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A data warehouse is a large store of data accumulated from a wide range of sources within a
company and used to guide management decisions.
A data warehouse is constructed by integrating data from multiple heterogeneous sources. It
supports analytical reporting, structured and/or ad hoc queries and decision making.
There are decision support technologies that help utilize the data available in a data
warehouse. These technologies help executives to use the warehouse quickly and
effectively. They can gather data, analyze it, and take decisions based on the information
present in the warehouse. The information gathered in a warehouse can be used in any of the
following domains −
• It possesses consolidated historical data, which helps the organization to analyze its
business.
• A data warehouse helps executives to organize, understand, and use their data to take
strategic decisions.
• Time Variant − The data collected in a data warehouse is identified with a particular
time period. The data in a data warehouse provides information from the historical
point of view.
• Non-volatile − Non-volatile means the previous data is not erased when new data is
added to it. A data warehouse is kept separate from the operational database and
therefore frequent changes in operational database is not reflected in the data
warehouse.
• Financial services
• Banking services
• Consumer goods
• Retail sectors
• Controlled manufacturing
Types of Data Warehouse
Information processing, analytical processing, and data mining are the three types of data
warehouse applications that are discussed below −
• Information Processing − A data warehouse allows to process the data stored in it.
The data can be processed by means of querying, basic statistical analysis, reporting
using crosstabs, tables, charts, or graphs.
Metadata
Metadata is simply defined as data about data. The data that are used to represent other data
is known as metadata. For example, the index of a book serves as a metadata for the contents
in the book. In other words, we can say that metadata is the summarized data that leads us to
the detailed data.
• Metadata acts as a directory. This directory helps the decision support system to
locate the contents of a data warehouse.
Metadata Repository
Metadata repository is an integral part of a data warehouse system. It contains the following
metadata −
Data Mart
Data marts contain a subset of organization-wide data that is valuable to specific groups of
people in an organization. In other words, a data mart contains only those data that is
specific to a particular group. For example, the marketing data mart may contain only data
related to items, customers, and sales. Data marts are confined to subjects.
• The implementation cycle of a data mart is measured in short periods of time, i.e., in
weeks rather than months or years.
• The life cycle of data marts may be complex in the long run, if their planning and
design are not organization-wide.
Note − Before loading the data into the data warehouse, the information extracted from the
external sources must be reconstructed.
Note − Consistency checks are executed only when all the data sources have been loaded
into the temporary data store.
• within itself.
• with other data within the same data source.
• with the data in other source systems.
• with the existing data present in the warehouse.
Transforming involves converting the source data into a structure. Structuring the data
increases the query performance and decreases the operational cost. The data contained in a
data warehouse must be transformed to support performance requirements and control the
ongoing operational costs.
Aggregation
Aggregation is required to speed up common queries. Aggregation relies on the fact that
most common queries will analyze a subset or an aggregation of the detailed data.
For example, in a retail sales analysis data warehouse, it may be required to keep data for 3
years with the latest 6 months data being kept online. In such as scenario, there is often a
requirement to be able to do month-on-month comparisons for this year and last year. In this
case, we require some data to be restored from the archive.
• ensures that all the system sources are used in the most effective way.
The information generated in this process is used by the warehouse management process to
determine which aggregations to generate. This process does not generally operate during
the regular load of information into data warehouse.
• Bottom Tier − The bottom tier of the architecture is the data warehouse database
server. It is the relational database system. We use the back end tools and utilities to
feed data into the bottom tier. These back end tools and utilities perform the Extract,
Clean, Load, and refresh functions.
• Middle Tier − In the middle tier, we have the OLAP Server that can be implemented
in either of the following ways.
Typically, OLTP systems are used for order entry, financial transactions,
customer relationship management (CRM) and retail sales. Such systems
have a large number of users who conduct short transactions.
Sr.No. Data Warehouse (OLAP) Operational Database(OLTP)
2 OLAP systems are used by OLTP systems are used by clerks, DBAs,
knowledge workers such as or database professionals.
executives, managers, and analysts.
12 The database size is from 100GB to The database size is from 100 MB to 100
100 TB. GB.
Decision-making is a daily activity for any human being. There is no exception about that.
When it comes to business organizations, decision-making is a habit and a process as well.
Effective and successful decisions result in profits, while unsuccessful ones cause losses.
Therefore, corporate decision-making is the most critical process in any organization.
In addition, we may make our own private decisions or may prefer a collective decision.
Decision-Making Process
Following are the important steps of the decision-making process. Each step may be
supported by different tools and techniques.
In the process of solving the problem, you will have to gather as much as information related
to the factors and stakeholders involved in the problem. For the process of information
gathering, tools such as 'Check Sheets' can be effectively used.
Step 3: Principles for Judging the Alternatives
In this step, the baseline criteria for judging the alternatives should be set up. When it comes
to defining the criteria, organizational goals as well as the corporate culture should be taken
into consideration.
As an example, profit is one of the main concerns in every decision making process.
Companies usually do not make decisions that reduce profits, unless it is an exceptional
case. Likewise, baseline principles should be identified related to the problem in hand.
For this, you can make use of Cause-and-Effect diagrams and Pareto Chart tool. Cause-and-
Effect diagram helps you to identify all possible causes of the problem and Pareto chart
helps you to prioritize and identify the causes with the highest effect.
Then, you can move on generating all possible solutions (alternatives) for the problem in
hand.
• Identifying the important criteria for the process and the result,
The normative model of decision-making considers constraints that may arise in making
decisions, such as time, complexity, uncertainty, and inadequacy of resources.
• Judgmental heuristics - A person may use shortcuts to simplify the decision making
process.
Dynamic Decision-Making
Dynamic decision-making (DDM) is synergetic decision-making involving interdependent
systems, in an environment that changes over time either due to the previous actions of the
decision-maker or due to events that are outside of the control of the decision-maker.
Dynamic decision-making involves observing how people used their experience to control
the system's dynamics and noting down the best decisions taken thereon.
Sensitivity Analysis
Sensitivity analysis is a technique used for distributing the uncertainty in the output of a
mathematical model or a system to different sources of uncertainty in its inputs.
From business decision perspective, the sensitivity analysis helps an analyst to identify cost
drivers as well as other quantities to make an informed decision. If a particular quantity has
no bearing on a decision or prediction, then the conditions relating to quantity could be
eliminated, thus simplifying the decision making process.
• Resource optimization
• Future data collections
• Identifying critical assumptions
• To optimize the tolerance of manufactured parts
Static and Dynamic Models
Static models:
• Show the value of various attributes in a balanced system.
• Do not work well in real-time systems however, it may work in a dynamic system
being in equilibrium
Dynamic models:
Some of the typical business problem areas where simulation techniques are used are:
• Inventory control
• Queuing problem
• Production planning
Operations Research Techniques
Operational Research (OR) includes a wide range of problem-solving techniques involving
various advanced analytical models and methods applied. It helps in efficient and improved
decision-making.
Heuristic Programming
Heuristic programming refers to a branch of artificial intelligence. It consists of programs
that are self-learning in nature.
However, these programs are not optimal in nature, as they are experience-based techniques
for problem solving.
Heuristics take a 'guess' approach to problem solving, yielding a 'good enough' answer,
rather than finding a 'best possible' solution.
Group Decision-Making
In group decision-making, various individuals in a group take part in collaborative decision-
making.
Group Decision Support System (GDSS) is a decision support system that provides support
in decision making by a group of people. It facilitates the free flow and exchange of ideas
and information among the group members. Decisions are made with a higher degree of
consensus and agreement resulting in a dramatically higher likelihood of implementation.
• Decision Network: This type helps the participants to communicate with each other
through a network or through a central database. Application software may use
commonly shared models to provide support.
• Decision Room: Participants are located at one place, i.e. the decision room. The
purpose of this is to enhance participant's interactions and decision-making within a
fixed period of time using a facilitator.
• Teleconferencing: Groups are composed of members or sub groups that are
geographically dispersed; teleconferencing provides interactive connection between
two or more decision rooms. This interaction will involve transmission of
computerized and audio visual information.
Decision support systems (DSS) are interactive software-based systems intended to help
managers in decision-making by accessing large volumes of information generated from
various related information systems involved in organizational business processes, such as
office automation system, transaction processing system, etc.
DSS uses the summary information, exceptions, patterns, and trends using the analytical
models. A decision support system helps in decision-making but does not necessarily give a
decision itself. The decision makers compile useful information from raw data, documents,
personal knowledge, and/or business models to identify and solve problems and make
decisions.
Programmed decisions are basically automated processes, general routine work, where:
• These decisions are based on the manger's discretion, instinct, perception and
judgment.
• Support for managers at various managerial levels, ranging from top executive to line
managers.
• Support for individuals and groups. Less structured problems often requires the
involvement of several individuals from different departments and organization
level.
Benefits of DSS
• Improves efficiency and speed of decision-making activities.
Components of a DSS
Following are the components of the Decision Support System:
• Model Management System: It stores and accesses models that managers use to
make decisions. Such models are used for designing manufacturing facility,
analyzing the financial health of an organization, forecasting demand of a product or
service, etc.
Support Tools: Support tools like online help; pulls down menus, user interfaces,
graphical analysis, error correction mechanism, facilitates the user interactions with
the system.
Classification of DSS
There are several ways to classify DSS. Hoi Apple and Whinstone classifies DSS as follows:
• Text Oriented DSS: It contains textually represented information that could have a
bearing on decision. It allows documents to be electronically created, revised and
viewed as needed.
• Database Oriented DSS: Database plays a major role here; it contains organized and
highly structured data.
• Rules Oriented DSS: Procedures are adopted in rules oriented DSS. Export system
is the example.
• Compound DSS: It is built by using two or more of the five structures explained
above.
Types of DSS
Following are some typical DSSs:
• Data Analysis System: It needs comparative analysis and makes use of formula or
an algorithm, for example cash flow analysis, inventory analysis etc.
• Information Analysis System: In this system data is analyzed and the information
report is generated. For example, sales analysis, accounts receivable systems, market
analysis etc.
• Accounting System: It keeps track of accounting and finance related information, for
example, final account, accounts receivables, accounts payables, etc. that keep track
of the major aspects of the business.
• Model Based System: Simulation models or optimization models used for decision-
making are used infrequently and creates general guidelines for operation or
management.
GDSS
A group decision support system (GDSS) is an interactive computer based system that
facilitates a number of decision-makers (working together in a group) in finding solutions to
problems that are unstructured in nature2. They are designed in such a way that they take
input from multiple users interacting simultaneously with the systems to arrive at a decision
as a group.
The tools and techniques provided by group decision support system improve the quality and
effectiveness of the group meetings. Groupware and web-based tools for electronic meetings
and videoconferencing also support some of the group decision making process, but their
main function is to make communication possible between the decision makers.
In a group decision support system (GDSS) electronic meeting, each participant is provided
with a computer. The computers are connected to each other, to the facilitator’s computer and
to the file server. A projection screen is available at the front of the room. The facilitator and
the participants can both project digital text and images onto this screen.
A group decision support system (GDSS) meeting comprises different phases, such as idea
generation, discussion, voting, vote counting and so on. The facilitator manages and controls
the execution of these phases. The use of various software tools in the meeting is also
controlled by the facilitator.
• Ease of Use: It consists of an interactive interface that makes working with GDSS
simple and easy.
• Better Decision Making: It provides the conference room setting and various
software tools that facilitate users at different locations to make decisions as a
group resulting in better decisions.
• Emphasis on Semi-structured and Unstructured Decisions: It provides
important information that assists middle and higher level management in making
semi-structured and unstructured decisions.
• Specific and General Support: The facilitator controls the different phases of the
group decision support system meeting (idea generation, discussion, voting and
vote counting etc.) what is displayed on the central screen and the type of ranking
and voting that takes place, etc. In addition, the facilitator also provides general
support to the group and helps them to use the system.
• Supports all Phases of the Decision Making: It can support all the four phases of
decision making, viz intelligence, design, choice and implementation.
• Supports Positive Group Behavior: In a group meeting, as participants can share
their ideas more openly without the fear of being criticized, they display more
positive group behavior towards the subject matter of the meeting.
Group decision support system software tools helps the decision makers in organizing their
ideas, gathering required information and setting and ranking priorities. Some of these tools
are as follows:
Groupware:
Groupware refers to programs that help people work together collectively while located
remotely from each other. Programs that enable real time collaboration are called synchronous
groupware. Groupware services can include the sharing of calendars, collective writing, e-mail
handling, shared database access, electronic meetings with each person able to see and
display information to others, and other activities. Sometimes called collaborative software,
groupware is an integral component of a field of study known as Computer-Supported
Cooperative Work or CSCW.
Groupware is often broken down into categories describing whether or not work group
members collaborate in real time (synchronous groupware and asynchronous groupware).
Some product examples of groupware include Lotus Notes and Microsoft Exchange, both of
which facilitate calendar sharing, e-mail handling, and the replication of files across a
distributed system so that all users can view the same information. Electronic "face-to-face"
meetings are facilitated by CU-SeeMe and Microsoft NetMeeting.