Basic of Intelligence Business: Database and Management

Chapter 6 – Summary
By: Dhivena Leanti Ardhan – 185020307141002
A. Organizing Data 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.

1. File Organization Terms and Concept

A computer system organizes data in a hierarchy that starts with bits and bytes and progresses
to fields, records, files, and databases

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. 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. 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.

2. Problems wtih the Traditional File Environment

In most organizations, systems tended to grow independently without a company-wide plan.
Accounting, finance, manufacturing, human resources, and sales and marketing all developed
their own systems and data files.

 Data Redundancy and Inconsistecy - Data redundancy is the presence of duplicate

data in multiple data files so that the same data are stored in more than 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.
Dataredundancy wastes storage resources and also leads to data inconsistency, where
the same attribute may have different values.
 Program-Data Dependance - 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.
 Lack Flexibility - 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.
 Poor Security - Because there is little control or management of data, access to and
dissemination of information may be out of control.
 Lack of Data Sharing and Availibility - 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

B. The Database Approach to Data Management

Database is a collection of data organized to serve many applications efficiently by
centralizing the data and controlling redundant data.

1. Database Management System

A software that permits 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.
2. Capabilities of Database Management Systems
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.

 Querying & Reporting: 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.

3. Designing Databases

 Normalization and Entity Relationship Diagrams: The process of creating small,

stable, yet flexible and adaptive data structures from complex groups of data is called
normalization.
 Non-Relational Databases: A database that does not use the tabular schema of rows
and columns found in most traditional database systems. Instead, non-relational
databases use a storage model that is optimized for the specific requirements of the
type of data being stored.
 Cloud Databases: A database that typically runs on a cloud computing platform, and
access to the database is provided as-a-service

C. Using Databases To Improve Business Performance And Decision Making

Business Intelligence Infrastucture
1. Data Warehouses
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
Web site transactions.

2. Data Marts
A subset of a data warehouse in which a summarized or highly foccused portion of the
organization’s data is placed in a separate database for a specific population of users.

3. Hadoop
An open source software framework managed by the Apache Software Foundation that
enables distributed parallel processing of huge amounts of data across inexpensive
computers.
4. In-Memory Computing
Another way of faciliating big data analysis which relies primarily on a cmputer’s main
memory (RAM) for data storage

5. Analytic Platforms
Using both relational and non-rational technology that are optimized for analyzing large data
sets.

Analytical Tools: Relationship, Patterns, Trends

1. 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.

2. Data Mining
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 types of information obtainable form data mining include (1) Associations: occurences
linked to a single event. (2) Sequences: events are linked over time. (3) 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. (4) Clustering: works in a
manner similar to classification when no groups have yet been defined, and (5) Forecasting:
uses predictions in a different way. It uses a series of existing values to forecast what other
values will be.

3. Text Mining and Web Mining

Text mining tools are now available to help businesses analyze these data. These tools are
able to extract key elements from large unstructured data sets, discover patterns and
relationships, and summarize the information. The Web is another rich source of valuable
information, some of which can now be mined for patterns, trends, and insights into customer
behavior. The discovery and analysis of useful patterns and information from the World Wide
Web is called Web mining.

D. Managing Data Resources

Setting up a database is only a start. In order 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 management.

1. Establishing an Information Policy

Specifies the organization’s rules for sharing, disseminating, acquiring, standardizing,
classifying, and inventorying information. Information policy lays out specific procedures
and accountabilities, identifying which users and organizational units can share information,
where information can be distributed, and who is responsible for updating and maintaining
the information. Data administration is responsible for the specific policies and procedures
through which data can be managed as an organizational resource. data governance used to
describe many of these activities.
2. Ensuring Data Quality
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 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.