Chapter 6-Foundations of Business Intelligence: Databases and Information Management

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What are the problems of managing data resources in a traditional file environment?

An effective information system provides users with accurate, timely, and relevant information. Accurate information is free of errors. Information is timely when it is available to decision makers when it is needed. Information is relevant when it is useful and appropriate for the types of work and decisions that require it. You might be surprised to learn that many businesses don't have timely, accurate, or relevant information because the data in their information systems have been poorly organized and maintained. That's why data management is so essential. To understand the problem, let's look at how information systems arrange data in computer files and traditional methods of file management.

Users access an organization's internal database through the web using their desktop PC browsers or mobile apps.

Because many back-end databases cannot interpret commands written in HTML, the web server passes these requests for data to software that translates HTML commands into SQL so the commands can be processed by the DBMS working with the database. In a client/server environment, the DBMS resides on a dedicated computer called a database server. The DBMS receives the SQL requests and provides the required data. Middleware transfers information from the organization's internal database back to the web server for delivery in the form of a web page to the user. Figure 6.15 shows that the middleware working between the web server and the DBMS is an application server running on its own dedicated computer (see Chapter 5). The application server software handles all application operations, including transaction processing and data access, between browser-based computers and a company's back-end business applications or databases. The application server takes requests from the web server, runs the business logic to process transactions based on those requests, and provides connectivity to the organization's back-end systems or databases. Alternatively, the software for handling these operations could be a custom program or a script.

Big Data Baseball

Big data and analytics are sweeping the business world, and the professional sports industry is no exception. Baseball, football, soccer, hockey, tennis, and even sailboat racing are finding ways to analyze data about players and competing teams in order to improve performance. The use of analytics and big data has revolutionized the game of baseball as we know it, including defensive shifts, swing path changes, and how teams acquire and develop players. Given the huge disparities in Major League Baseball (MLB) team budgets, wealthier teams typically have the advantage in recruiting the best players. Michael Lewis's book Moneyball, published in 2003, describes how Oakland Athletics manager Billy Beane was able to turn the underdog A's into a winning team by using big data analytics to guide decisions about which players to recruit and cultivate. Rigorous statistical analysis had demonstrated that on-base percentage and slugging percentage were better indicators of offensive success (and cheaper to obtain on the open market) than more historically valued qualities such as speed and contact. These observations flew in the face of conventional baseball wisdom and the beliefs of many baseball talent scouts and coaches. Beane rebuilt the A's based on these findings, producing a consistently winning team for a number of years by using advanced analytics to gain insights into each player's value and contribution to team success that wealthier teams had overlooked. Big data is credited with helping the Boston Red Sox win the World Series in 2004 and the St. Louis Cardinals win in 2006 and 2011. To varying degrees, every Major League Baseball team today uses big data and deep analytics to support decisions about many aspects of the game. However, some teams, such as the Pittsburgh Pirates, Chicago Cubs, and Houston Astros, were slower to do so than others, and suffered lackluster performance until they embraced big data more fully. Findings from big data analytics have changed the importance baseball teams attach to specific skills of players. Skills that previously could not be quantified are now receiving more attention, including fielding, base running, and stealing. Skill in fielding is especially valued today. For example, Mike Trout, center fielder for the Los Angeles Angels, is highly regarded by team owners because he's an exceptional fielder and base runner and an exceptionally intelligent base ball player, even though he lacked stellar statistics in home runs. Today the biggest challenge is not whether to use big data in baseball but how to use it effectively. It is not always possible to interpret the data and separate out what is "noise" and what is actually actionable information. The amount of data players and pitchers must deal with can be overwhelming—pitch usage, swing planes, spin rates, etc. When a player steps into the batter's box, every hitter is different in terms of how much information that person can absorb before getting bogged down in it. Some want to know what a pitcher will do in certain situations—what pitches the pitcher will use and how often that person uses them—while some want to just step in with a clear head and look for the ball. There's only so much data a person can use without dissecting too much and getting too distracted from the task at hand. Many baseball experts still believe that traditional methods of player evaluation, along with gut instinct, money, and luck, are still key ingredients for winning teams. For example, the San Francisco Giants use big data and statistics, but also base their player recruitment decisions on the opinions of scouts and coaches. According to Giants bench coach Ron Wotus, numbers really can't tell the whole story about the quality of the player; so the Giants integrate statistical data with scouting, coaching, and player experience, especially when dealing with opponents outside the National League that the Giants do not see regularly. Being able to exploit an individual player's strengths comes more from knowing the player and his ability as opposed to the statistics, Wotus believes. Shortstops with good arms can play farther from home plate than normal at times, while fast runners can play closer to home plate than usual. There are nuances to defending the opposition that are not statistically related, but statistics help when you don't know players well enough to know what to expect from them.

Blockchain

Blockchain is a distributed database technology that enables firms and organizations to create and verify transactions on a network nearly instantaneously without a central authority. The system stores transactions as a distributed ledger among a network of computers The information held in the database is continually reconciled by the computers in the network.

blockchain

What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

Businesses use their databases to keep track of basic transactions, such as paying suppliers, processing orders, keeping track of customers, and paying employees. But they also need databases to provide information that will help the company run the business more efficiently and help managers and employees make better decisions. If a company wants to know which product is the most popular or who is its most profitable customer, the answer lies in the data.

Before a new database is in place, organizations need to identify and correct their faulty data and establish better routines for editing data once their database is in operation. Analysis of data quality often begins with a data quality audit, which is a structured survey of the accuracy and level of completeness of the data in an information system. Data quality audits can be performed by surveying entire data files, surveying samples from data files, or surveying end users for their perceptions of data quality.

Data cleansing, also known as data scrubbing, consists of activities for detecting and correcting data in a database that are incorrect, incomplete, improperly formatted, or redundant. Data cleansing not only corrects errors but also enforces consistency among different sets of data that originated in separate information systems. Specialized data-cleansing software is available to automatically survey data files, correct errors in the data, and integrate the data in a consistent companywide format. Data quality problems are not just business problems. They also pose serious problems for individuals, affecting their financial condition and even their jobs. For example, inaccurate or outdated data about consumers' credit histories maintained by credit bureaus can prevent creditworthy individuals from obtaining loans or lower their chances of finding or keeping a job.

Data cleansing/scrubbing

data mining

Data mining is more discovery-driven. Data mining provides insights into corporate data that cannot be obtained with OLAP by finding hidden patterns and relationships in large databases and inferring rules from them to predict future behavior. The patterns and rules are used to guide decision making and forecast the effect of those decisions. The types of information obtainable from data mining include associations, sequences, classifications, clusters, and forecasts. Associations are occurrences linked to a single event. For instance, a study of supermarket purchasing patterns might reveal that, when corn chips are purchased, a cola drink is purchased 65 percent of the time, but when there is a promotion, cola is purchased 85 percent of the time. This information helps managers make better decisions because they have learned the profitability of a promotion. In sequences, events are linked over time. We might find, for example, that if a house is purchased, a new refrigerator will be purchased within two weeks 65 percent of the time, and an oven will be bought within one month of the home purchase 45 percent of the time. Classification recognizes patterns that describe the group to which an item belongs by examining existing items that have been classified and by inferring a set of rules. For example, businesses such as credit card or telephone companies worry about the loss of steady customers. Classification helps discover the characteristics of customers who are likely to leave and can provide a model to help managers predict who those customers are so that the managers can devise special campaigns to retain such customers. Clustering works in a manner similar to classification when no groups have yet been defined. A data mining tool can discover different groupings within data, such as finding affinity groups for bank cards or partitioning a database into groups of customers based on demographics and types of personal investments. Although these applications involve predictions, forecasting uses predictions in a different way. It uses a series of existing values to forecast what other values will be. For example, forecasting might find patterns in data to help managers estimate the future value of continuous variables, such as sales figures.

Querying and Reporting DBMS includes tools for accessing and manipulating information in databases. Most DBMS have a specialized language called a data manipulation language that is used to add, change, delete, and retrieve the data in the database. This language contains commands that permit end users and programming specialists to extract data from the database to satisfy information requests and develop applications. The most prominent data manipulation language today is Structured Query Language, or SQL. A query is a request for data from a database. Figure 6.7 illustrates the SQL query that would produce the new resultant table in Figure 6.5. You can find out more about how to perform SQL queries in our Learning Tracks for this chapter.

Figure 6.7 Example of an SQL Query Illustrated here are the SQL statements for a query to select suppliers for Users of DBMS for large and midrange computers, such as DB2, Oracle, or SQL Server, would employ SQL to retrieve information they needed from the database. Microsoft Access also uses SQL, but it provides its own set of user-friendly tools for querying databases and for organizing data from databases into more polished reports.

There are a number of advantages to using the web to access an organization's internal databases.

First, web browser software is much easier to use than proprietary query tools. Second, the web interface requires few or no changes to the internal database. It costs much less to add a web interface in front of a legacy system than to redesign and rebuild the system to improve user access. Accessing corporate databases through the web is creating new efficiencies, opportunities, and business models. ThomasNet.com provides an up-to-date online directory of more than 500,000 suppliers of industrial products, such as chemicals, metals, plastics, rubber, and automotive equipment. Formerly called Thomas Register, the company used to send out huge paper catalogs with this information. Now it provides this information to users online via its website and has become a smaller, leaner company. Other companies have created entirely new businesses based on access to large databases through the web. One is the social networking service Facebook, which helps users stay connected with each other and meet new people. Facebook features "profiles" with information on over 2.6 billion active users with information about themselves, including interests, friends, photos, and groups with which they are affiliated. Facebook maintains a very large database to house and manage all of this content. There are also many web-enabled databases in the public sector to help consumers and citizens access helpful information.

Lack of Data Sharing and Availability, Lack of Flexibility, Poor Security

A traditional file system can deliver routine scheduled reports after extensive programming efforts, but it cannot deliver ad hoc reports or respond to unanticipated information requirements in a timely fashion. The information required by ad hoc requests is somewhere in the system but may be too expensive to retrieve. Several programmers might have to work for weeks to put together the required data items in a new file. Because there is little control or management of data, access to and dissemination of information may be out of control. Management might have no way of knowing who is accessing or even making changes to the organization's data. Because pieces of information in different files and different parts of the organization cannot be related to one another, it is virtually impossible for information to be shared or accessed in a timely manner. Information cannot flow freely across different functional areas or different parts of the organization. If users find different values for the same piece of information in two different systems, they may not want to use these systems because they cannot trust the accuracy of their data.

Data Manipulation Language (DML)

DBMS includes tools for accessing and manipulating information in databases. Most DBMS have a specialized language called a data manipulation language that is used to add, change, delete, and retrieve the data in the database. This language contains commands that permit end users and programming specialists to extract data from the database to satisfy information requests and develop applications.

data redundancy

Entity Relationship Diagram

Database designers document their data model with an entity-relationship diagram, illustrated in Figure 6.11. This diagram illustrates the relationship between the entities SUPPLIER, PART, LINE_ITEM, and ORDER. The boxes represent entities. The lines connecting the boxes represent relationships. A line connecting two entities that ends in two short marks designates a one-to-one relationship. A line connecting two entities that ends with a crow's foot topped by a short mark indicates a one-to-many relationship. Figure 6.11 shows that one ORDER can contain many LINE_ITEMs. (A PART can be ordered many times and appear many times as a line item in a single order.) Each PART can have only one SUPPLIER, but many PARTs can be provided by the same SUPPLIER.

The Challenge of Big Data

Most data collected by organizations used to be transaction data that could easily fit into rows and columns of relational database management systems. We are now witnessing an explosion of data from web traffic, email messages, and social media content (tweets, status messages), as well as machine-generated data from sensors (used in smart meters, manufacturing sensors, and electrical meters) or from electronic trading systems. These data may be unstructured or semistructured and thus not suitable for relational database products that organize data in the form of columns and rows. We now use the term big data to describe these data sets with volumes so huge that they are beyond the ability of typical DBMS to capture, store, and analyze. Big data is often characterized by the "3Vs": the extreme volume of data, the wide variety of data types and sources, and the velocity at which data must be processed. Big data doesn't designate any specific quantity but usually refers to data in the petabyte and exabyte range—in other words, billions to trillions of records, many from different sources. Big data are produced in much larger quantities and much more rapidly than traditional data. For example, a single jet engine is capable of generating 10 terabytes of data in just 30 minutes, and there are more than 100,000 airline flights each day. Twitter generates more than 12 terabytes of data daily. According to the International Data Center (IDC) technology research firm, data are more than doubling every two years, so the amount of data available to organizations is skyrocketing

Analytical Tools: Relationships, Patterns, Trends

Once data have been captured and organized using the business intelligence technologies we have just described, they are available for further analysis using software for database querying and reporting, multidimensional data analysis (OLAP), and data mining. This section will introduce you to these tools, with more detail about business intelligence analytics and applications in Chapter 12.

in-memory computing

in-memory computing, which relies primarily on a computer's main memory (RAM) for data storage. (Conventional DBMS use disk storage systems.) Users access data stored in system primary memory, thereby eliminating bottlenecks from retrieving and reading data in a traditional, disk-based database and dramatically shortening query response times. In-memory processing makes it possible for very large sets of data, amounting to the size of a data mart or small data warehouse, to reside entirely in memory. Complex business calculations that used to take hours or days are able to be completed within seconds, and this can even be accomplished using handheld devices.

In-Memory Computing

Another way of facilitating big data analysis is to use in-memory computing, which relies primarily on a computer's main memory (RAM) for data storage. (Conventional DBMS use disk storage systems.) Users access data stored in system primary memory, thereby eliminating bottlenecks from retrieving and reading data in a traditional, disk-based database and dramatically shortening query response times. In-memory processing makes it possible for very large sets of data, amounting to the size of a data mart or small data warehouse, to reside entirely in memory. Complex business calculations that used to take hours or days are able to be completed within seconds, and this can even be accomplished using handheld devices. The previous chapter describes some of the advances in contemporary computer hardware technology that make in-memory processing possible, such as powerful high-speed processors, multicore processing, and falling computer memory prices. These technologies help companies optimize the use of memory and accelerate processing performance while lowering costs. Leading in-memory database products include SAP HANA, Oracle Database In-Memory, Microsoft SQL Server, and Teradata Intelligent Memory.

database server

data quality audit

These systems perform high-level analyses of patterns or trends, but they can also drill down to provide more detail when needed. There are data mining applications for all the functional areas of business and for government and scientific work. One popular use for data mining is to provide detailed analyses of patterns in customer data for one-to-one marketing campaigns or for identifying profitable customers.

Caesars Entertainment, formerly known as Harrah's Entertainment, is the largest gaming company in the world. It continually analyzes data about its customers gathered when people play its slot machines or use its casinos and hotels. The corporate marketing department uses this information to build a detailed gambling profile, based on a particular customer's ongoing value to the company. For instance, data mining lets Caesars know the favorite gaming experience of a regular customer at one of its riverboat casinos along with that person's preferences for room accommodations, restaurants, and entertainment. This information guides management decisions about how to cultivate the most profitable customers, encourage those customers to spend more, and attract more customers with high revenue-generating potential. Business intelligence improved Caesars's profits so much that it became the centerpiece of the firm's business strategy.

data lake

Current and historical data are extracted from multiple operational systems along with web data, social media data, Internet of Things (IoT) machine-generated data, unstructured audio/visual data, and other data from external sources. Some companies are starting to pour all of these types of data into a data lake. A data lake is a repository for raw unstructured data or structured data that for the most part has not yet been analyzed, and the data can be accessed in many ways. The data lake stores these data in their native format until they are needed. The Hadoop Distributed File System (HDFS) is often used to store the data lake contents across a set of clustered computer nodes, and Hadoop clusters may be used to preprocess some of these data for use in the data warehouse, data marts, or an analytic platform, or for direct querying by power users. Outputs include reports and dashboards as well as query results.

Database Management System (DBMS)

Database Management Systems A database management system (DBMS) is software that enables an organization to centralize data, manage them efficiently, and provide access to the stored data by application programs. The DBMS acts as an interface between application programs and the physical data files. When the application program calls for a data item, such as gross pay, the DBMS finds this item in the database and presents it to the application program. Using traditional data files, the programmer would have to specify the size and format of each data element used in the program and then tell the computer where they were located. The DBMS relieves the programmer or end user from the task of understanding where and how the data are actually stored by separating the logical and physical views of the data. The logical view presents data, as they would be perceived by end users or business specialists, whereas the physical view shows how data are actually organized and structured on physical storage media. The database management software makes the physical database available for different logical views required by users. For example, for the human resources database illustrated in Figure 6.3, a benefits specialist might require a view consisting of the employee's name, social security number, and health insurance coverage. A payroll department member might need data such as the employee's name, social security number, gross pay, and net pay. The data for all these views are stored in a single database, where they can be more easily managed by the organization.

Database

Database technology cuts through many of the problems of traditional file organization. A more rigorous definition of a database is a collection of data organized to serve many applications efficiently by centralizing the data and controlling redundant data. Rather than storing data in separate files for each application, data appear to users as being stored in only one location. A single database services multiple applications. For example, instead of a corporation storing employee data in separate information systems and separate files for personnel, payroll, and benefits, the corporation could create a single common human resources database

A computer system organizes data in a hierarchy that starts with the bit, which represents either a 0 or a 1. Bits can be grouped to form a byte to represent one character, number, or symbol. Bytes can be grouped to form a field, and related fields can be grouped to form a record. Related records can be collected to form a file, and related files can be organized into a database.

For example, the records in Figure 6.1 could constitute a student course file. A group of related files makes up a database. The student course file illustrated in Figure 6.1 could be grouped with files on students' personal histories and financial backgrounds to create a student database. A record describes an entity. An entity is a person, place, thing, or event on which we store and maintain information. Each characteristic or quality describing a particular entity is called an attribute. For example, Student_ID, Course, Date, and Grade are attributes of the entity COURSE. The specific values that these attributes can have are found in the fields of the record describing the entity COURSE.

The select, join, and project operations enable data from two different tables to be combined and only selected attributes to be displayed.

The project operation creates a subset consisting of columns in a table, permitting the user to create new tables that contain only the information required. In our example, we want to extract from the new table only the following columns: Part_Number, Part_Name, Supplier_Number, and Supplier_Name.

file

A group of related fields, such as the student's name, the course taken, the date, and the grade, comprises a record; a group of records of the same type is called a file

field

A grouping of characters into a word, a group of words, or a complete number (such as a person's name or age) is called a field.

data definition

Capabilities of Database Management Systems

A DBMS includes capabilities and tools for organizing, managing, and accessing the data in the database. The most important are its data definition language, data dictionary, and data manipulation language. DBMS have a data definition capability to specify the structure of the content of the database. It would be used to create database tables and to define the characteristics of the fields in each table. This information about the database would be documented in a data dictionary. A data dictionary is an automated or manual file that stores definitions of data elements and their characteristics. Microsoft Access has a rudimentary data dictionary capability that displays information about the name, description, size, type, format, and other properties of each field in a table (see Figure 6.6). Data dictionaries for large corporate databases may capture additional information, such as usage, ownership (who in the organization is responsible for maintaining the data), authorization, security, and the individuals, business functions, programs, and reports that use each data element.

How a DBMS Solves the Problems of the Traditional File Environment

A DBMS reduces data redundancy and inconsistency by minimizing isolated files in which the same data are repeated. The DBMS may not enable the organization to eliminate data redundancy entirely, but it can help control redundancy. Even if the organization maintains some redundant data, using a DBMS eliminates data inconsistency because the DBMS can help the organization ensure that every occurrence of redundant data has the same values. The DBMS uncouples programs and data, enabling data to stand on their own. The description of the data used by the program does not have to be specified in detail each time a different program is written. Access and availability of information will be increased and program development and maintenance costs reduced because users and programmers can perform ad hoc queries of the database for many simple applications without having to write complicated programs. The DBMS enables the organization to centrally manage data, their use, and security. Data sharing throughout the organization is easier because the data are presented to users as being in a single location rather than fragmented in many different systems and files.

bit

A bit represents the smallest unit of data a computer can handle.

The blockchain maintains a continuously growing list of records called blocks. Each block contains a timestamp and a link to a previous block. Once a block of data is recorded on the blockchain ledger, it cannot be altered retroactively. When someone wants to add a transaction, participants in the network (all of whom have copies of the existing blockchain) run algorithms to evaluate and verify the proposed transaction. Legitimate changes to the ledger are recorded across the blockchain in a matter of seconds or minutes and records are protected through cryptography. What makes a blockchain system possible and attractive to business firms is encryption and authentication of the actors and participating firms, which ensures that only legitimate actors can enter information, and only validated transactions are accepted. Once recorded, the transaction cannot be changed. Figure 6.12 illustrates how blockchain works for fulfilling an order.

A blockchain system is a distributed database that records transactions in a peer-to-peer network of computers Figure 6.12 Full Alternative Text There are many benefits to firms using blockchain databases. Blockchain networks radically reduce the cost of verifying users, validating transactions, and the risks of storing and processing transaction information across thousands of firms. Instead of thousands of firms building their own private transaction systems, then integrating them with suppliers, shippers, and financial institution systems, blockchain can provide a single, simple, low-cost transaction system for participating firms. Standardization of recording transactions is aided through the use of smart contracts. Smart contracts are computer programs that implement the rules governing transactions between firms, for example, what is the price of products, how will they be shipped, when will the transaction be completed, who will finance the transaction, what are financing terms, and the like. The simplicity and security that blockchain offers has made it attractive for storing and securing financial transactions, supply chain transactions, medical records, and other types of data. Blockchain is a foundation technology for Bitcoin, Ethereum, and other cryptocurrencies.

File Organization Terms and Concepts

A computer system organizes data in a hierarchy that starts with bits and bytes and progresses to fields, records, files, and databases. A bit represents the smallest unit of data a computer can handle. A group of bits, called a byte, represents a single character, which can be a letter, a number, or another symbol. A grouping of characters into a word, a group of words, or a complete number (such as a person's name or age) is called a field. A group of related fields, such as the student's name, the course taken, the date, and the grade, comprises a record; a group of records of the same type is called a file.

Database Management Systems

A database management system (DBMS) is software that enables an organization to centralize data, manage them efficiently, and provide access to the stored data by application programs. The DBMS acts as an interface between application programs and the physical data files. When the application program calls for a data item, such as gross pay, the DBMS finds this item in the database and presents it to the application program. Using traditional data files, the programmer would have to specify the size and format of each data element used in the program and then tell the computer where they were located. The DBMS relieves the programmer or end user from the task of understanding where and how the data are actually stored by separating the logical and physical views of the data. The logical view presents data, as they would be perceived by end users or business specialists, whereas the physical view shows how data are actually organized and structured on physical storage media. The database management software makes the physical database available for different logical views required by users. For example, for the human resources database illustrated in Figure 6.3, a benefits specialist might require a view consisting of the employee's name, social security number, and health insurance coverage. A payroll department member might need data such as the employee's name, social security number, gross pay, and net pay. The data for all these views are stored in a single database, where they can be more easily managed by the organization.

byte

A group of bits, called a byte, represents a single character, which can be a letter, a number, or another symbol.

record

A group of related fields, such as the student's name, the course taken, the date, and the grade, comprises a record

query

A query is a request for data from a database.

entity

A record describes an entity. An entity is a person, place, thing, or event on which we store and maintain information.

Cloud Databases and Distributed Databases

Among the services Amazon and other cloud computing vendors provide are relational database engines. Amazon Relational Database Service (Amazon RDS) offers MySQL, Microsoft SQL Server, Oracle Database, PostgreSQL, MariaDB, or Amazon Aurora as database engines. Pricing is based on usage. Oracle has its own Database Cloud Services using its relational Oracle Database, and Microsoft Azure SQL Database is a cloud-based relational database service based on the Microsoft SQL Server DBMS. Cloud-based data management services have special appeal for web-focused startups or small to medium-sized businesses seeking database capabilities at a lower cost than in-house database products. (See the Interactive Session on Technology.) Google now offers its Spanner distributed database technology as a cloud service. A distributed database is one that is stored in multiple physical locations. Parts or copies of the database are physically stored in one location and other parts or copies are maintained in other locations. Spanner makes it possible to store information across millions of machines in hundreds of data centers around the globe, and to synchronize the data precisely in all of its locations and ensure the data are always consistent. Google uses Spanner to support its various cloud services, and is now making the technology available to other companies that might need such capabilities to run a global business.

analytic platform

Analytic Platforms

Commercial database vendors have developed specialized high-speed analytic platforms using both relational and nonrelational technology that are optimized for analyzing large data sets. Analytic platforms feature preconfigured hardware-software systems that are specifically designed for query processing and analytics. For example, the IBM PureData System for Analytics features tightly integrated database, server, and storage components that handle complex analytic queries 10 to 100 times faster than traditional systems. Analytic platforms also include in-memory systems and NoSQL nonrelational database management systems and are now available as cloud services. Figure 6.13 illustrates a contemporary business intelligence technology infrastructure using the technologies we have just described. Current and historical data are extracted from multiple operational systems along with web data, social media data, Internet of Things (IoT) machine-generated data, unstructured audio/visual data, and other data from external sources. Some companies are starting to pour all of these types of data into a data lake. A data lake is a repository for raw unstructured data or structured data that for the most part has not yet been analyzed, and the data can be accessed in many ways. The data lake stores these data in their native format until they are needed. The Hadoop Distributed File System (HDFS) is often used to store the data lake contents across a set of clustered computer nodes, and Hadoop clusters may be used to preprocess some of these data for use in the data warehouse, data marts, or an analytic platform, or for direct querying by power users. Outputs include reports and dashboards as well as query results. Chapter 12 discusses the various types of BI users and BI reporting in greater detail.

Nonrelational Databases, Cloud Databases, and Blockchain For more than 30 years, relational database technology has been the gold standard. Cloud computing, unprecedented data volumes, massive workloads for web services, and the need to store new types of data require database alternatives to the traditional relational model of organizing data in the form of tables, columns, and rows. Companies are turning to "NoSQL" nonrelational database technologies for this purpose. Nonrelational database management systems use a more flexible data model and are designed for managing large data sets across many distributed machines and for easily scaling up or down. They are useful for accelerating simple queries against large volumes of structured and unstructured data, including web, social media, graphics, and other forms of data that are difficult to analyze with traditional SQL-based tools. There are several different kinds of NoSQL databases, each with its own technical features and behavior. Oracle NoSQL Database is one example, as is Amazon's SimpleDB, one of the Amazon Web Services that run in the cloud. SimpleDB provides a simple web services interface to create and store multiple data sets, query data easily, and return the results. There is no need to predefine a formal database structure or change that definition if new data are added later. MetLife's MongoDB open source NoSQL database brings together data from more than 70 separate administrative systems, claims systems, and other data sources, including semistructured and unstructured data, such as images of health records and death certificates. The NoSQL database can handle structured, semistructured, and unstructured information without requiring tedious, expensive, and time-consuming database mapping to normalize all data to a rigid schema, as required by relational databases.

Companies are turning to "NoSQL" nonrelational database technologies for this purpose.

data mart

Companies often build enterprise-wide data warehouses, where a central data warehouse serves the entire organization, or they create smaller, decentralized warehouses called data marts. A data mart is a subset of a data warehouse in which a summarized or highly focused portion of the organization's data is placed in a separate database for a specific population of users. For example, a company might develop marketing and sales data marts to deal with customer information. Bookseller Barnes & Noble used to maintain a series of data marts—one for point-of-sale data in retail stores, another for college bookstore sales, and a third for online sales.

Relational DBMS

Contemporary DBMS use different database models to keep track of entities, attributes, and relationships. The most popular type of DBMS today for PCs as well as for larger computers and mainframes is the relational DBMS. Relational databases represent data as two-dimensional tables (called relations). Tables may be referred to as files. Each table contains data on an entity and its attributes. Microsoft Access is a relational DBMS for desktop systems, whereas DB2, Oracle Database, and Microsoft SQL Server are relational DBMS for large mainframes and midrange computers. MySQL is a popular open source DBMS. Let's look at how a relational database organizes data about suppliers and parts (see Figure 6.4). The database has a separate table for the entity SUPPLIER and a table for the entity PART. Each table consists of a grid of columns and rows of data. Each individual element of data for each entity is stored as a separate field, and each field represents an attribute for that entity. Fields in a relational database are also called columns. For the entity SUPPLIER, the supplier identification number, name, street, city, state, and ZIP code are stored as separate fields within the SUPPLIER table and each field represents an attribute for the entity SUPPLIER.

Data Redundancy and Inconsistency

Data redundancy is the presence of duplicate data in multiple data files so that the same data are stored in more than one place or location. Data redundancy occurs when different groups in an organization independently collect the same piece of data and store it independently of each other. Data redundancy wastes storage resources and also leads to data inconsistency, where the same attribute may have different values. For example, in instances of the entity COURSE illustrated in Figure 6.1, the Date may be updated in some systems but not in others. The same attribute, Student_ID, might also have different names in different systems throughout the organization. Some systems might use Student_ID and others might use ID, for example. Additional confusion can result from using different coding systems to represent values for an attribute. For instance, the sales, inventory, and manufacturing systems of a clothing retailer might use different codes to represent clothing size. One system might represent clothing size as "extra-large," whereas another might use the code "XL" for the same purpose. The resulting confusion would make it difficult for companies to create customer relationship management, supply chain management, or enterprise systems that integrate data from different sources.

data inconsistency

Data redundancy wastes storage resources and also leads to data inconsistency, where the same attribute may have different values. For example, in instances of the entity COURSE illustrated in Figure 6.1, the Date may be updated in some systems but not in others. The same attribute, Student_ID, might also have different names in different systems throughout the organization. Some systems might use Student_ID and others might use ID, for example. Additional confusion can result from using different coding systems to represent values for an attribute. For instance, the sales, inventory, and manufacturing systems of a clothing retailer might use different codes to represent clothing size. One system might represent clothing size as "extra-large," whereas another might use the code "XL" for the same purpose. The resulting confusion would make it difficult for companies to create customer relationship management, supply chain management, or enterprise systems that integrate data from different sources.

What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful?

Problems With the Traditional File Environment In most organizations, systems tended to grow independently without a companywide plan. Accounting, finance, manufacturing, human resources, and sales and marketing all developed their own systems and data files. Figure 6.2 illustrates the traditional approach to information processing. The use of a traditional approach to file processing encourages each functional area in a corporation to develop specialized applications. Each application requires a unique data file that is likely to be a subset of the master file. These subsets of the master file lead to data redundancy and inconsistency, processing inflexibility, and wasted storage resources.

Each application, of course, required its own files and its own computer program to operate. For example, the human resources functional area might have a personnel master file, a payroll file, a medical insurance file, a pension file, a mailing list file, and so forth, until tens, perhaps hundreds, of files and programs existed. In the company as a whole, this process led to multiple master files created, maintained, and operated by separate divisions or departments. As this process goes on for 5 or 10 years, the organization is saddled with hundreds of programs and applications that are very difficult to maintain and manage. The resulting problems are data redundancy and inconsistency, program-data dependence, inflexibility, poor data security, and an inability to share data among applications.

attribute

Each characteristic or quality describing a particular entity is called an attribute. For example, Student_ID, Course, Date, and Grade are attributes of the entity COURSE. The specific values that these attributes can have are found in the fields of the record describing the entity COURSE.

Businesses are interested in big data because they can reveal more patterns and interesting relationships than smaller data sets, with the potential to provide new insights into customer behavior, weather patterns, financial market activity, or other phenomena.

For example, Shutterstock, the global online image marketplace, stores 24 million images, adding 10,000 more each day. To find ways to optimize the buying experience, Shutterstock analyzes its big data to find out where its website visitors place their cursors and how long they hover over an image before making a purchase. Big data is also finding many uses in the public sector, For example, city governments have been using big data to manage traffic flows and to fight crime. The Interactive Session on Management illustrates how Major League Baseball is using big data to improve player and team performance. However, to derive business value from these data, organizations need new technologies and tools capable of managing and analyzing nontraditional data along with their traditional enterprise data. They also need to know what questions to ask of the data and limitations of big data. Capturing, storing, and analyzing big data can be expensive, and information from big data may not necessarily help decision makers. It's important to have a clear understanding of the problem big data will solve for the business. The chapter-ending case explores these issu

Nonrelational database management systems

For more than 30 years, relational database technology has been the gold standard. Cloud computing, unprecedented data volumes, massive workloads for web services, and the need to store new types of data require database alternatives to the traditional relational model of organizing data in the form of tables, columns, and rows. Companies are turning to "NoSQL" nonrelational database technologies for this purpose. Nonrelational database management systems use a more flexible data model and are designed for managing large data sets across many distributed machines and for easily scaling up or down. They are useful for accelerating simple queries against large volumes of structured and unstructured data, including web, social media, graphics, and other forms of data that are difficult to analyze with traditional SQL-based tools. There are several different kinds of NoSQL databases, each with its own technical features and behavior. Oracle NoSQL Database is one example, as is Amazon's SimpleDB, one of the Amazon Web Services that run in the cloud. SimpleDB provides a simple web services interface to create and store multiple data sets, query data easily, and return the results. There is no need to predefine a formal database structure or change that definition if new data are added later. MetLife's MongoDB open source NoSQL database brings together data from more than 70 separate administrative systems, claims systems, and other data sources, including semistructured and unstructured data, such as images of health records and death certificates. The NoSQL database can handle structured, semistructured, and unstructured information without requiring tedious, expensive, and time-consuming database mapping to normalize all data to a rigid schema, as required by relational databases.

Figure 6.7 Full Alternative Text Users of DBMS for large and midrange computers, such as DB2, Oracle, or SQL Server, would employ SQL to retrieve information they needed from the database. Microsoft Access also uses SQL, but it provides its own set of user-friendly tools for querying databases and for organizing data from databases into more polished reports. In Microsoft Access, you will find features that enable users to create queries by identifying the tables and fields they want and the results and then selecting the rows from the database that meet particular criteria. These actions in turn are translated into SQL commands. Figure 6.8 illustrates how the same query as the SQL query to select parts and suppliers would be constructed using the Microsoft Access query-building tools.

Illustrated here is how the query in Figure 6.7 would be constructed using Microsoft Access query-building tools. It shows the tables, fields, and selection criteria used for the query. Courtesy of Microsoft Corporation Figure 6.8 Full Alternative Text Microsoft Access and other DBMS include capabilities for report generation so that the data of interest can be displayed in a more structured and polished format than would be possible just by querying. Crystal Reports is a popular report generator for large corporate DBMS, although it can also be used with Access. Access also has capabilities for developing desktop system applications. These include tools for creating data entry screens, reports, and developing the logic for processing transactions.

Normalization and Entity-Relationship Diagrams The conceptual database design describes how the data elements in the database are to be grouped. The design process identifies relationships among data elements and the most efficient way of grouping data elements together to meet business information requirements. The process also identifies redundant data elements and the groupings of data elements required for specific application programs. Groups of data are organized, refined, and streamlined until an overall logical view of the relationships among all the data in the database emerges. To use a relational database model effectively, complex groupings of data must be streamlined to minimize redundant data elements and awkward many-to-many relationships. The process of creating small, stable, yet flexible and adaptive data structures from complex groups of data is called normalization. Figures 6.9 and 6.10 illustrate this process.

In the particular business modeled here, an order can have more than one part, but each part is provided by only one supplier. If we build a relation called ORDER with all the fields included here, we would have to repeat the name and address of the supplier for every part on the order, even though the order is for parts from a single supplier. This relationship contains what are called repeating data groups because there can be many parts on a single order to a given supplier. A more efficient way to arrange the data is to break down ORDER into smaller relations, each of which describes a single entity. If we go step by step and normalize the relation ORDER, we emerge with the relations illustrated in Figure 6.10. You can find out more about normalization, entity-relationship diagramming, and database design in the Learning Tracks for this chapter.

This diagram shows the relationships between the entities SUPPLIER, PART, LINE_ITEM, and ORDER that might be used to model the database in Figure 6.10.

It can't be emphasized enough: If the business doesn't get its data model right, the system won't be able to serve the business well. The company's systems will not be as effective as they could be because they'll have to work with data that may be inaccurate, incomplete, or difficult to retrieve. Understanding the organization's data and how they should be represented in a database is an important lesson you can learn from this course. For example, Famous Footwear, a shoe store chain with more than 800 locations in 49 states, could not achieve its goal of having "the right style of shoe in the right store for sale at the right price" because its database was not properly designed for rapidly adjusting store inventory. The company had an Oracle relational database running on a midrange computer, but the database was designed primarily for producing standard reports for management rather than for reacting to marketplace changes. Management could not obtain precise data on specific items in inventory in each of its stores. The company had to work around this problem by building a new database where the sales and inventory data could be better organized for analysis and inventory management.

Program-Data Dependence

Program-data dependence refers to the coupling of data stored in files and the specific programs required to update and maintain those files such that changes in programs require changes to the data. Every traditional computer program has to describe the location and nature of the data with which it works. In a traditional file environment, any change in a software program could require a change in the data accessed by that program. One program might be modified from a five-digit to a nine-digit ZIP code. If the original data file were changed from five-digit to nine-digit ZIP codes, then other programs that required the five-digit ZIP code would no longer work properly. Such changes could cost millions of dollars to implement properly.

Program-data dependence

Hadoop

Relational DBMS and data warehouse products are not well suited for organizing and analyzing big data or data that do not easily fit into columns and rows used in their data models. For handling unstructured and semistructured data in vast quantities, as well as structured data, organizations are using Hadoop. Hadoop is an open source software framework managed by the Apache Software Foundation that enables distributed parallel processing of huge amounts of data across inexpensive computers. It breaks a big data problem down into subproblems, distributes them among up to thousands of inexpensive computer processing nodes, and then combines the result into a smaller data set that is easier to analyze. You've probably used Hadoop to find the best airfare on the Internet, get directions to a restaurant, do a search on Google, or connect with a friend on Facebook. Hadoop consists of several key services, including the Hadoop Distributed File System (HDFS) for data storage and MapReduce for high-performance parallel data processing. HDFS links together the file systems on the numerous nodes in a Hadoop cluster to turn them into one big file system. Hadoop's MapReduce was inspired by Google's MapReduce system for breaking down processing of huge data sets and assigning work to the various nodes in a cluster. HBase, Hadoop's nonrelational database, provides rapid access to the data stored on HDFS and a transactional platform for running high-scale real-time applications. Hadoop can process large quantities of any kind of data, including structured transactional data, loosely structured data such as Facebook and Twitter feeds, complex data such as web server log files, and unstructured audio and video data. Hadoop runs on a cluster of inexpensive servers, and processors can be added or removed as needed. Companies use Hadoop for analyzing very large volumes of data as well as for a staging area for unstructured and semistructured data before they are loaded into a data warehouse. Yahoo uses Hadoop to track users' behavior so it can modify its home page to fit their interests. Life sciences research firm NextBio uses Hadoop and HBase to process data for pharmaceutical companies conducting genomic research. Top database vendors such as IBM, Hewlett-Packard, Oracle, and Microsoft have their own Hadoop software distributions. Other vendors offer tools for moving data into and out of Hadoop or for analyzing data within Hadoop.

Referential Integrity

Relational database systems try to enforce referential integrity rules to ensure that relationships between coupled tables remain consistent. When one table has a foreign key that points to another table, you may not add a record to the table with the foreign key unless there is a corresponding record in the linked table. In the database we examined earlier in this chapter, the foreign key Supplier_Number links the PART table to the SUPPLIER table. We may not add a new record to the PART table for a part with Supplier_Number 8266 unless there is a corresponding record in the SUPPLIER table for Supplier_Number 8266. We must also delete the corresponding record in the PART table if we delete the record in the SUPPLIER table for Supplier_Number 8266. In other words, we shouldn't have parts from nonexistent suppliers!

Operations of a Relational DBMS

Relational database tables can be combined easily to deliver data required by users, provided that any two tables share a common data element. Suppose we wanted to find in this database the names of suppliers who could provide us with part number 137 or part number 150. We would need information from two tables: the SUPPLIER table and the PART table. Note that these two files have a shared data element: Supplier_Number. In a relational database, three basic operations, as shown in Figure 6.5, are used to develop useful sets of data: select, join, and project. The select operation creates a subset consisting of all records in the file that meet stated criteria. Select creates, in other words, a subset of rows that meet certain criteria. In our example, we want to select records (rows) from the PART table where the Part_Number equals 137 or 150. The join operation combines relational tables to provide the user with more information than is available in individual tables. In our example, we want to join the now-shortened PART table (only parts 137 or 150 will be presented) and the SUPPLIER table into a single new table.

sentiment analysis

Sentiment analysis software is able to mine text comments in an email message, blog, social media conversation, or survey forms to detect favorable and unfavorable opinions about specific subjects. For example, Kraft Foods uses a Community Intelligence Portal and sentiment analysis to tune into consumer conversations about its products across numerous social networks, blogs, and other websites. Kraft tries to make sense of relevant comments rather than just track brand mentions and can identify customers' emotions and feelings when they talk about how they barbecue and what sauces and spices they use.

Tuples

Why are data governance and data quality assurance essential for managing the firm's data resources?

Setting up a database is only a start. To make sure that the data for your business remain accurate, reliable, and readily available to those who need it, your business will need special policies and procedures for data governance. Data governance encompasses policies and procedures through which data can be managed as an organizational resource. It establishes the organization's rules for sharing, disseminating, acquiring, standardizing, classifying, and inventorying information. These include identifying which users and organizational units can share information, where information can be distributed, who is responsible for updating and maintaining the information, and how data resources should be secured (see Chapter 8). A firm's information policy might specify, for example, that only selected members of the payroll and human resources department would have the right to change or view sensitive employee data, such as an employee's salary or social security number, and that these departments are responsible for making sure that such employee data are accurate.

data governance

Setting up a database is only a start. To make sure that the data for your business remain accurate, reliable, and readily available to those who need it, your business will need special policies and procedures for data governance. Data governance encompasses policies and procedures through which data can be managed as an organizational resource. It establishes the organization's rules for sharing, disseminating, acquiring, standardizing, classifying, and inventorying information. These include identifying which users and organizational units can share information, where information can be distributed, who is responsible for updating and maintaining the information, and how data resources should be secured. A firm's information policy might specify, for example, that only selected members of the payroll and human resources department would have the right to change or view sensitive employee data, such as an employee's salary or social security number, and that these departments are responsible for making sure that such employee data are accurate.

Business Intelligence Infrastructure

Suppose you wanted concise, reliable information about current operations, trends, and changes across the entire company. If you worked in a large company, the data you need might have to be pieced together from separate systems, such as sales, manufacturing, and accounting, and even from external sources, such as demographic or competitor data. Increasingly, you might need to use big data. A contemporary infrastructure for business intelligence has an array of tools for obtaining useful information from all the different types of data used by businesses today, including semistructured and unstructured big data in vast quantities. These capabilities include data warehouses and data marts, Hadoop, in-memory computing, and analytical platforms. Some of these capabilities are available as cloud services.

text mining

Text mining tools are now available to help businesses analyze these data. These tools are able to extract key elements from unstructured natural language text, discover patterns and relationships, and summarize the information

A relational database organizes data in the form of two-dimensional tables. Illustrated here are tables for the entities SUPPLIER and PART showing how they represent each entity and its attributes. Supplier_Number is a primary key for the SUPPLIER table and a foreign key for the PART table.

The actual information about a single supplier that resides in a table is called a row. Rows are commonly referred to as records, or in very technical terms, as tuples. Data for the entity PART have their own separate table. The field for Supplier_Number in the SUPPLIER table uniquely identifies each record so that the record can be retrieved, updated, or sorted. It is called a key field. Each table in a relational database has one field that is designated as its primary key. This key field is the unique identifier for all the information in any row of the table and this primary key cannot be duplicated. Supplier_Number is the primary key for the SUPPLIER table and Part_Number is the primary key for the PART table. Note that Supplier_Number appears in both the SUPPLIER and PART tables. In the SUPPLIER table, Supplier_Number is the primary key. When the field Supplier_Number appears in the PART table, it is called a foreign key and is essentially a lookup field to look up data about the supplier of a specific part.

normailization

The conceptual database design describes how the data elements in the database are to be grouped. The design process identifies relationships among data elements and the most efficient way of grouping data elements together to meet business information requirements. The process also identifies redundant data elements and the groupings of data elements required for specific application programs. Groups of data are organized, refined, and streamlined until an overall logical view of the relationships among all the data in the database emerges. To use a relational database model effectively, complex groupings of data must be streamlined to minimize redundant data elements and awkward many-to-many relationships. The process of creating small, stable, yet flexible and adaptive data structures from complex groups of data is called normalization.

Primary Key

The field for Supplier_Number in the SUPPLIER table uniquely identifies each record so that the record can be retrieved, updated, or sorted. It is called a key field. Each table in a relational database has one field that is designated as its primary key. This key field is the unique identifier for all the information in any row of the table and this primary key cannot be duplicated. Supplier_Number is the primary key for the SUPPLIER table and Part_Number is the primary key for the PART table. Note that Supplier_Number appears in both the SUPPLIER and PART tables. In the SUPPLIER table, Supplier_Number is the primary key. When the field Supplier_Number appears in the PART table, it is called a foreign key and is essentially a lookup field to look up data about the supplier of a specific part.

foreign key (FK)

key field

Structured Query Language (SQL)

The most prominent data manipulation language today is Structured Query Language, or SQL

data warehouse

Data Warehouses and Data Marts

The traditional tool for analyzing corporate data has been the data warehouse. A data warehouse is a database that stores current and historical data of potential interest to decision makers throughout the company. The data originate in many core operational transaction systems, such as systems for sales, customer accounts, and manufacturing, and may include data from website transactions. The data warehouse extracts current and historical data from multiple operational systems inside the organization. These data are combined with data from external sources and transformed by correcting inaccurate and incomplete data and restructuring the data for management reporting and analysis before being loaded into the data warehouse. The data warehouse makes the data available for anyone to access as needed, but the data cannot be altered. A data warehouse system also provides a range of ad hoc and standardized query tools, analytical tools, and graphical reporting facilities. Companies often build enterprise-wide data warehouses, where a central data warehouse serves the entire organization, or they create smaller, decentralized warehouses called data marts. A data mart is a subset of a data warehouse in which a summarized or highly focused portion of the organization's data is placed in a separate database for a specific population of users. For example, a company might develop marketing and sales data marts to deal with customer information. Bookseller Barnes & Noble used to maintain a series of data marts—one for point-of-sale data in retail stores, another for college bookstore sales, and a third for online sales.

web mining

The web is another rich source of unstructured big data for revealing patterns, trends, and insights into customer behavior. The discovery and analysis of useful patterns and information from the World Wide Web are called web mining. Businesses might turn to web mining to help them understand customer behavior, evaluate the effectiveness of a particular website, or quantify the success of a marketing campaign. For instance, marketers use the Google Trends service, which tracks the popularity of various words and phrases used in Google search queries, to learn what people are interested in and what they are interested in buying. Web mining looks for patterns in data through content mining, structure mining, and usage mining. Web content mining is the process of extracting knowledge from the content of web pages, which may include text, image, audio, and video data. Web structure mining examines data related to the structure of a particular website. For example, links pointing to a document indicate the popularity of the document, while links coming out of a document indicate the richness or perhaps the variety of topics covered in the document. Web usage mining examines user interaction data recorded by a web server whenever requests for a website's resources are received. The usage data records the user's behavior when the user browses or makes transactions on the website and collects the data in a server log. Analyzing such data can help companies determine the value of particular customers, cross-marketing strategies across products, and the effectiveness of promotional campaigns.

Designing Databases

To create a database, you must understand the relationships among the data, the type of data that will be maintained in the database, how the data will be used, and how the organization will need to change to manage data from a companywide perspective. The database requires both a conceptual design and a physical design. The conceptual, or logical, design of a database is an abstract model of the database from a business perspective, whereas the physical design shows how the database is actually arranged on direct-access storage devices.

Online Analytical Processing (OLAP)

To obtain the answer, you would need online analytical processing (OLAP). OLAP supports multidimensional data analysis, enabling users to view the same data in different ways using multiple dimensions. Each aspect of information—product, pricing, cost, region, or time period—represents a different dimension. So, a product manager could use a multidimensional data analysis tool to learn how many washers were sold in the East in June, how that compares with the previous month and the previous June, and how it compares with the sales forecast. OLAP enables users to obtain online answers to ad hoc questions such as these in a fairly rapid amount of time, even when the data are stored in very large databases, such as sales figures for multiple years. Figure 6.14 shows a multidimensional model that could be created to represent products, regions, actual sales, and projected sales. A matrix of actual sales can be stacked on top of a matrix of projected sales to form a cube with six faces. If you rotate the cube 90 degrees one way, the face showing will be product versus actual and projected sales. If you rotate the cube 90 degrees again, you will see region versus actual and projected sales. If you rotate 180 degrees from the original view, you will see projected sales and product versus region. Cubes can be nested within cubes to build complex views of data. A company would use either a specialized multidimensional database or a tool that creates multidimensional views of data in relational databases.

Data Mining

Traditional database queries answer such questions as "How many units of product number 403 were shipped in February 2020?" OLAP, or multidimensional analysis, supports much more complex requests for information, such as "Compare sales of product 403 relative to plan by quarter and sales region for the past two years." With OLAP and query-oriented data analysis, users need to have a good idea about the information for which they are looking. Data mining is more discovery-driven. Data mining provides insights into corporate data that cannot be obtained with OLAP by finding hidden patterns and relationships in large databases and inferring rules from them to predict future behavior. The patterns and rules are used to guide decision making and forecast the effect of those decisions. The types of information obtainable from data mining include associations, sequences, classifications, clusters, and forecasts.

Text Mining and Web Mining

Unstructured data, most in the form of text files, is believed to account for more than 80 percent of useful organizational information and is one of the major sources of big data that firms want to analyze. Email, memos, call center transcripts, survey responses, legal cases, patent descriptions, and service reports are all valuable for finding patterns and trends that will help employees make better business decisions. Text mining tools are now available to help businesses analyze these data. These tools are able to extract key elements from unstructured natural language text, discover patterns and relationships, and summarize the information. Businesses might turn to text mining to analyze transcripts of calls to customer service centers to identify major service and repair issues or to measure customer sentiment about their company. Sentiment analysis software is able to mine text comments in an email message, blog, social media conversation, or survey forms to detect favorable and unfavorable opinions about specific subjects. For example, Kraft Foods uses a Community Intelligence Portal and sentiment analysis to tune into consumer conversations about its products across numerous social networks, blogs, and other websites. Kraft tries to make sense of relevant comments rather than just track brand mentions and can identify customers' emotions and feelings when they talk about how they barbecue and what sauces and spices they use. The web is another rich source of unstructured big data for revealing patterns, trends, and insights into customer behavior. The discovery and analysis of useful patterns and information from the World Wide Web are called web mining. Businesses might turn to web mining to help them understand customer behavior, evaluate the effectiveness of a particular website, or quantify the success of a marketing campaign. For instance, marketers use the Google Trends service, which tracks the popularity of various words and phrases used in Google search queries, to learn what people are interested in and what they are interested in buying. Web mining looks for patterns in data through content mining, structure mining, and usage mining. Web content mining is the process of extracting knowledge from the content of web pages, which may include text, image, audio, and video data. Web structure mining examines data related to the structure of a particular website. For example, links pointing to a document indicate the popularity of the document, while links coming out of a document indicate the richness or perhaps the variety of topics covered in the document. Web usage mining examines user interaction data recorded by a web server whenever requests for a website's resources are received. The usage data records the user's behavior when the user browses or makes transactions on the website and collects the data in a server log. Analyzing such data can help companies determine the value of particular customers, cross-marketing strategies across products, and the effectiveness of promotional campaigns.

big data

We now use the term big data to describe these data sets with volumes so huge that they are beyond the ability of typical DBMS to capture, store, and analyze. Big data is often characterized by the "3Vs": the extreme volume of data, the wide variety of data types and sources, and the velocity at which data must be processed. Big data doesn't designate any specific quantity but usually refers to data in the petabyte and exabyte range—in other words, billions to trillions of records, many from different sources. Big data are produced in much larger quantities and much more rapidly than traditional data. For example, a single jet engine is capable of generating 10 terabytes of data in just 30 minutes, and there are more than 100,000 airline flights each day. Twitter generates more than 12 terabytes of data daily. According to the International Data Center (IDC) technology research firm, data are more than doubling every two years, so the amount of data available to organizations is skyrocketing.

Assuring Data Quality

With today's organizations relying so heavily on data to drive operations and decision making, data quality assurance is especially important. What would happen if a customer's telephone number or account balance were incorrect? What would be the impact if the database had the wrong price for the product you sold? Data that are inaccurate, untimely, or inconsistent with other sources of information create serious operational and financial problems for businesses, even with a well-designed database and information policy. When faulty data go unnoticed, they often lead to incorrect decisions, product recalls, and even financial losses. Gartner Inc. reported that more than 25 percent of the critical data in large Fortune 1000 companies' databases is inaccurate or incomplete, including bad product codes and product descriptions, faulty inventory descriptions, erroneous financial data, incorrect supplier information, and incorrect employee data. Some of these data quality problems are caused by redundant and inconsistent data produced by multiple systems. For example, the sales ordering system and the inventory management system might both maintain data on the organization's products. However, the sales ordering system might use the term Item Number, and the inventory system might call the same attribute Product Number. The sales, inventory, or manufacturing systems of a clothing retailer might use different codes to represent values for an attribute. One system might represent clothing size as extra large, whereas the other system might use the code XL for the same purpose. During the design process for a database, data describing entities, such as a customer, product, or order, should be named and defined consistently for all business areas using the database. Think of all the times you've received several pieces of the same direct mail advertising on the same day. This is very likely the result of having your name maintained multiple times in a database. Your name may have been misspelled or you used your middle initial on one occasion and not on another or the information was initially entered onto a paper form and not scanned properly into the system. Because of these inconsistencies, the database would treat you as different people! We often receive redundant mail addressed to Laudon, Lavdon, Lauden, or Landon. If a database is properly designed and enterprise-wide data standards are established, duplicate or inconsistent data elements should be minimal. Most data quality problems, however, such as misspelled names, transposed numbers, or incorrect or missing codes, stem from errors during data input. The incidence of such errors is rising as companies move their businesses to the web and allow customers and suppliers to enter data into their websites that directly update internal systems.

The types of information obtainable from data mining include associations, sequences, classifications, clusters, and forecasts.

classifications, clusters, and forecasts. Associations are occurrences linked to a single event. For instance, a study of supermarket purchasing patterns might reveal that, when corn chips are purchased, a cola drink is purchased 65 percent of the time, but when there is a promotion, cola is purchased 85 percent of the time. This information helps managers make better decisions because they have learned the profitability of a promotion. In sequences, events are linked over time. We might find, for example, that if a house is purchased, a new refrigerator will be purchased within two weeks 65 percent of the time, and an oven will be bought within one month of the home purchase 45 percent of the time. Classification recognizes patterns that describe the group to which an item belongs by examining existing items that have been classified and by inferring a set of rules. For example, businesses such as credit card or telephone companies worry about the loss of steady customers. Classification helps discover the characteristics of customers who are likely to leave and can provide a model to help managers predict who those customers are so that the managers can devise special campaigns to retain such customers. Clustering works in a manner similar to classification when no groups have yet been defined. A data mining tool can discover different groupings within data, such as finding affinity groups for bank cards or partitioning a database into groups of customers based on demographics and types of personal investments. Although these applications involve predictions, forecasting uses predictions in a different way. It uses a series of existing values to forecast what other values will be. For example, forecasting might find patterns in data to help managers estimate the future value of continuous variables, such as sales figures.

data dictionary

data dictionary is an automated or manual file that stores definitions of data elements and their characteristics

Chapter 6-Foundations of Business Intelligence: Databases and Information Management

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