informatioon Technology management

Definitions(2): Repositories, Continued

•  Knowledge Repository –  Storage place for unstructured data and information –  Knowledge is in the linkages between the data and

information (e.g. hyperlinks, maps) –  Knowledge is retrieved through searches –  Search engines add intelligence to a knowledge

repository

Two common implementations: –  Lotus Notes (Knowledge Roach Motel)

–  Intranets

Professor Truex MBA 8125 Informatioon Technology management

• External Data Sources – Databases and knowledge repositories. – Proprietary (paid) – Public (free)

Definitions(3): Repositories, Continued

Professor Truex MBA 8125 Informatioon Technology management

Definitions(4): Applications –  TPS (Transaction Processing System)

•  An organized collection of people procedures, databases, and devices to record completed business transactions

•  Any business-related exchange –  MIS (Management Information Systems)

•  An information system that provides aggregated, summarized information to decision makers.

•  Inputs typically is transaction data acquired from TPS •  Outputs are standardized, pre-specified reports

–  OLAP (Query and Reporting Systems •  Used in Decision Support Systems (DSS), Executive Information Systems (EIS) and Group DSS (GDSS)

–  Data Mining •  Statistical analysis of patterns and trends to surface the unexpected, un-obvious

–  Collaboration and Coordination tools •  email, calendaring, electronic bulletin boards, groupware (Lotus Notes, Groupwise…) •  Social networking tools and systems (IM, Twits, tweets, faces….)

Professor Truex MBA 8125 Informatioon Technology management

Definitions(5): Applications, Continued

•  Organizational Memory Information System –  The collection of repositories and systems that together preserve an

organization’s history, and make it available for current and future use

•  Data Mining –  You don’t know what you are looking for –  The mining software looks for patterns –  Uses automated statistical pattern matching algorithms

•  Search Engines –  Tools that let you search through knowledge repositories –  Examples: Alta Vista, Excite –  New developments: natural language processing (Ask Jeeves);

Dynamically created concept maps

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