Chapter 6

Foundations of Business
Intelligence: Databases
and Information
Management

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 Essentials of Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases and
Information Management

Student Learning Objectives

• What is a database and how does a

relational database organize data?

• What are the principles of a database

management system?

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 Essentials of Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases and
Information Management

Student Learning Objectives

• What are the principal tools and

technologies for accessing information from
databases to improve business performance
and decision making?

• Why are information policy, data

administration, and data quality assurance
essential for managing the firm’s data
resources?

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 Essentials of Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases and
Information Management

What is a database and how does a relational database organize data?

• Database:
• Collection of related files containing records on people,
places, or things.
• Prior to digital databases, business used file cabinets with
paper files.
• Entity:
• Generalized category representing person, place, thing on
which we store and maintain information
• E.g., SUPPLIER, PART
• Attributes:
• Specific characteristics of each entity:
• SUPPLIER name, address
• PART description, unit price, supplier
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 Essentials of Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases and
Information Management

What is a database and how does a relational database organize data?

The Data Hierarchy

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.

Figure 6.1

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 Essentials of Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases and
Information Management

What is a database and how does a relational database organize data?

• Relational database:
• Organize data into two-dimensional tables (relations) with
columns and rows.
• One table for each entity:
• E.g., (CUSTOMER, SUPPLIER, PART, SALES)
• Fields (columns) store data representing an attribute.
• Rows store data for separate records, or tuples.
• Key field: uniquely identifies each record.
• Primary key:
• One field in each table
• Cannot be duplicated
• Provides unique identifier for all information in any row

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 Essentials of Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases and
Information Management

What is a database and how does a relational database organize data?

A Relational Database Table

A relational database organizes data in the form of two-dimensional tables.

Illustrated here is a table for the entity SUPPLIER showing how it represents the
entity and its attributes. Supplier_Number is the key field.

Figure 6.2

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 Essentials of Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases and
Information Management

What is a database and how does a relational database organize data?

The PART Table

Data for the entity PART

have their own separate
table. Part_Number is
the primary key and
Supplier_Number is the
foreign key, enabling
users to find related
information from the
SUPPLIER table about
the supplier for each
part.

Figure 6.3

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 Essentials of Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases and
Information Management

The Database Approach to Data Management

• Establishing relationships
• Entity-relationship diagram
• Used to clarify table relationships in a relational
database
• Relational database tables may have:
• One-to-one relationship
• One-to-many relationship
• Many-to-many relationship
• Requires “join table” or intersection relation
that links the two tables to join information

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 Essentials of Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases and
Information Management

What is a database and how does a relational database organize data?

The shaded
Sample Order Report
areas show
which data
came from
the
SUPPLIER,
LINE_ITEM,
and ORDER
tables. The
database
does not
maintain data
on Extended
Price or
Order Total
because they
can be
derived from
other data in
the tables.
Figure 6.5
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 Essentials of Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases and
Information Management

What is a database and how does a relational database organize data?

The Final Database Design with Sample Records

Figure 6.6

The final design of

the database for
suppliers, parts, and
orders has four
tables. The
LINE_ITEM table is a
join table that
eliminates the many-
to-many relationship
between ORDER and
PART.

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 Essentials of Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases and
Information Management

What is a database and how does a relational database organize data?

Entity-Relationship Diagram for the Database

with Four Tables

This diagram shows the relationship between the entities

SUPPLIER, ART, LINE_ITEM, and ORDER.

Figure 6.7

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 Essentials of Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases and
Information Management

What are the principles of a database management system?

DBMS

• Specific type of software for creating, storing,

organizing, and accessing data from a database
• Separates the logical and physical views of the data
• Logical view: how end users view data
• Physical view: how data are actually structured and
organized
• Examples of DBMS: Microsoft Access, DB2, Oracle
Database, Microsoft SQL Server, MySQL,

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 Essentials of Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases and
Information Management

What are the principles of a database management system?

Human Resources Database with Multiple Views

Figure 6.8

A single human
resources database
provides many
different views of
data, depending on
the information
requirements of the
user. Illustrated here
are two possible
views, one of interest
to a benefits
specialist and one of
interest to a member
of the company’s
payroll department.

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 Essentials of Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases and
Information Management

What are the principles of a database management system?

The Three Basic Operations of a Relational DBMS

Figure 5-8

Figure 6.9 The select, project, and join operations enable data from
two different tables to be combined and only selected
attributes to be displayed.
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 Essentials of Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases and
Information Management

What are the principles of a database management system?

Capabilities of Database Management Systems

• Data definition capabilities:
• Specify structure of content of database.
• Data dictionary:
• Automated or manual file storing definitions of data elements
and their characteristics.
• Querying and reporting:
• Data manipulation language
• Structured query language (SQL)
• Microsoft Access query-building tools
• Report generation, e.g., Crystal Reports

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 Essentials of Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases and
Information Management

What are the principles of a database management system?

Access Data Dictionary Features

Microsoft Access has
a rudimentary data
dictionary capability
that displays
information about the
size, format, and other
characteristics of each
field in a database.
Displayed here is the
information
maintained in the
SUPPLIER table. The
small key icon to the
left of
Supplier_Number
indicates that it is a
key field.

Figure 6.10

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 Essentials of Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases and
Information Management

What are the principles of a database management system?

An Access Query

Illustrated here
is how the
query in Figure
6-10 would be
constructed
using Microsoft
Access query-
building tools.
It shows the
tables, fields,
and selection
criteria used for
the query.

Figure 6.12

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 Essentials of Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases and
Information Management

Using Databases to Improve Business Performance and Decision Making

The Challenge of Big Data

• Massive quantities of unstructured and semi-
structured data from Internet and networked
services and applications
• Big datasets provide opportunity more patterns
and insights than smaller datasets, e.g.
• Customer behavior
• Weather patterns
• Requires new technologies and tools

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 Essentials of Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases and
Information Management

Using Databases to Improve Business Performance and Decision Making

Business Intelligence Infrastructure

• Array of tools for obtaining useful

information from internal and external
systems and big data
• Data warehouses
• Data marts
• Hadoop
• In-memory computing
• Analytical platforms

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 Essentials of Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases and
Information Management

Using Databases to Improve Business Performance and Decision Making

Data Warehouses
• Data warehouse:
• Database that stores current and historical data that may be of
interest to decision makers
• Consolidates and standardizes data from many systems,
operational and transactional databases
• Data can be accessed but not altered

• Data mart:
• Subset of data warehouses that is highly focused and isolated
for a specific population of users

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 Essentials of Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases and
Information Management

Using Databases to Improve Business Performance and Decision Making

Data Mining
• Finds hidden patterns and relationships in large
databases and infers rules from them to predict future
behavior
• Types of information obtainable from data mining
• Associations: occurrences linked to single event
• Sequences: events linked over time
• Classifications: patterns describing a group an item
belongs to
• Clustering: discovering as yet unclassified groupings
• Forecasting: uses series of values to forecast future values

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 Essentials of Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases and
Information Management

Using Databases to Improve Business Performance and Decision Making

Databases and the Web

• Firms use the Web to make information from their
internal databases available to customers and
partners.
• Middleware and other software make this possible
• Web server
• Application servers or CGI
• Database server

• Web interfaces provide familiarity to users and

savings over redesigning legacy systems.

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 Essentials of Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases and
Information Management

Using Databases to Improve Business Performance and Decision Making

Linking Internal Databases to the Web

Users access an organization’s internal database through the

Web using their desktop PCs and Web browser software.

Figure 6.15

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 Essentials of Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases and
Information Management

Managing Data Resources

Ensuring Data Quality

• Poor data quality: major obstacle to successful customer
relationship management
• Data quality problems: caused by
• Redundant and inconsistent data produced by multiple
systems
• Data input errors
• Data quality audit: structured survey of the accuracy and
completeness of data
• Data cleansing: detects and corrects incorrect,
incomplete, improperly formatted, and redundant data

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