Module 5: Data Management

Readings
Required
• Chapter 4 in Managing Information Technology
Oracle. (May, 2011). Enterprise information management: Best practices in data
governance. Retrieved from
http://www.oracle.com/technetwork/articles/entarch/oea-best-practices-data-
gov-400760.pdf
For Your Success & Learning Objectives
Check the Interactive Lecture in Schoology.

1. Data management

In Chapter 4 of the textbook, the data resource is described as an organizational

resource that must be managed like other resources (e.g., capital, human, and
facilities). Every manager has a responsibility for managing data; a list of specific
responsibilities is provided. Data ownership can be a difficult political issue in
organizations; such politics can make managing data as a shared resource a
complicated process.

There are several key principles to managing data. These include the following:
• The need to manage data is permanent.
• Data can exist at several levels within the organization.
• Application software should be separate from the database.
• Application software can be classified by how it treats data.
• Application software should be considered disposable.
• Data should be captured once.
• There should be strict data standards.

View more about these key principles below:

The need to manage data is permanent:
Data values may change, but a company will always have customers, products,
employees, etc., about which it needs to keep current data. Business processes will
change, but only the programs will need to be rewritten.

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Data can exist at several levels within an organization:
Most new data are captured in operational databases. Managerial and strategic
databases are typically subsets, summaries, or aggregates of operational databases. If
managerial databases are constructed from external sources, there may be problems
with data consistency.

Applications software should be separate from the database:

Application independence equates to separation or decoupling of data from
applications systems. Raw data should be captured and stored. When needed, data
are retrieved but not consumed. Data are transferred to other parts of the
organization when authorized. The meaning and structure of data are not hidden
from other applications.

Applications software can be classified by how it treats data:

• Data capture: gather data and populate the database.
• Data transfer: move data from one database to another or otherwise bring data
together.
Data analysis and presentation: provide data and information to authorized persons.

Applications software should be considered disposable:

Due to application independence, a company can replace the capture, transfer, and
presentation software modules separately if necessary. Applications and data are not
intertwined. Aging systems do not need to be retained because of the need to access
the data stored in them.

Data should be captured once:

It is too costly to capture data multiple times and reconcile across applications.
Instead, data should be captured once and synchronized across different databases.
Data architecture should include an inventory of data and a plan to distribute data.

There should be strict data standards:

Data must be clearly identified and defined so that all users know exactly what they
are manipulating. Only business managers have the knowledge necessary to set data
standards. Database contents must be unambiguously described, and stored in a
metadata repository or data dictionary/directory (DD/D).

Data management processes are key to data management success. Below is an

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outline of an effective, efficient data management process. You may wish to print this
out and save it for future use.

Data Management Process

• Plan: develop a blueprint for data and the relationships among data across business
units and functions.
• Source: identify the timeliest and highest-quality source for each data element.
• Acquire and maintain: build data capture systems to acquire and maintain data.
• Define/describe and inventory: define each data entity, element, and relationship
that is being managed.
• Organize and make accessible: design the database so that data can be retrieved
and reported efficiently in the format that business managers require. One
popular method to make data accessible is to create a data warehouse.
• Control quality and integrity: controls must be stored as part of data definitions and
enforced during data capture and maintenance.
• Protect and secure: define rights that each manager has to access each type of data.
• Account for use: cost to capture, maintain, and report data must be identified and
reported with an accounting system.
• Recover/restore and upgrade: establish procedures for recovering damaged and
upgrading obsolete hardware and software.
• Determine retention and dispose: decide, on legal and other grounds, how much
data history needs to be kept.
Train and consult for effective use: train users to use data effectively.

Continue your learning. Check out this video on the top 10 mistakes in data
management:
https://youtu.be/5Pl671FH6MQ

2. business intelligence – looking at data for strategic and operational

planning
The boundary between business and technology erodes more and more as
organizational managers recognize how integral knowledge and information
management are to the bottom line. If our business environment requires profits to
be driven by the exploitation of information, then it is critical for those business
managers to understand what kinds of value lie within a company’s information and
how to unlock that value and transform it into profits.

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One of the most important topics that senior management faces is how to exploit data
flowing from ERP, CRM, SCM, and other applications software systems to develop a
consolidated view of high-quality data presenting critical views of business
information. Business intelligence (BI) incorporates the tools, methods, and processes
needed to transform data into actionable knowledge.

BI encompasses the processes, technologies, and tools needed to turn data into
information, information into knowledge, and knowledge into plans that drive
profitable business action. BI encompasses data warehousing, business analytic tools,
and content/knowledge management.

The value of BI comes from the processes for delivering actionable knowledge to the
end users, the processes for acting upon that knowledge, and the right people willing
to take action. In order for BI to effectively create business value, we must understand
what “business questions” an organization’s management want answered. Answering
these business questions requires an organization’s leadership to analyze data,
discover, and exploit information to achieve a competitive business advantage.
Loshin (2013) suggests considering a straightforward approach for evaluating the
value of a BI program. The approach looks at business processes, their source of
derived or generated value, performance measures, and where the absence of
knowledge impedes the complete achievement of business success.

Loshin (2013) developed a high-level overview encompassing at least four

dimensions of value:
• Financial value associated with increased profitability, whether derived from
lowered costs or increased revenues
• Productivity value associated with increased throughput with decreased workloads,
diminished time for executing end-to-end processes, and increasing the
percentage of high-quality products or outcomes
• Trust value, such as greater customer, employee, or supplier satisfaction, as well as
increasing confidence in forecasting, maintaining consistent operational and
management reports, reductions in time spent in “analysis paralysis,” and better
results from decisions
• Risk value associated with improved visibility into credit exposure, confidence in
capital and asset investments, and auditable compliance with jurisdictional and
industry standards and regulations.

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However it is discovered, knowledge is of little value if there is no value-producing
action that is taken. A BI system that delivered information to stakeholders unwilling
or unable to act on it is destined for failure. Thus it is imperative that firms evaluate all
dimensions of value when assembling business questions and other strategic, tactical,
and operational requirements.

When senior management evaluates the value-creating performance of a business

intelligence system they typically ask the questions, “Am I using the full capabilities of
business intelligence in all segments of my value chain?” “What else could I be
doing?”

Loshin (2013) developed several business intelligence use cases for both horizontal
(corresponding to a value chain) and vertical (industries which use BI extensively).
Review the following list of the use cases:

Horizontal Use Cases for Business Intelligence

Customer Analysis
• Customer profiling: customer analytics encompass the continuous refinement of
individual customer profiles that incorporate demographic, psychographic, and
behavioral data about each individual
• Personalization: the process of crafting a presentation to the customer based on
that customer’s profile
• Collaborative filtering: evaluates the similarity between the preferences of groups of
customers with hopes of creating cross-sell and up-sell opportunities
• Customer satisfaction: profiles provide valuable customer information to those
individuals charged with customer satisfaction
• Customer lifetime value: refers to a measure of a customer’s profitability over the
lifetime of the relationship
Customer loyalty: a company’s best customers are its current customers

Revenue Generation
• Targeted marketing
• Cross-selling and up-selling
• Market development
• Loyalty management

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Human Resources and Staff Utilization
• Salary and compensation modeling
• Productivity and utilization
• Improved project delivery
• Call center utilization and optimization
• Production effectiveness

Product Management, Productivity Analysis, and Cost Management

• Price modeling
• Product customization
• Distribution analysis
• Manufacturing efficiency
• Spend analysis
• Asset management and resource planning

Operations
• Defect analysis
• Capacity planning and optimization
• Site location
• First-call resolution

Finance and Risk Management

• Financial reporting
• Risk management
• Fraud and abuse detection
• Credit risk analysis

Supply Chain Management

• Supplier performance
• Just-in-time
• Portfolio/demand/inventory analysis
• Supplier and vendor management
• Shipping
• Inventory control
• Distribution analysis

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Sales Channel Analytics
• Marketing
• Sales performance and pipeline

Behavior Analysis
• Purchasing trends
• Web activity
• Customer attrition
• Social network analysis
• Sentiment analysis

Vertical Use Cases for Business Intelligence

• Healthcare
• Logistics/supply chain
• Telecommunications
• Retail
• Financial services/insurance
• Manufacturing
• Hospitality
• Energy services
In closing, business intelligence is a rapidly growing segment of a firm’s data
management portfolio. Firms must effectively manage their transactional application
systems if they hope to extract accurate transaction data and transform the data into
actionable knowledge for strategic, tactical, and operational planning and decision-
making. As future business leaders, you will be charged with managing one of the
organization’s most important assets, its data.

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