Chap 4 - Databases and Bus Intelligence

Slide 4.
Chapter 4
Databases and
business intelligence
Bocij, Greasley and Hickie, Business Information Systems PowerPoints on the Web, 5th edition © Pearson Education Limited 2015
Slide 4.2
Learning objectives
• After this lecture, you will be able to:

– understand the use of database application
software;
– describe the need for business intelligence
systems;
– understand the concept of a data warehouse
and describe alternative architectures for a data
warehouse;
– explain the process of data mining;
– describe business analytics techniques such as
OLAP, cube analysis and visualisation tools.
Slide 4.3
Management issues
• From a managerial perspective, this chapter

addresses the following areas:
– The role of databases for storage and sharing of
information in the organisation.
– The use of a data warehouse which is a special
database or data repository that has been prepared
to support decision making.
– The use of data mining which is used to find patterns
in data that can be used to predict future behaviour.
– The use of business analytics tools to produce on-
demand reports and graphical output for decision
making.
Slide 4.4
Databases
• Database: A collection of related information stored
in an organised way so that specific items can be
selected and retrieved quickly.
Slide 4.5
Database – advantages
• Multi-user access – allowing different people in the business access

to the same data simultaneously such as a manager and another
member of staff accessing a single customer’s data.
• Distributed access – users in different departments of the business
can readily access data.
• Speed – for accessing large volumes of information, such as the
customers of a bank, only databases are designed to produce reports
or access the information rapidly about a single customer.
• Data quality – sophisticated validation checks can be performed
when data are entered to ensure their integrity.
• Security – access to different types of data can readily be limited to
different members of staff. In a car dealership database, for example,
the manager of a single branch could be restricted to sales data for
their branch.
• Space efficiency – by splitting up a database into different tables
when it is designed, less space is needed, as will be seen in the
section on normalisation (Chapter 11).
Slide 4.6
Database types
• Flat file database: A self-contained database that only

contains one type of record – or table – and cannot access
data held in other database files.
• Free-form database: Allows users to store information in the
form of unstructured notes or passages of text. Information is
organised and retrieved by using categories or key words.
• Hypertext database: Information is stored as series of objects
that can consist of text, graphics, numerical data and
multimedia data. Objects are linked, allowing users to store
disparate information in an organised manner.
• Relational database management system (RDBMS): An
extension of a DBMS that allows data to be combined from a
variety of sources.
Slide 4.7
Key database concepts

• Field: The data in an electronic database are organised by fields and
records. A field is a single item of information, such as a name or a
quantity.
• Record: In an electronic database, a record is a collection of related
fields. See Field.
• Table: In an electronic database, data are organised within structures
known as tables. A table is a collection of many records.
• Relationship: In a relational database, data can be combined from
several different sources by defining relationships between tables.
• Compound key: In a relational database, it is possible to retrieve data
from several tables at once by using record keys in combination, often
known as a compound key.
• A primary key: it is a special relational database table column (or
combination of columns) designated to uniquely identify all table
records. A primary key's main features are: It must contain a unique
value for each row of data. It cannot contain null values.
• Foreign (secondary) key fields: These fields are used to link tables
together by referring to the primary key in another database table.
Slide 4.8
An example of how key fields are used to link information from different
Figure 4.1
database tables
Source: Screenshot frame reprinted by permission from Microsoft Corporation
Slide 4.9
Database features
• A query: it is a request for data or information
from a database table or combination of tables.
• Update query: An update query can be used to
change records, tables and reports held in a database
management system.
• Structured query language (SQL): A form of
programming language that provides a standardised
method for retrieving information from databases.
• Filter: In a spreadsheet or database, a filter can be
used to remove data from the screen temporarily. This
allows users to work with a specific group of records.
Filters do not alter or delete data but simply hide any
unwanted items.
Slide 4.10
Other database types

• Object-oriented database: The database is
made up of objects combining data structures
with functions needed to manipulate the object or
the data it holds.
Slide 4.11
Business intelligence
• Business intelligence (BI): is an umbrella term that includes the
applications, infrastructure and tools, and best practices that enable
access to and analysis of information to improve and optimize
decisions and performance.
• Business intelligence systems are needed due to the vast amounts
of data now held in organisational information systems and the
need to extract useful information from this in the form of patterns,
trends and present this in a understandable way to decision
makers.
• Figure 4.2 shows the main elements of a business intelligence
system. Data is gathered from various sources and then held in a
special database repository termed a data warehouse in order to
support decision-making in the organisation. Repositories of data
focused on departmental or subject areas are termed data marts.
Slide 4.12
Business intelligence system
• Data warehouses are large database systems containing

current and historical data that can be analysed to
produce information to support organisational decision
making.
• Data marts are a smaller, departmental version of a data
warehouse which may be easier to manage than a
company-scale data warehouse. Data marts do not aim to
hold information across an entire company, but rather
focus on one department.
• Figure 4.3 indicates the major steps in the data
warehousing process.
Slide 4.13
Business analytics
• Business analytics (BA) is a term that is used to

describe various approaches to data driven analysis
including reporting tools such as OLAP and visualisation
tools such as dashboards.
• Online analytical processing (OLAP) refers to the ability
to analyse in real time the type of large data sets stored in
data warehouses. ‘Online’ indicates that users can
formulate their own queries, compared to standard paper
reports.
Slide 4.14
Business intelligence system

overview
Figure 4.2 Business intelligence system overview
Slide 4.15
Data warehouses
Figure 4.3 The data warehousing process
Slide 4.16
Data warehouse architecture
• The configuration of the system that undertakes the data

warehousing process can actually take a number of forms
depending on the current information systems
infrastructure and the organisational requirements of the
data warehouse.
• The objectives and capabilities of management can also
lead to compromise when considering the implementation
of enterprise-wide systems. Ekerson (2003) provides four
options to build a data warehouse (see Figure 4.4).
Slide 4.17
Data warehouse architecture (Continued)
Slide 4.18
Data mining
• Data mining in its broadest sense is a process that uses

statistical, mathematical, artificial intelligence and other
techniques to extract useful information from large
databases. Under this wide definition most types of data
analysis can be classified as data mining.
• In its original definition data mining is used to identify

patterns or trends in the data in data warehouses which
can be used for improved profitability.
Slide 4.19
Data mining (Continued)

Particular data mining techniques include:
Identifying associations
o This involves establishing relationships about items that occur
at a particular point in time.
Identifying sequences
o This involves showing the sequence in which actions occur,
e.g. path or click-stream analysis of a web site.
Classification
o This involves analysing historical data into patterns to predict
future behaviour.
Clustering
o This involves finding groups of facts that were previously
unknown.
Modelling
o This involves using forecasting and regression analysis to
predict sales.
Slide 4.20
Text mining and web mining

Text mining
• Text mining is the application of data mining to text files.
• Text held in documents will normally be unstructured in
terms of its content and text mining aims to find previously
hidden patterns in text within and between documents.
Web mining
• Because of the size and popularity of the web many data
mining applications are being developed to analyse
information from the web and these are classified under
the term web mining.
• Extraction of information from web pages specifically is
termed web content mining and involves reading and
analysing data from web pages.
Slide 4.21
Cube analysis
• Data in a multidimensional database are broken down for
analysis into a number of chosen dimensions. For
example, for sales data the common dimensions are time
period, product types and geographic location.
• Dimensions can be then broken down into categories. For
example, for time these could be months, quarters or
years.
• Usually a multidimensional database is formed from data
held in a data warehouse specifically for multidimensional
analysis.
• The form of the data used in the multidimensional
database is termed a data cube.
Slide 4.22
Visualisation tools
• In order to facilitate better and easier understanding of
data, software that provides a visual representation of
data is available.
• Applications such as spreadsheets, dashboards,
scorecards and geographical information systems can be
utilised as visualisation tools.
Spreadsheets
• The ability of spreadsheets to create a variety of different
charts which are updated automatically in response to
changes in data. In conjunction with their statistical and
forecasting capabilities spreadsheets are particularly
useful are providing graphical displays of trends such as
sales for analysis by organisations.
Slide 4.23
Dashboards
• To meet the needs of managers who do not use computers
frequently a graphical interface, called a dashboard (or
digital dashboard) permits decision makers to make sense
out of the avalanche of statistics collated by any enterprise-
wide software application.
• A dashboard display is a graphical display on the computer

presented to the decision maker which includes graphical
images such as meters, bar graphs, trace plots, text fields to
convey real-time information. An example of a dashboard
display is shown in Figure 4.7.
Slide 4.24
Dashboards (Continued)
Figure 4.7 Example of a dashboard

Source: http://www.dashboardinsight.com/articles/digital-dashboards/fundamentals/a-closer-look-at-scorecards-and-dashboards.aspx
Slide 4.25
Scorecards
• Whilst dashboards are generally considered to measure

operational performance, scorecards provide a summary
of performance over a period of time.
• Scorecards are also usually associated with the concept

of the balanced scorecard strategy tool (Chapter 13) and
examine data from the balanced scorecard perspectives
of financial, customer, business process and learning
and growth. An example of a scorecard display is shown
in Figure 4.8.
Slide 4.26
Scorecards (Continued)
Figure 4.8 Example of a scorecard

Source: http://www.dashboardinsight.com/articles/digital-dashboards/fundamentals/a-closer-look-at-scorecards-and-dashboards.aspx
Slide 4.27
Business Activity Monitoring (BAM)

• Business Activity Monitoring software is designed to
monitor, capture and analyse business performance data in
real time and present them visually in order that rapid and
effective decisions can be taken.
• It offers an alternative approach to real time Business
Intelligence provided through real time data warehousing
(RDW) (see previous section in this chapter). BAM software
bypasses the data warehouse and uses intelligent agents to
monitor for key events.
• These events are then processed according to the three
levels of implementation of Alert and Dashboard, Automatic
Response and Predictive and Adaptive.
Slide 4.28
Business Activity Monitoring (BAM)

(Continued)
• Alert and Dashboard. These systems capture data from
various applications and internal and external data sources,
which are then filtered and analysed to provide an alert of
unusual performance.
• Automatic Response. In a standard Alert and Dashboard
system any decisions made on the basis of the information
supplied by the BAM are made using traditional telephone, e-
mail or alternative communication systems.
• Predictive and Adaptive. This implementation of BAM, not
only provides alerts in response to exception events, but also
suggests alternative actions which could be taken and allows
the exploration of future scenarios based on alternative
responses.
Slide 4.29
Geographical Information Systems

(GIS)
• A Geographical Information System (GIS) uses
maps to display information about different areas.
• They are commonly used for performance analysis
by marketing staff.
• Performance of distribution channels such as
branches can be shown by colour-coding them.
• Colour-coded areas on the map can be used to show
variation in the demand of customers for products or
the characteristics of people living in different areas,
such as average disposable income.

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Slide 4.

• After this lecture, you will be able to:

• From a managerial perspective, this chapter

• Multi-user access – allowing different people in the business access

• Flat file database: A self-contained database that only

Key database concepts

Other database types

Business intelligence system

• Data warehouses are large database systems containing

• Business analytics (BA) is a term that is used to

Business intelligence system

Figure 4.2 Business intelligence system overview

Figure 4.3 The data warehousing process

Data warehouse architecture

• The configuration of the system that undertakes the data

Data warehouse architecture (Continued)

• Data mining in its broadest sense is a process that uses

• In its original definition data mining is used to identify

Data mining (Continued)

Text mining and web mining

• A dashboard display is a graphical display on the computer

Figure 4.7 Example of a dashboard

• Whilst dashboards are generally considered to measure

• Scorecards are also usually associated with the concept

Figure 4.8 Example of a scorecard

Business Activity Monitoring (BAM)

Business Activity Monitoring (BAM)

Geographical Information Systems

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