Chapter 11 The Data Asset Databases Business Intelligence Competitive Advantage 11 1 Introduction to manager s Big data a general term used to describe massive amounts of data available Business intelligence BI a term combining aspects of reporting data exploration and ad hoq queries and sophisticated data modeling and analysis Analytics a term describing the extensive use of data statistical and quantitative analysis explanatory and predictive models and fact based management to drive decisions and actions Key Takeaways months o The amount of data on corporate hard drives doubles every six o In many organizations available data is not exploited to advantage o Data is oftentimes considered a defensible source of competitive advantage however advantages based on capabilities and data that others can acquire will be short lived 11 2 Data Information and Knowledge Data raw facts and figures Information data presented in a context so that it can answer a question or support decision making Knowledge insight derived from experience and expertise Database a single list of data or a collection of lists of data databases might be focused on any combination of functional areas such as sales inventory payroll Database management systems DBMS aka database software software for creating maintaining and manipulating Structured query language SQL a language used to create and manipulate databases Database administrator DBA job title focused on directing performing or overseeing activities associated with a database Table file refers to a list of data Column field defines the data that a table can hold a column in a database table columns represent each category of data Row record represents a single instance of whatever the table keeps track of a row in the database table Key is the field used to related tables in a database a key to unlock code Relational databases multiple tables are related based on common keys Key Takeaways o Data includes raw facts that must be turned into information in order to be useful and valuable o Databases are created maintained and manipulated using programs called database management systems DBMS sometimes referred to as database software o All data fields in the same database have unique names several data fields make up a data record multiple data records make up a table or data file and one or more tables or data files make up a database o Relational databases are the most common database format 11 3 Where Does Data Come From Transaction processing systems TPS systems that record a transaction such as a cash register sale ATM withdrawal or product return Transaction some kind of business exchange Loyalty card systems that provide awards and usage incentives typically in exchange for a method that provides a more detailed tracking and recording of customer activity Enterprise Software o Customer relationship management CRM systems used to empower employees to track and record data at nearly every point of customer contact complain e mail return to a store o Supply chain management SCM o Enterprise resource planning ERP Can technology improve health care o Artificial intelligence computer software that seeks to reproduce human thought decision making or brain functions Data aggregators firms that collect and resell data Key Takeaways o For organizations that sell directly to their customers transaction processing systems TPS represent a source of potentially useful data o Grocers and retailers can link you to cash transactions if they can convince you to use a loyalty card which in turn requires you to give up information about yourself in exchange for some kind of financial incentive such as points or discounts o Enterprise software CRM SCM and ERP is a source for customer supply chain and enterprise data o Survey data can be used to supplement a firm s operational data o Data obtained from outside sources when combined with a firm s internal data assets can give the firm a competitive edge o Data aggregators are part of a multibillion dollar industry that provides genuinely helpful data to a wide variety of organizations o Data that can be purchased from aggregators may not in and of itself yield sustainable competitive advantage since others may have access to this data too However when combined with a firm s proprietary data or integrated with a firm s proprietary procedures or other assets third party data can be a key tool for enhancing organizational performance o Data aggregators can also be quite controversial Among other things they represent a big target for identity thieves are a method for spreading potentially incorrect data and raise privacy concerns o Firms that mismanage their customer data assets risk lawsuits brand damage lower sales fleeing customers and can prompt more restrictive legislation o Further raising privacy issues and identity theft concerns recent studies have shown that in many cases it is possible to pinpoint users through allegedly anonymous data and to guess Social Security numbers from public data o New methods for tracking and gathering user information are raising privacy issues which possibly will be addressed through legislation that restricts data use 11 4 Data Rich Information Poor Legacy systems older information systems that are often incompatible with other systems technologies and ways of conducting business major roadblock from turning data into information Key Takeaways o A major factor limiting business intelligence initiatives is getting data into a form where it can be used i e analyzed and turned into information o Legacy systems often limit data utilization because they were not designed to share data aren t compatible with newer technologies and aren t aligned with the firm s current business needs o Most transactional databases aren t set up to be simultaneously accessed for reporting and analysis In order to run analytics the data must first be ported to a data warehouse or data mart 11 5 Data Warehouses and Data Marts Datawarehouses a set of databases designed to support decision making in an organization structured for fast online queries and exploration Data marts a database focused on addressing the concerns of a specific problem or business unit marketing engineering Data relevance data sourcing data quantity data quality data hosting data governance Hadoop was created to analyze massive amounts of raw information better than traditional highly structured databases primary advantages include
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