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Coronel DatabaseSystems 13e Ch13

Chapter 13 discusses the significance of business intelligence (BI) and data warehouses in enhancing decision-making processes within organizations. It outlines the architecture, components, and benefits of BI, differentiates between operational and decision support data, and emphasizes the importance of data analysis and visualization. Additionally, the chapter covers the evolution of BI technologies and the characteristics of effective data warehouses.

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0% found this document useful (0 votes)
5 views46 pages

Coronel DatabaseSystems 13e Ch13

Chapter 13 discusses the significance of business intelligence (BI) and data warehouses in enhancing decision-making processes within organizations. It outlines the architecture, components, and benefits of BI, differentiates between operational and decision support data, and emphasizes the importance of data analysis and visualization. Additionally, the chapter covers the evolution of BI technologies and the characteristics of effective data warehouses.

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Chapter 13

Business Intelligence and Data


Warehouses
Learning Objectives

• After completing this chapter, you will be able to:


• Describe the role of business intelligence in providing comprehensive business
decision support
• Describe the architecture, reporting styles, evolution, and benefits of business
intelligence
• Differentiate between operational data and decision support data
• Identify the purpose, characteristics, and components of a data warehouse
• Develop star and snowflake schemas for decision-making purposes
• Describe the characteristics and capabilities of online analytical processing (OLAP)
• Describe the role and functions of data analytics and data mining
• Explain how SQL analytic functions are used to support data analytics
• Define data visualization and explain how it supports business intelligence

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© 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website fo
r classroom use.
The Need for Data Analysis

• Organizations tend to grow and prosper as they gain a better understanding of


their environment
• Evaluate through tracking daily transactions and analyzing company data
• Organizations are always looking for a competitive advantage
• Product development, market positioning, sales promotions, and customer service
• Companies and software vendors addressed these multilevel decision support
needs by creating autonomous applications for particular groups of users
• This more comprehensive and integrated decision support framework within
organizations became known as business intelligence

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r classroom use.
Business Intelligence (1 of 2)

• Comprehensive, cohesive, integrated set of tools and processes


• Captures, collects, integrates, stores, and analyzes data
• Generates and presents information to support business decision making
• Allows transformation
• Data into information
• Information into knowledge
• Knowledge into wisdom

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r classroom use.
Business Intelligence (2 of 2)

• Concepts, practices, tools and techniques to help business


• Understand core capabilities
• Provide snapshots of the company situation
• Identify key opportunities to create a competitive advantage
• Provides a framework
• Collecting and storing operational data and aggregating it into decision support data
• Analyzing decision support data and presenting generated information to end users to
support business decisions
• Making business decisions which generate more data
• Monitoring results to evaluate outcomes and predicting future outcomes with a high
degree of accuracy

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r classroom use.
Business Intelligence Architecture (1 of 3)

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r classroom use.
Business Intelligence Architecture (2 of 3)

Table 13.2
Basic BI Architectural
Components

Component Description

ETL tools Data extraction, transformation, and loading (ETL ) tools collect, filter, integrate, and aggregate internal and external data to be
saved into a data store optimized for decision support.

Data store The data store is optimized for decision support and is generally represented by a data warehouse or a data mart. The data is stored
in structures that are optimized for data analysis and query speed.

Query and This component performs data selection and retrieval, and it is used by the data analyst to create queries that access the database
reporting and create the required reports.

Data visualization This component presents data to the end user in a variety of meaningful and innovative ways. This tool helps the end user select
the most appropriate presentation format, such as summary reports, maps, pie or bar graphs, mixed graphs, and static or
interactive dashboards.

Data monitoring This component allows real-time monitoring of business activities. The BI system will present concise information in a single
and alerting integrated view. This integrated view could include specific metrics about the system performance or activities, such as number of
orders placed in the last four hours, number of customer complaints by product by month, and total revenue by region. Alerts can
be placed on a given metric; once the value of a metric goes below or above a certain baseline, the system will perform a given
action, such as emailing shop floor managers, presenting visual alerts, or starting an application.

Data analytics This component performs data analysis and data-mining tasks using the data in the data store. This tool advises the user as to
which data analysis tool to select and how to build a reliable business data model. Business models are generated by special
algorithms that identify and enhance the understanding of business situations and problems.

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r classroom use.
Business Intelligence Architecture (3 of 3)

• Practices to manage data


• Master data management (MDM): collection of concepts, techniques, and processes
for identification, definition, and management of data elements
• Governance: method of government for controlling business health and for consistent
decision making
• Key performance indicators (KPI): numeric or scale-based measurements that assess
company’s effectiveness in reaching its goals
- General
- Finance
- Human resources
- Education
• Modern BI reporting styles
- Advanced reporting
- Monitoring and alerting
- Advanced data analytics

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Business Intelligence Benefits

• Improved decision making is the main goal of BI, but BI provides other benefits
• Integrating architecture
• Common user interface for data reporting and analysis
• Common data repository fosters single version of company data
• Improved organizational performance
• Achieving all these benefits takes a lot of human, financial, technological
resources, and time
• BI benefits are not achieved overnight; are the result of a focused company-wide
effort that could take a long time

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r classroom use.
Business Intelligence Evolution (1 of 2)

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r classroom use.
Business Intelligence Evolution (2 of 2)

• Decision support system (DSS) is an arrangement of computerized tools used to


assist managerial decision making
• Typically has a much narrower focus and reach than a BI solution
• BI information technology has evolved from centralized reporting styles to the
current, mobile BI and Big Data analytics style in the span of just a few years
• The rate of technological change is not slowing down; technology advancements are
accelerating the adoption of BI to new levels

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r classroom use.
Business Intelligence Technology Trends

• Several technological advances are driving the growth of business intelligence


technologies
• Data storage improvements
• Business intelligence appliances
• Business intelligence as a service
• Big Data analytics
• Personal analytics

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r classroom use.
Decision Support Data

• Although BI is used at the strategic and tactical managerial levels within


organizations, its effectiveness depends on the quality of data gathered at the
operational level
• Operational data is seldom well suited to decision support tasks

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r classroom use.
Operational Data versus Decision Support Data (1 of 3)

• Operational data and decision support data serve different purposes


• Operational data is useful for capturing daily business transactions
• Decision support data gives tactical and strategic business meaning to the operational
data
• Decision support data differs from operational data in three main areas
• Time span
• Granularity (level of aggregation)
• Dimensionality

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Operational Data versus Decision Support Data (2 of 3)

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Operational Data versus Decision Support Data (3 of 3)
Table 13.5
Contrasting Operational and Decision
Support Data Characteristics
Characteristic Operational Data Decision Support Data

Data currency Current operations Historic data


Real-time data Snapshot of company data
Time component (week/month/year)

Granularity Atomic-detailed data Summarized data


Summarization level Low; some aggregate yields High; many aggregation levels
Data model Highly normalized Non-normalized
Mostly relational DBMSs Complex structures
Some relational, but mostly
multidimensional DBMSs
Transaction type Mostly updates Mostly query
Transaction volumes High-update volumes Periodic loads and summary calculations
Transaction speed Updates are critical Retrievals are critical
Query activity Low to medium High
Query scope Narrow range Broad range
Query complexity Simple to medium Very complex
Data volumes Hundreds of gigabytes Terabytes to petabytes

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Decision Support Database Requirements

• Database schema
• Must support complex, non-normalized data representations
• Data must be aggregated and summarized
• Queries must be able to extract multidimensional time slices
• Data extraction and filtering
• Allow batch and scheduled data extraction
• Support different data sources and check for inconsistent data or data validation rules
• Encourage advanced integration, aggregation, and classification
• Database size
• Very large databases (VLDBs)
• Advanced storage technologies
• Multiple-processor technologies

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The Data Warehouse (1 of 3)

• Collection of data
• Provides support for decision making
• Components
• Integrated
• Subject-oriented
• Time-variant
• Nonvolatile

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The Data Warehouse (2 of 3)
Table 13.8
Characteristics of Data
Warehouse Data and
Operational Database Data
Characteristic Operational Database Data Data Warehouse Data

Integrated Similar data can have different representations or Provide a unified view of all data
meanings. For example, Social Security numbers elements with a common definition and
may be stored as ###-##-#### or as #########, and representation for all business units.
a given condition may be labeled as T/F or 0/1 or
Y/N. A sales value may be shown in thousands or in
millions.
Subject-oriented Data is stored with a functional, or process, Data is stored with a subject orientation
orientation. For example, data may be stored that facilitates multiple views of the data
for invoices, payments, and credit amounts. and decision making. For example, sales
may be recorded by product, division,
manager, or region.
Time-variant Data is recorded as current transactions. For Data is recorded with a historical
example, the sales data may be the sale of a perspective in mind. Therefore, a time
product on a given date, such as $342.78 on dimension is added to facilitate data
12-MAY-2016. analysis and various time comparisons.
Nonvolatile Data updates are frequent and common. For Data cannot be changed. Data is added
example, an inventory amount changes with only periodically from historical systems.
each sale. Therefore, the data environment Once the data is properly stored, no
is fluid. changes are allowed. Therefore,
the data environment is relatively static.

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The Data Warehouse (3 of 3)

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r classroom use.
Data Marts

• Small, single-subject data warehouse subset


• Provides decision support to a small group of people
• Benefits over data warehouses
• Lower cost and shorter implementation time
• Technologically advanced
• Inevitable “people issues”

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r classroom use.
Twelve Rules That Define a Data Warehouse
Table 13.9 Twelve Rules for a Data Warehouse

Rule No. Description


1 The data warehouse and operational environments are separated.
2 The data warehouse data is integrated.
3 The data warehouse contains historical data over a long time.
4 The data warehouse data is snapshot data captured at a given point in time.
5 The data warehouse data is subject oriented.
6 The data warehouse data is mainly read-only with periodic batch updates from operational data. No online updates
are allowed.
7 The data warehouse development life cycle differs from classical systems development. Data warehouse
development is data-driven; the classical approach is process-driven.
8 The data warehouse contains data with several levels of detail: current detail data, old detail data, lightly
summarized data, and highly summarized data.
9 The data warehouse environment is characterized by read-only transactions to very large data sets. The operational
environment is characterized by numerous update transactions to a few data entities at a time.
10 The data warehouse environment has a system that traces data sources, transformations, and storage.
11 The data warehouse’s metadata is a critical component of this environment. The metadata identifies and defines all
data elements. The metadata provides the source, transformation, integration, storage, usage, relationships, and
history of each data element.
12 The data warehouse contains a chargeback mechanism for resource usage that enforces optimal use of the data by
end users.

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Star Schemas (1 of 5)

• Data-modeling technique
• Maps multidimensional decision support data into a relational database
• Creates the near equivalent of multidimensional database schema from existing
relational database
• Yields an easily implemented model for multidimensional data analysis

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Star Schemas (2 of 5)

• Basic star schema components


• Facts: numeric values that represent a specific business aspect
• Dimensions: qualifying characteristics that provide additional perspectives to a given
fact
• Attributes: used to search, filter, and classify facts
- Slice and dice: ability to focus on slices of the data cube for more detailed analysis
• Attribute hierarchies: provide a top-down data organization
- Aggregation and drill-down/roll-up data analysis

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Star Schemas (3 of 5)

• Star schema representation


• Facts and dimensions represented by physical tables in data warehouse database
• Many-to-one (M:1) relationship between fact table and each dimension table
• Fact and dimension tables
• Related by foreign keys
• Subject to primary and foreign key constraints
• Primary key of a fact table
- Composite primary key because the fact table is related to many dimension tables
- Always formed by combining the foreign keys pointing to the related dimension tables

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Star Schemas (4 of 5)

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Star Schemas (5 of 5)

• Performance-improving techniques for the star schema


• Normalizing dimensional tables
- Snowflake schema: dimension tables can have their own dimension tables
• Maintaining multiple fact tables to represent different aggregation levels
- Save processor cycles at run time, thereby speeding up data analysis
• Denormalizing fact tables
- Improves data access performance and saves data storage space
• Partitioning and replicating tables
- Partitioning: splits tables into subsets of rows or columns and places them close to the client
computer
- Replication: makes copy of table and places it in a different location
- Periodicity: provides information about the time span of the data stored in the table

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r classroom use.
Online Analytical Processing (OLAP)

• Online analytical processing (OLAP) is a BI style whose systems share three


main characteristics
• Multidimensional data analysis techniques – u should include time --
• Advanced database support
• Easy-to-use end-user interfaces

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Multidimensional Data Analysis Techniques

• Data are processed and viewed as part of a multidimensional structure


• Particularly attractive to business decision makers who tend to view business data as
being related to other business data
• Augmented advanced functions
• Data presentation
• Data aggregation, consolidation, and classification
• Computational
• Data-modeling

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Advanced Database Support

• OLAP tools must have the following features to deliver efficient decision
support:
• Access to many different kinds of DBMSs, flat files, and internal and external data
sources
• Access to aggregated data warehouse data and operational database detail data
• Advanced data navigation features
• Rapid and consistent query response times
• Ability to map end-user requests
• Support for very large databases

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Easy-to-Use End-User Interface

• When proper implementation leads to simple navigation and accelerated


decision making or data analysis
• Advanced OLAP features are more useful when access is kept simple
• Many interface features are borrowed from previous generations of data analysis tools

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r classroom use.
OLAP Architecture (1 of 2)

• Designed to meet ease-of-use requirements while keeping the system flexible


• Main architectural components
• Graphical user interface (GUI)
• Analytical processing logic
• Data-processing logic

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OLAP Architecture (2 of 2)

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r classroom use.
Relational OLAP

• Relational online analytical processing (ROLAP)


• Provides OLAP functionality using relational databases and familiar relational tools to
store and analyze multidimensional data
• Extensions added to traditional RDBMS technology
• Multidimensional data schema support within the RDBMS
• Data access language and query performance optimized for multidimensional data
• Support for very large databases (VLDBs)

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Multidimensional OLAP

• Multidimensional online analytical processing (MOLAP)


• Extends OLAP functionality to multidimensional database management systems
(MDBMSs)
- MDBMS uses proprietary techniques store data in matrix-like n-dimensional arrays
- End users visualize stored data as a three dimensional data cube
• Grow to n number dimensions, thus becoming hypercubes
• Held in memory in a cube cache to speed access
• Sparsity: measures density of data held in the data cube

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Relational versus Multidimensional OLAP

Table 13.12
Relational vs.
Multidimensional OLAP
Characteristic ROLAP MOLAP

Schema Uses star schema Uses data cubes


Additional dimensions can be added Multidimensional arrays, row stores,
dynamically column stores
Additional dimensions require re-creation of
the data cube
Database size Medium to large Large

Architecture Client/server Client/server


Standards-based Open or proprietary, depending on vendor
Access Supports ad hoc requests Limited to predefined dimensions
Unlimited dimensions Proprietary access languages
Speed Good with small data sets; average for Faster for large data sets with predefined
medium-sized to large data sets dimensions

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Data Analytics (1 of 4)

• Subset of business intelligence (BI) functionality that encompasses a wide range


of mathematical, statistical, and modeling techniques with the purpose of
extracting knowledge from data
• Explanatory analytics: focuses on discovering and explaining data characteristics and
relationships based on existing data
• Predictive analytics: focuses on predicting future data outcomes with a high degree of
accuracy
• Data mining focuses on the discovery and explanation stages of knowledge
acquisition
• Analyzing massive amounts of data to uncover hidden trends, patterns, and
relationships; to form computer models to simulate and explain the findings; and to
use such models to support business decision making

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Data Analytics (2 of 4)

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Data Analytics (3 of 4)

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Data Analytics (4 of 4)

• Predictive analytics focuses on creating actionable models to predict future


behaviors and events
• Employs mathematical and statistical algorithms, neural networks, artificial
intelligence, and other advanced modeling tools to create actionable predictive
models based on available data
• Used in areas such as customer relationships, customer service, customer retention,
fraud detection, targeted marketing, and optimized pricing

40
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r classroom use.
SQL Analytic Functions (1 of 2)

• The ROLLUP extension


• Used with GROUP BY clause to generate aggregates by different dimensions
• Enables subtotal for each column listed except for the last one, which gets a grand
total
• The CUBE extension
• Used with GROUP BY clause to generate aggregates by the listed columns
• Enables you to get a subtotal for each column listed in the expression, in addition to a
grand total for the last column listed

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SQL Analytic Functions (2 of 2)

• Materialized views
• Dynamic table that contains SQL query command to generate rows and stores the
actual rows
- Created the first time query is run and summary rows are stored in the table
- Automatically updated when base tables are updated
- Requires specified privileges

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r classroom use.
Data Visualization (1 of 2)

• Process of abstracting data to provide a visual data representation that


enhances the user’s ability to comprehend the meaning of the data
• Goal is to allow the user to quickly and efficiently see the data’s big picture by
identifying trends, patterns, and relationships
• The need for data visualization
• Ability to zoom in and out, drill down and up, filter, etc. is one of the many advantages
of current breed of data visualization tools
• Makes it easier to understand data—in particular, large amounts of data
• The science of data visualization
• Roots in cognitive sciences: how the human brain receives, interprets, organizes, and
processes information
- Pattern recognition
- Spatial awareness
- Aesthetics

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Data Visualization (2 of 2)

• Understanding the data


• The same data can be presented in multiple ways
• In general, there are two types of data:
• Qualitative: describes qualities of the data
- Nominal or ordinal
• Quantitative: describes numeric facts or measures of the data

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Summary (1 of 2)

• Business intelligence (BI) is a term for a comprehensive, cohesive, and


integrated set of applications used to capture, collect, integrate, store, and
analyze data with the purpose of generating and presenting information to
support business decision making
• Decision support systems (DSSs) refer to an arrangement of computerized tools
used to assist managerial decision making within a business
• Operational data is not well suited for decision support
• The data warehouse is an integrated, subject-oriented, time-variant, nonvolatile
collection of data that provides support for decision making
• The star schema is a data-modeling technique used to map multidimensional
decision support data into a relational database for advanced data analysis

45
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r classroom use.
Summary (2 of 2)

• Online analytical processing (OLAP) refers to an advanced data analysis


environment that supports decision making, business modeling, and operations
research
• Data analytics is a subset of BI functionality that provides advanced data
analysis tools to extract knowledge from business data
• Data mining automates the analysis of operational data to find previously
unknown data characteristics, relationships, dependencies, and trends
• SQL has been enhanced with analytic functions that support OLAP-type
processing and data generation
• Data visualization provides visual representations of data that enhance the
user’s ability to comprehend the meaning of the data

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