GRUNDLAGEN DES

INFORMATIONSMANAGEMENTS
Vorlesung 11: Data and Competitive Advantage: Databases, Analytics, AI and
Machine Learning

Grundlagen des Informationsmanagements | Prof. Dr. Dennis Kundisch | Wintersemester 2019/20

 DATA AND DECISION MAKING

 Big data: Massive amount of data available to today’s managers

 Unstructured, big, and costly to work through conventional databases
 Made available by new tools for analysis and insight
 Decision making is data-driven, fact-based and enabled by:
 Standardized corporate data
 Access to third-party datasets through cheap, fast computing and easier-to-use
software

Grundlagen des Informationsmanagements | Prof. Dr. Dennis Kundisch | Wintersemester 2019/20

CHARACTERISTICS OF BIG DATA

Variety
Volume
Different
Scale of forms of
data data
Big
Data
Velocity Veracity
Analysis of
Uncertainty
streaming
of data
data

3Referring to: https://www.ibmbigdatahub.com/infographic/four-vs-big-data (18.12.2019)

Grundlagen des Informationsmanagements | Prof. Dr. Dennis Kundisch | Wintersemester 2019/20

 DATA AND DECISION MAKING

 Business intelligence (BI): Combines aspects of reporting, data exploration

and ad hoc queries, and sophisticated data modeling and analysis
 Analytics: Driving decisions and actions through extensive use of:
 Data
 Statistical and quantitative analysis
 Explanatory and predictive models
 Fact-based management
 Machine Learning: Leverages massive amounts of data so that computers
can act and improve on their own without additional programming.

Grundlagen des Informationsmanagements | Prof. Dr. Dennis Kundisch | Wintersemester 2019/20

ORGANIZING DATA - KEY TERMS AND TECHNOLOGY

 Database: Single table or a collection of related tables

 Database management systems (DBMS): Software for creating, maintaining,
and manipulating data
 Known as database software
 Structured query language (SQL): Used to create and manipulate databases

Grundlagen des Informationsmanagements | Prof. Dr. Dennis Kundisch | Wintersemester 2019/20

 ORGANIZING DATA - KEY TERMS AND TECHNOLOGY

 Database administrator (DBA): Job title focused on directing, performing, or

overseeing activities associated with a database or set of databases
 Database design and creation
 Implementation
 Maintenance
 Backup and recovery
 Policy setting and enforcement
 Security

Grundlagen des Informationsmanagements | Prof. Dr. Dennis Kundisch | Wintersemester 2019/20

KEY TERMS ASSOCIATED WITH DATABASE SYSTEMS

Table or file

• List of data, arranged in columns or fields and rows

or records

Column or field

• Column in a database table

• Represents each category of data contained in a
record

Row or record
• Row in a database table
• Represents a single instance of whatever the table
keeps track of like student or faculty
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Grundlagen des Informationsmanagements | Prof. Dr. Dennis Kundisch | Wintersemester 2019/20

KEY TERMS ASSOCIATED WITH DATABASE SYSTEMS

Key

• Field or combination of fields used to uniquely identify

a record, and to relate separate tables in a database
like social security number

Relational database

• Most common standard for expressing databases

• Tables or files are related based on common keys

Grundlagen des Informationsmanagements | Prof. Dr. Dennis Kundisch | Wintersemester 2019/20

 TRANSACTION PROCESSING SYSTEMS

 Record a transaction or some form of business-related exchange, such as a

cash register sale, ATM withdrawal, or product return
 Transaction: Some kind of business exchange
 Loyalty card: System that provides rewards in exchange for consumers
allowing tracking and recording of their activities
 Enhances data collection and represents a significant switching cost

Grundlagen des Informationsmanagements | Prof. Dr. Dennis Kundisch | Wintersemester 2019/20

 ENTERPRISE SOFTWARE

 Firms set up systems to gather additional data beyond conventional purchase

transactions or Web site monitoring
 Customer relationship management systems (CRM) - Empower employees to
track and record data at nearly every point of customer contact
 Includes other aspects that touch every aspect of the value chain including
SCM and ERP

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Grundlagen des Informationsmanagements | Prof. Dr. Dennis Kundisch | Wintersemester 2019/20

 SURVEYS

 Firms supplement operational data with additional input from surveys and
focus groups
 Direct surveys can give better information than a cash register
 Many CRM products have survey capabilities that allow for additional data
gathering at all points of customer contact

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Grundlagen des Informationsmanagements | Prof. Dr. Dennis Kundisch | Wintersemester 2019/20

 EXTERNAL SOURCES

 Organizations can have their products sold by partners and can rely heavily on
data collected by others
 Data from external sources might not yield competitive advantage on its own
 Can provide operational insight for increased efficiency and cost savings
 May give firms a high-impact edge

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Grundlagen des Informationsmanagements | Prof. Dr. Dennis Kundisch | Wintersemester 2019/20

 DATA AGGREGATORS

 Firms that collect and resell data

 One has to be aware of the digital tracking of individuals
 Possible by the availability of personal information online

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Grundlagen des Informationsmanagements | Prof. Dr. Dennis Kundisch | Wintersemester 2019/20

 REASONS FOR POOR INFORMATION

 Incompatible systems
 Legacy systems: Older information systems that are incompatible with other
systems, technologies, and ways of conducting business
 Operational data cannot always be queried
 Most transactional databases are not set up to be simultaneously accessed for
reporting and analysis
 Database analysis requires significant processing

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Grundlagen des Informationsmanagements | Prof. Dr. Dennis Kundisch | Wintersemester 2019/20

FIGURE 2.2 – THE VALUE CHAIN

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Grundlagen des Informationsmanagements | Prof. Dr. Dennis Kundisch | Wintersemester 2019/20

 DATA WAREHOUSES AND DATA MARTS

 Set of databases designed to support decision making in an organization

 Structured for fast online queries and exploration
 Collects data from many different operational systems
 Data warehouse: a set of databases to support decision making in an
organization
 Data mart: Database or databases focused on addressing the concerns of a
specific problem or business unit

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Grundlagen des Informationsmanagements | Prof. Dr. Dennis Kundisch | Wintersemester 2019/20

 DATA WAREHOUSES AND DATA MARTS

 Marts and warehouses may contain huge volumes of data

 Building large data warehouses can be expensive and time consuming
 Large-scale data analytics projects should build on visions with business-
focused objectives

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Grundlagen des Informationsmanagements | Prof. Dr. Dennis Kundisch | Wintersemester 2019/20

FIGURE 15.3 – INFORMATION SYSTEMS
SUPPORTING OPERATIONS AND ANALYSIS

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Grundlagen des Informationsmanagements | Prof. Dr. Dennis Kundisch | Wintersemester 2019/20

 MAINTAINING DATA WAREHOUSES AND DATA MARTS

 Firms can address the broader issues needed to design, develop, deploy, and
maintain its system through data:
 Relevance
 Sourcing
 Quantity and quality
 Hosting
 Governance

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Grundlagen des Informationsmanagements | Prof. Dr. Dennis Kundisch | Wintersemester 2019/20

 INSIGHTS FROM UNSTRUCTURED BIG DATA

 Hadoop - Made up of half-dozen separate software pieces and requires the

integration of these pieces to work
 Advantages
 Flexibility
 Scalability
 Cost effectiveness
 Fault tolerance

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Grundlagen des Informationsmanagements | Prof. Dr. Dennis Kundisch | Wintersemester 2019/20

BUSINESS INTELLIGENCE TOOLKIT

Canned reports
• Provide regular summaries of information in a predetermined
format

Ad hoc reporting tools

• Puts users in control so that they can create custom reports on an
as-needed basis
• By selecting fields, ranges, summary conditions, and other parameters

Dashboards
• Heads-up display of critical indicators that allow managers to get a
graphical glance at key performance metrics

Online analytical processing (OLAP)

• Takes data from standard relational databases, calculates and
summarizes the data, and then stores the data in a special
database called a data cube
• Data cube: Stores data in OLAP report

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Grundlagen des Informationsmanagements | Prof. Dr. Dennis Kundisch | Wintersemester 2019/20

 DATA MINING

 Using computers to identify hidden patterns in, and to build models from, large
data sets
 Customer segmentation and market basket analysis
 Marketing and promotion targeting
 Collaborative filtering and customer churn
 Fraud detection, financial modeling, and hiring and promotion
 Prerequisites
 Organization must have clean, consistent data
 Events in that data should reflect trends

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Grundlagen des Informationsmanagements | Prof. Dr. Dennis Kundisch | Wintersemester 2019/20

 MOST VALUABLE CUSTOMERS

 Customer lifetime value (CLV): Present value of the likely future income
stream generated by an individual purchaser
 Tracks over ninety demographic segments
 Each responds differently to different approaches
 Iterative model of mining the data to identify patterns
 Creates and tests a hypothesis against a control group
 Analyzes to statistically verify the outcome
 Profits come from locals and people 45 years and older

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Grundlagen des Informationsmanagements | Prof. Dr. Dennis Kundisch | Wintersemester 2019/20

PROBLEMS IN DATA MINING

Using bad data can give wrong estimates

• Firm is overexposed to risk

Historical consistency

• When the market does not behave as it has in the past,

computer-driven investment models are not effective

Over-engineer

• Build a model with so many variables that the solution

arrived at might only work on the subset of data used to
create it

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Grundlagen des Informationsmanagements | Prof. Dr. Dennis Kundisch | Wintersemester 2019/20

SKILLS FOR DATA MINING

Information
Statistics
technology

Business
knowledge
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Grundlagen des Informationsmanagements | Prof. Dr. Dennis Kundisch | Wintersemester 2019/20

 ARTIFICIAL INTELLIGENCE (AI)

 Computer software that seeks to reproduce or mimic human thought, decision

making, or brain functions
 Data mining has its roots in AI
 Neural network: Examines data and hunts down and exposes patterns, in
order to build models to exploit findings
 Expert systems: Leverages rules or examples to perform a task in a way that
mimics applied human expertise

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Grundlagen des Informationsmanagements | Prof. Dr. Dennis Kundisch | Wintersemester 2019/20