Chapter 3

Descriptive Analytics II: Business

Intelligence And Data
Warehousing

Dr.Ghadah Adel

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 Learning Objectives
3.2 Business Intelligence AND Data Warehousing
3.3 Data Warehousing Process
3.4 Data Warehousing Architectures
3.5 Data Integration AND THE Extraction, Transformation, AND
Load (Etl) Processes
3.6 Data Warehouse Development
3.7 Data Warehousing Implementation Issues
3.8 Data Warehouse Administration, Security Issues, AND
Future Trends
3.9 Business Performance Management
3.10 Performance Measurement
3.11 Balanced Scorecards
3.12 Six Sigma AS A Performance Measurement System

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 Data warehouse
• A data warehouse is a pool of data produced to support decision
making.
• Characteristics
– Subject oriented: data is stored by subjects not by operations
such as customer. A DW doesn’t focus on the ongoing operations
rather it focus on modelling and analysis of data for decision
making.
– Integrated : data comes from several operational systems. This
integration enhances the effectiveness analysis of data.
– Time-variant : the data collected in data warehouse is identified
with a particular time period. The data in DW provides
information from the historical point of view.
– Nonvolatile: previous data is not erased when new data is added
to it. A DW is kept separated from operational database
therefore frequent changes in operational database is not
reflected in DW.
3 – Data Granularity: in DW, it is efficient to keep data summarized at
 Database vs Data warehouse
Data warehouse
Support analysis and
performance reporting
Read and export data
Multiple years of history
Data is updated on scheduled
process
100 GB to TB
Summarized and merged
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Database System
Support operational processes
Read and modify data
Current data
Data is updated when
transaction occur
100 MG to GB
Primitive and highly detailed
 Types of Data warehouse
• An ODS (Operational Data Store) is the database which
allows to process the data stored on it. The data can be
stored by the means of querying , basic statistical
analysis reporting using tables ,charts and graphs.
• An EDW (Enterprise Data Warehouse) is an
all-encompassing DW that covers all subject areas of
interest to the entire organization. It support analytical
processing for the information stored on it.
• A data mart (DM) is a smaller DW designed around one
problem, organizational function, topic, or other suitable
focus area. It supports knowledge discovery using
visualization tools.

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 Metadata
• Metadata, “data about data,” describe the structure
of and some meaning about data, thereby
contributing to their effective or ineffective use.
• Metadata are the means through which
– applications and users access the content of a data
warehouse
– security is managed
• Indeed, the use of metadata, which enable data
access through names and logical relationships
rather than physical locations, is fundamental to the
very concept of a DBMS.

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 Data warehousing process
• The data warehousing process consists of the
following steps:
1. Data are imported from various internal and external
sources
2. Data are cleansed and organized consistently with the
organization’s needs
3. Data are loaded into the enterprise data warehouse, or
4. Data are loaded into data marts.
5. If desired, data marts are created as subsets of the EDW
6. The data marts are consolidated into the EDW
7. Analyses are performed as needed

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 DW Architecture
• Two-tiered architecture, the application and
data warehouse reside on the same machine.
• Three-tiered architecture, they are on separate
machines.
• Both provide the same user visibility through a
client system that accesses a DSS/BI application
remotely.

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 3-tier DW Architectures
architecture

2-tier
architecture

Slide 3-9
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Factors to consider when choosing data

warehouse architecture
1. Information nature between organizational units
2. Upper management’s information needs
3. Urgency of need for a data warehouse
4. Nature of end-user tasks
5. Constraints on resources
6. Compatibility with existing systems
7. Ability of the in-house IT staff
8. Technical issues
9.Social/political factors
 Components of a data warehouse
• Data sources. Data are sourced from operational systems and possibly from
external data sources.
• Data extraction and transformation. Data are extracted and properly
transformed using custom-written or commercial software called ETL.
• Data loading. Data are loaded into a staging area, where they are
transformed and cleansed. The data are then ready to load into the data
warehouse.
• Comprehensive database. This is the EDW that supports decision analysis by
providing relevant summarized and detailed information.
• Metadata. Metadata are maintained for access by IT personnel and users.
Metadata include rules for organizing data summaries that are easy to index
and search.
• Middleware tools. Middleware tools enable access to the data warehouse
from a variety of front-end applications. It enables access to the data
warehouse. It can use to interact with data stored in the data repositories for
visualization

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Data Integration and the Extraction,

Transformation, and Load Process
• Data integration is an umbrella term that covers three processes that
combine to move data from multiple sources into a data warehouse:
– Accessing the data
– Combining different views of the data
– Capturing changes to the data.

• Extraction: selecting data from one or more sources and reading the
selected data.
• Transformation: converting data from their original form to whatever form
the DW needs. This step often also includes cleansing of the data to remove
as many errors as possible.
• Load: putting the converted (transformed) data into the DW.

• Since ETL is the process through which data are loaded into a data
warehouse, a DW could not exist without it. The ETL process also contributes
to the quality of the data in a DW.
Data Integration and the Extraction,
Transformation, and Load Process

Slide 3-13
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.Benefits of data warehouses

1. Allowing end users to perform extensive analysis in
numerous ways.
2. A consolidated view of corporate data (i.e., a single version of
the truth).
3. Better and more timely information. A data warehouse
permits information processing to be offloaded from costly
operational systems onto low-cost servers; therefore,
end-user information requests can be processed more
quickly.
4. Enhanced system performance. A data warehouse frees
production processing because some operational system
reporting requirements are moved to DSS.
5. Simplification of data access.
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Analysis of Data warehouse

• OLTP is a transactional processing while OLAP is an analytical
processing system. OLTP is an online database modifying system
whether OLAP is an online database as querying answering system.
OLAP OLTP Criteria
Knowledgeable person Normal experience person Types of users
Decision support. Used to Day to day functions. Used Functions
analyze the business. to run the business
Historical Current Data
Only read Read and write Access
Information as output and Data input and detailed Focus
summarized relation view of data.
multidimensional view of
data.
millions 100s No of records
> TB Max GB Database size
 OLAP Operations
• The main operational structure in OLAP is based on a
concept called cube. A cube in OLAP is a
multidimensional data structure (actual or virtual) that
allows fast analysis of data.

– Slice - a subset of a multidimensional array

– Dice - a slice on more than two dimensions
– Drill Down/Up - navigating among levels of data ranging from
the most summarized (up) to the most detailed (down)
– Roll Up - computing all of the data relationships for one or
more dimensions
– Pivot - used to change the dimensional orientation of a report
or an ad hoc query-page display
Slide 3-16
Slicing
OLAP
Operations
on a Simple
Tree-Dimensi
onal
Data Cube

Slide 3-17
 Massive DW and Scalability
• Scalability
– The main issues affecting to scalability:
• The amount of data in the warehouse
• How quickly the warehouse is expected to grow
• The number of concurrent users
• The complexity of user queries
– Good scalability means that queries and other
data-access functions will grow linearly with the
size of the warehouse

Slide 3-18
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Security and confidentiality of customer

data in its data warehouse
• Step 1. Establishing effective corporate and security
policies and procedures. An effective security policy
should start at the top and be communicated to
everyone in the organization.
• Step 2. Implementing logical security procedures and
techniques to restrict access. This includes user
authentication, access controls, and encryption.
• Step 3. Limiting physical access to the data center
environment.
• Step 4. Establishing an effective internal control review
process for security and privacy.
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Business performance management

(BPM)
• Business performance management (BPM) refers to the
business processes, methodologies, metrics, and
technologies used by enterprises to measure, monitor,
and manage business performance.
• It is also known as corporate performance management
(CPM), enterprise performance management (EPM), and
strategic enterprise management (SEM).
• BPM encompasses a closed-loop(ability to self –correct
by providing feedback) set of processes that link strategy
to execution in order to optimize business performance.
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Components of a BPM system

1. A set of integrated, closed-loop management and
analytic processes (supported by technology) that
addresses financial as well as operational activities.
2. Tools for businesses to define strategic goals and then
measure and manage performance against those goals.
3. A set of processes, including financial and operational
planning, consolidation and reporting, modeling,
analysis, and monitoring of key performance indicators
(KPIs), linked to organizational strategy.
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Phases of the BPM cycle

• First is to strategize. This involves answering the question,
“Where do we want to go?”, and involves a high-level, long-term
plan. Missions, visions, and objectives are key components of
this phase.
• The second phase is to plan, which answers the question, “How
do we get there?” Key elements here are a detailed operational
plan and a financial plan including budget.
• The next phase is to monitor and analyze, which answers the
question, “How are we doing?” Here is where KPIs, dashboards,
reporting, and analytics are helpful.
• Finally come action and adjustment, based on comparing our
analysis results against our plans. Sometimes this means
changing the way we operate, and sometimes it means adjusting
our strategy.
A Closed-Loop Process to Optimize
Business Performance

Strategy is the art and the science of

crafting decisions that help businesses
achieve their goals. More specifically, it is
the process of identifying and stating the
organization’s mission, vision, and
objectives. Business strategy provides an
overall direction to the enterprise, which is
why it is so important.

Slide 3-23
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Performance management system

• The purpose of a performance management system is to:

a. Identify and clarify the strategic mission, goals, and objectives of an

organization.
b. Assist managers in tracking the implementations of business
strategy by comparing actual results against these strategic goals
and objectives.

A performance measurement system typically comprises

systematic methods of setting business goals together
with periodic feedback reports that indicate progress
against goals.
This is a key and necessary element of the BPM process.
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Key performance indicator (KPI)

• Key performance indicator (KPI) is an operational
metrics that are used to measure performance.
• The key features are strategy, targets, ranges,
encodings, time frames, and benchmarks.
• KPIs represent strategic objectives and measure
performance against specific targets, based on specified
ranges of values.
• Encodings provide visual cues (e.g., color) to indicate
how close or far from a target we are on a particular
metric.
• Benchmarks provide something to compare against.
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Most commonly operational areas for KPIs

• Customer performance. Metrics for customer satisfaction,
speed and accuracy of issue resolution, and customer
retention.
• Service performance. Metrics for service-call resolution
rates, service renewal rates, service-level agreements,
delivery performance, and return rates.
• Sales operations. New pipeline accounts, sales meetings
secured, conversion of inquiries to leads, and average call
closure time.
• Sales plan/forecast. Metrics for price-to-purchase accuracy,
purchase order-to- fulfillment ratio, quantity earned,
forecast-to-plan ratio, and total closed contracts.
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Performance measurement system

• A performance measurement system is one
component of a performance management
system.
• The most popular performance measurement
systems in use are some variant of Kaplan and
Norton’s balanced scorecard (BSC).
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Balanced scorecard (BSC)

• It is a performance measurement system whose
key feature is that it does not rely solely on
financial measures of success.
• Over the past few years, BSC has become a
generic term that is used to represent virtually
every type of scorecard application and
implementation, but it is intended to emphasize
a strategic focus.
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Perspectives of BSC
• Financial: How we look at our place in the market?
• Customer: focus on customer stratification and
answer the question:”how our customer sees us?”
• Internal business processes: how well our business
is running and whether we provides what our
customers actual wants. Answer the question:
“what should we be best at?”.
• Learning and growth: looks at people , skills ,
training , leadership and knowledge. Answer the
question: “How can we improve and create a
value?”.
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BSC
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Dashboards vs Scorecards
• These terms are often used interchangeably, and
they share many common features.
• The main difference is that scorecards are used by
executives, managers, and staff to monitor strategic
alignment and success with strategic objectives and
targets.
• By contrast, dashboards are used at the operational
and tactical levels. Managers, supervisors, and
operators use operational dashboards to monitor
detailed operational performance on a weekly, daily,
or even hourly basis.
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Six Sigma
• Most companies use Six Sigma as a process
improvement methodology that enables them
to examine their processes, locate problems,
and apply remedies.
• It aims to reduce the number of defects in a
business process to as close to zero DPMO
(defects per million opportunities) as possible.
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DMAIC
• Determine what issues are facing
• Opportunities for improvements
Define
• Customer requirements

• How the process is performing currently

Measure • Identify some metric indicators

Analyze • What cause the defects or problems

• We make changes to the manufacturing process

Improve and make sure that the defects were addressed

• Make regular adjustments

Control
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Comparison of BSC and Six Sigma

Slide 3-34