Chapter 6 – Database management and

Business Intelligence

Laurel Qi

1
Content agenda
 Database management systems (DBMS)
 Using database to improve business

performance and decision making

 Business Intelligence

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Database management systems (DBMS)
 Computer system organizes data in a
hierarchy (components of database)
◦ Database: Group of related files
◦ File: Group of records of same type
◦ Record: Group of related fields
◦ Field: Group of characters as word(s) or number

◦ Usually a file describes an entity, e.g., person, place, thing on

which we store information. And attributes were used to
describe entity, e.g., Student_ID, Course, Date and Grade
belong to entity COURSE

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Database management systems (DBMS)

Entity

Attributes

A computer system organizes data

in a hierarchy that starts with the
bit, which represents either a 0 or a
1. Bits can be grouped to form a
byte to represent one character,
number, or symbol. Bytes can be
grouped to form a field, and related
fields can be grouped to form a
record. Related records can be
collected to form a file, and related
files can be organized into a
database.

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Database management systems (DBMS)
 Database
◦ a collection of data organized to serve many applications
efficiently by centralizing data and controlling redundant data
 Database management system (DBMS)
◦ software that permits an organization to centralize data,
manage them efficiently, and provide access to the stored data
by application programs

 Capabilities of DBMS:
◦ Query - Data manipulation language: Used to add, change, delete, retrieve data from
database
 Structured Query Language (SQL)
e.g.,… “select”… “from”… “where”
 Microsoft Access user can use tools to generate SQL
◦ Report - Many DBMS have report generation capabilities for creating polished reports

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Database management systems (DBMS)

Database Interface Application

e.g. HRMS
programs

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Database management systems (DBMS)
 Relational DBMS
◦ Represent data as two-dimensional tables called relations or files
◦ Each table contains data on entity and attributes

◦ Traditional DBMS: IBM DB2; Oracle, Microsoft Access and SQL

server; My SQL (open-source)

◦ Cloud-based relational database service providers:

 Amazon Relational Database service (Amazon RDS)
 Oracle’s own database cloud service
 Microsoft SQL Azure

Suitable
◦ users: Web-focused start-ups; SME seeking for database
capabilities at a lower price.

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Database management systems (DBMS)
Table: grid of columns and rows
• Rows: Records
• Columns: Fields/attributes for entity
• Primary key: Field used to uniquely identify each record. Primary key cannot be duplicated.
• Foreign key: Primary key used in second table as look-up field to identify records from
original table. Foreign key defines the relationship between tables.

The foreign key in the second

table must be the primary key in
the first table.

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Database management systems (DBMS)
An example of relational database

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After understanding the DBMS, how should organization use
database to improve business performance and decision making?

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Using Databases to Improve Business
Performance and Decision Making
 Database is used to……
◦ Keep track of basic transactions, e.g., paying suppliers,
processing orders, keep track of customers and pay
employees.
 Database is also used to…
◦ Help managers and employees to make better decisions.
(Pricing strategy of Starbucks)
 Big data era
◦ 6M searches per second
◦ 1M transactions per hour
◦ 4B page views per day
◦ 250B photos stored

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Using Databases to Improve Business
Performance and Decision Making
 Big data era
◦ History: years ago, most of the transaction data could be stored in the
DBMS. But now…massive sets of unstructured/semi-structured data from
Web traffic, social media, sensors, E-trading systems.
• Amount: Data are more than doubling every two years, in petabytes,
exabytes. Beyond the capability of typical DBMS to capture, store, and
analyze.
• Usage: reveal more patterns and interesting anomalies than smaller data
sets, with the potential to provide new insights into customer behavior,
weather patterns, financial market activity, or other phenomena.
• Examples?
◦ Car-rental giant Hertz gathers data from web surveys, emails, text messages, web site traffic
patterns and different store branches that there would be a late return of the cars during
specific times of the day. The company arranges more managerial staff during those peak
times, and thus enhances Hertz’s performance and increased customer satisfaction.
◦ Restaurant collects credit card information and company’s social media websites -> quality is
more important than price->introducing vegetarian dishes, more seafood selections, and
more expensive wines, raising sales by more than 10%.

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Using Databases to Improve Business
Performance and Decision Making

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Using Databases to Improve Business
Performance and Decision Making
 The four “Vs” of big data
IBM data scientists break big data into four dimensions: volume, variety, velocity
and veracity.

Refer to: http://www.ibmbigdatahub.com/infographic/four-vs-big-data

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Using Databases to Improve Business
Performance and Decision Making
 Companies need technologies or tools to
manage and analyze the big data…
 Contemporary tools:
◦ Data warehouses
Before the Big data era
◦ Data marts
◦ Hadoop
◦ In-memory computing Big data era

◦ Analytical platforms

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Using Databases to Improve Business
Performance and Decision Making
 Data warehouse:
◦ Stores current and historical data from many core operational
transaction systems
◦ Consolidates( 整合 ) and standardizes( 标准化 ) information for
use across enterprise, but data cannot be altered( 更改，变动 )
◦ Data warehouse system will provide ad hoc query, analysis, and
reporting tools
 Data marts:
◦ Subset of data warehouse
◦ Summarized or highly focused portion of firm’s data for use by
specific population of users
◦ Typically focuses on single subject or line of business

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Using Databases to Improve Business
Performance and Decision Making

OLTP: On-Line Transaction Processing is the process in which systems

facilitate and manage data entry and retrieval on a frequent basis. (ATM)
ETL: extraction, transformation, and loading, in which the data is cleaned and
organized into a meaningful manner.

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Using Databases to Improve Business
Performance and Decision Making
In big data era… Used by Facebook and Yahoo
 Hadoop ( 分布式计算 )
◦ An open source software framework that enables distributed parallel
processing of huge amounts of data across inexpensive computers.
 Functionality:
◦ It breaks a big data problem down into sub-problems, distributes them
among up to thousands of inexpensive computer processing nodes, and
then combines the result into a smaller data set that is easier to analyze.

 Input of Hadoop:
◦ Structured transactional data (in DBMS)
◦ Semi-structured data
◦ Unstructured data (>90% of org. data).
https://www.webopedia.com/TERM/U/unstructured_data.html

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Using Databases to Improve Business
Performance and Decision Making
In big data era…
 In-memory computing
◦ A method to rely on
main memory (RAM) for
data storage.

◦ Eliminate bottlenecks from retrieving and reading data in a traditional,

disk-based database and dramatically shortening query response times.
 Can reduce hours/days of processing to seconds
 Can process very large data set, e.g., data mart or small data warehouse.
 Analytic platforms (- a software suite)
◦ Commercial database vendors have also developed specialized high-speed analytic
platforms using both relational and non-relational technology that are optimized for
analyzing large datasets.

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Using Databases to Improve Business
Performance and Decision Making
Traditional
data
processing

Big data
processing

A contemporary business intelligence infrastructure features capabilities and tools to

manage and analyze large quantities and different types of data from multiple sources.
Data Lake: repository for raw structured or unstructured data that has not yet been
analyzed.

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Business Intelligence
 Based on Data warehouse…

 Business Intelligence:
◦ Tools for consolidating, analyzing, and providing
access to vast amounts of data to help users make
better business decisions

 Principle tools include:

◦ Software for database query and reporting
◦ Online analytical processing (OLAP)
◦ Data mining

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Business Intelligence

A series of analytical tools works with data stored in databases to find

patterns and insights for helping managers and employees make better
decisions to improve organizational performance.
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Business Intelligence
Query and report (advanced level)

OLTP OLAP
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Business Intelligence
 Online analytical processing (OLAP)
◦ OLAP supports multidimensional data analysis
 Viewing data using multiple dimensions (data cube)
 Q: how many washers sold in the East in 2003 compared with
other regions?

OLAP enables rapid,

online answers to ad
hoc queries

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Business Intelligence
 Data mining:
◦ Finds hidden patterns, relationships in large databases and infers
rules to predict future behavior. More discovery driven than OLAP
 E.g., Find buying patterns in customer data for one-to-one marketing
campaigns (body shop recommendations) or to identify profitable
customers. (credit card holder…)
 Text mining
◦ Extracts key elements from large unstructured data sets
◦ Sentiment( 看法，情绪，观点 ) analysis software
 Web mining
◦ Discovery and analysis of useful patterns and
information from web (Google trends service)

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Business Intelligence
 Business Intelligence analytics
◦ Predictive analytics
 Use statistical analysis, data mining techniques, historical data,
and assumptions about future conditions to predict future
trends and behavior patterns.
◦ Big data analytics
◦ Operational intelligence and analytics
◦ Location analytics and Geographic Information
Systems (GIS) (e.g., Starbucks new shop location)

Your own examples?

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Business Intelligence
 Business Intelligence (BI) envionment
 BI vendors: Oracle, SAP, IBM, Microsoft, SAS.
 Six elements in the business intelligence environment
1. Data from the business environment
2. Business intelligence infrastructure
3. Business analytics toolset
4. Managerial users and methods
5. Delivery platform – MIS, DSS, ESS
6. User interface

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Business Intelligence

BUSINESS INTELLIGENCE AND ANALYTICS FOR DECISION SUPPORT

From customer transaction and
social media streams to create
real-time, personalized
shopping experiences for major
online retailers

The
display
area of
BI.

ESS
ESS

Business intelligence and analytics requires a strong database foundation,

a
set of analytic tools, and an involved management team that can ask
intelligent questions and analyze MM3422@Laurel
data. 28
Closing words
 Key Points Today
 Big data issues.
 Business intelligence and analytics.

 Home reading case:

• Can Big Data Analytics Help People Find Love?
• The Dark Side of Big Data.
• Data Drive Starbucks Location Decisions.

Thank you! Have a good weekend!

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