Chapter 6: Foundations of Business Intelligence: Databases and Information Management

6-1 What are the problems of managing data resources in a traditional file environment?

Adequate information provides users with accurate, timely, and relevant information. It is
hard for organizations to keep track of all their data by using traditional file management;
that's why they need to organize the data so it can be easily accessed. A computer system
collects data in a hierarchy that starts with bits and bytes and progresses to fields, records,
files, and databases.
Several problems occur with traditional file environment, such as:
1. Data Redundancy and Inconsistency: duplicating data in multiple files, so the same
data are stored in more than one place. This could lead to data inconsistency.
2. Program-Data Dependence: coupling of data stores in files and specific programs
required to update and maintain files.
3. Lack of flexibility: A traditional file system can deliver routine scheduled reports, but
it cannot provide ad hoc reports or respond to unanticipated information requirements
quickly.
4. Poor Security: little control of data may cause access to, and dissemination of
information may be out of control.
5. Lack of Data Sharing and Availability: Files from different parts of the organization
cannot be related to one another, so information can't be shared efficiently.

6-2 What are the major capabilities of database management systems (DBMS), and why
is a relational DBMS so powerful?

DBMS includes a data definition capability, a data dictionary capability, and a data
manipulation language. Data definition capability identifies the structure and content of the
given database. A data dictionary can be either an automated or manual file to store information
about the data in the database, such as names, definitions, formats, and descriptions of data
elements. The data manipulation language, such as SQL, is a specialized language for accessing
and manipulating the data in the database.

A relational database has been the primary method for organizing and maintaining data in
information systems since it is so flexible and accessible. Its job is to collect data in two-
dimensional tables called relations with rows and columns. Every table contains data about an
entity and its attributes, each row signifies a record, and each column represents an attribute or
field. It also includes a required field to identify each record for retrieval or manipulation
uniquely. Relational database tables can be merged easily to provide data required by users,
provided that any two tables share a common data element. Non-relational databases are
becoming famous for managing data types that are hard to be handled by the relational data
model. Both relational and non-relational database products are available as cloud computing
services. A distributed database is stored in multiple physical locations, including remote cloud
computing centers.

An organization's data model must reflect its crucial business process and decision-making.
Normalization is the process of creating small, stable, flexible, and adaptive data structures.
An excellent relational database will not have many relationships, and attributes for that entity
will only apply. An entity-relationship diagram graphically illustrates the relationship between
entities like supplier, part, line_item, and order.

6-3 What are the principal tools and technologies for accessing information from
databases to improve business performance and decision making?

Current data management technology has a range of tools for obtaining useful information from
all the different types of data used by businesses today, such as semi-structured and
unstructured big data in massive quantities. These capabilities include data warehouses and
marts, Hadoop, in-memory computing, and analytical platforms.

OLAP supports multidimensional data analysis, enabling users to view the same data in
different ways using multiple dimensions. Each aspect provided will represent different
dimensions. Data mining analyzes a large amount of data, like data warehouses' contents, to
find patterns and rules that can be used to predict future behavior and guide decision-making.
Text mining tools help businesses analyze large unstructured data sets consisting of text. Web
mining tools focus on analyzing user patterns and information from the web, examining the
structure of websites and activities of website users, as well as the contents of web pages.
Conventional databases can be linked via middleware to the web or a web interface to facilitate
user access to an organization's internal data.

6-4 Why are information policy, data administration, and data quality assurance essential
for managing the firm’s data resources?

Every business needs information technology. A firm's data is an important source, which is
why it needs to be protected. Information policy will specify rules for sharing, disseminating,
acquiring, standardizing, classifying, and inventorying information. It provides specific
procedures and accountabilities. Data administration is responsible for particular policies and
procedures by which data can be managed. Data governance deals with managing the
availability, usability, integrity, and Security of the data employed in an enterprise with
particular emphasis on promoting privacy, Security, data quality, and compliance with
government
regulations.

Inaccurate or inconsistent data may propose major operational and financial problems for
businesses because they may create inaccuracies in product pricing, customer accounts, and
inventory data and lead to wrong decisions about the firm's actions. Firms must take certain
steps to ensure they have high data quality. These include enterprise-wide data standards,
databases designed to minimize inconsistent and redundant data, data quality audits, and data
cleansing software.