Information Systems

Lecture 5: Data Warehouses and Business Intelligence

Dr. Sobhan Sarkar

PDF(University of Edinburgh), Ph.D.(IIT Kharagpur)
Assistant Professor
IIM Ranchi
Email: sobhan.sarkar@iimranchi.ac.in

IIM Ranchi
 Contents
1. Entity-Relationship Diagram
2. Normalization
3. Use of Databases
4. Data Warehouses
5. Data Mart
6. Components of a Data Warehouse
7. Business Intelligence (BI)
8. Drivers of BI
9. Online Analytical Processing (OLAP)
10. Multi-dimensional data model
11. References

IIM Ranchi
 Entity-Relationship Diagram

IIM Ranchi
 Entity-Relationship Diagram (Contd.)

IIM Ranchi
 Entity-Relationship Diagram (Contd.)

Note: Cardinality defines the possible number of occurrences in one entity which is associated with the number of
occurrences in another.
IIM Ranchi
 Entity-Relationship Diagram (Contd.)

IIM Ranchi
Normalization [2]
• Normalization is a database design technique that reduces data redundancy and eliminates undesirable
characteristics like Insertion, Update and Deletion Anomalies.
• Normalization rules divides larger tables into smaller tables and links them using relationships.
• The purpose of Normalisation in SQL is to eliminate redundant (repetitive) data and ensure data is stored logically.
• The inventor of the relational model Edgar Codd proposed the theory of normalization of data with the introduction
of the First Normal Form, and he continued to extend theory with Second and Third Normal Form.
• Later he joined Raymond F. Boyce to develop the theory of Boyce-Codd Normal Form.

Raymond F. Boyce was an American computer scientist who was known for his research in relational databases. He is best known for his work co-developing the
SQL database language and Boyce-Codd normal form.
IIM Ranchi
Normalization Types
•1NF (First Normal Form)
•2NF (Second Normal Form)
•3NF (Third Normal Form)
•BCNF (Boyce-Codd Normal Form)
•4NF (Fourth Normal Form)
•5NF (Fifth Normal Form)
•6NF (Sixth Normal Form)

IIM Ranchi
 1NF (First Normal Form) Rules
•Each table cell should contain a single value.
•Each record needs to be unique.

IIM Ranchi
 2NF (Second Normal Form) Rules
•Rule 1- Be in 1NF
•Rule 2- Single Column Primary Key that does not functionally dependent on any subset of candidate key relation

IIM Ranchi
 3NF (Third Normal Form) Rules
•Rule 1- Be in 2NF
•Rule 2- Has no transitive functional dependencies

We have again divided our

tables and created a new table
which stores Salutations.
There are no transitive
functional dependencies, and
hence our table is in 3NF
In Table 3, Salutation ID is
primary key, and in Table 1,
Salutation ID is foreign to
primary key in Table 3

IIM Ranchi
 BCNF (Boyce-Codd Normal Form)
Even when a database is in 3rd Normal Form, still there would be anomalies resulted if it has more than
one Candidate Key.
Sometimes is BCNF is also referred as 3.5 Normal Form.

4NF (Fourth Normal Form) Rules

If no database table instance contains two or more, independent and multivalued data describing the relevant
entity, then it is in 4th Normal Form.

5NF (Fifth Normal Form) Rules

A table is in 5th Normal Form only if it is in 4NF and it cannot be decomposed into any number of smaller tables
without loss of data.

6NF (Sixth Normal Form) Proposed

6th Normal Form is not standardized, yet however, it is being discussed by database experts for some time.

IIM Ranchi
Use of Databases

IIM Ranchi
 Data Warehouses
• A data warehouse is a type of data management system that is designed to enable and support business intelligence
(BI) activities, especially analytics.
• Data warehouses are solely intended to perform queries and analysis and often contain large amounts of historical
data.
• The data within a data warehouse is usually derived from a wide range of sources such as application log files and
transaction applications.
• A data warehouse centralizes and consolidates large amounts of data from multiple sources.
• Its analytical capabilities allow organizations to derive valuable business insights from their data to improve decision-
making.
• Over time, it builds a historical record that can be invaluable to data scientists and business analysts.
• Because of these capabilities, a data warehouse can be considered an organization’s “single source of truth.”

IIM Ranchi
 A typical data warehouse often includes the following elements:
•A relational database to store and manage data
•An extraction, loading, and transformation (ELT) solution for preparing the data for analysis
•Statistical analysis, reporting, and data mining capabilities
•Client analysis tools for visualizing and presenting data to business users
•Other, more sophisticated analytical applications that generate actionable information by applying data science and
artificial intelligence (AI) algorithms, or graph and spatial features that enable more kinds of analysis of data at scale

Benefits of a Data Warehouse

•Subject-oriented. They can analyze data about a particular subject or functional area (such as sales).
•Integrated. Data warehouses create consistency among different data types from disparate sources.
•Nonvolatile. Once data is in a data warehouse, it’s stable and doesn’t change.
•Time-variant. Data warehouse analysis looks at change over time.

IIM Ranchi
 Data Mart
• A data mart is a data warehouse that serves the needs of a specific team or business unit, like finance,
marketing, or sales.
• It is smaller, more focused, and may contain summaries of data that best serve its community of users.
• A data mart might be a portion of a data warehouse, too.

IIM Ranchi
 Difference between data warehouse and data mart [3]

IIM Ranchi
 Components of a Data Warehouse

IIM Ranchi
 Business Intelligence (BI)

IIM Ranchi
 Drivers of BI

IIM Ranchi
Online Analytical Processing (OLAP)

IIM Ranchi
 OLAP vs OLTP

IIM Ranchi
Multi-dimensional data model

IIM Ranchi
References
[1] Laudon, K. C., & Laudon, J. P. (2004). Management information systems: Managing the digital firm. Pearson Educación.
[2] https://www.guru99.com/database-normalization.html
[3] https://aws.amazon.com/data-warehouse/

IIM Ranchi
IIM Ranchi