Experiencing MIS 8th by m kronenke chapter 09

Study QuestionsQ1: How do organizations use business intelligence BI systems?. Q3: How do organizations use data warehouses and data marts to acquire data?. Q1: How Do Organizations Use

Business Intelligence Systems

Chapter 9

“Data analysis, where you don’t know the second question to ask until you see the answer to the first one.”

• Tracking race competitors from each of event, and

having unbelievable success selling products to them

• Want to match competitors to personal trainers in

same locale.

• Earn referral fee.

• How to track them? Mailing address? IP address?

Study Questions

Q1: How do organizations use business intelligence (BI) systems?

Q2: What are the three primary activities in the BI process?

Q3: How do organizations use data warehouses and data marts to acquire

data?

Q4: How do organizations use reporting applications?

Q5: How do organizations use data mining applications?

Q6: How do organizations use BigData applications?

Q7: What is the role of knowledge management systems?

Q1: How Do Organizations Use Business

Intelligence (BI) Systems?

Components of Business Intelligence System

How Do Organizations Use BI?

What Are Typical Uses for BI?

• Identifying changes in purchasing patterns

• BI for entertainment

– Netflix has data on watching, listening, and rental habits, however,

determines what people actually want, not what they say

• Predictive policing

– Analyze data on past crimes, including location, date, time, day of

week, type of crime, and related data, to predict where crimes are likely to occur

Q2: What Are the Three Primary Activities in the BI

Process?

Using Business Intelligence to Find Candidate

Parts at AllRoad

• Identified criteria for parts customers might want to print

– Provided by vendors who already agree to make

part design files available for sale

– Purchased by larger customers – Frequently ordered parts

– Ordered in small quantities

• Simple in design (part weight and price as surrogates)

Acquire Data: Extracted Order Data

Sample Extracted Data: Part Data Table

Joining Order Extract and Filtered Parts Tables

Sample Orders and Parts View Data

Creating the Customer Summary Query

Customer Summary

Qualifying Parts Query Design

Publish Results: Qualifying Parts Query Results

Figure

Publish Results: Sales History for Selected

Parts

Ethics Guide: Unseen Cyberazzi

• Data broker or Data aggregator

– Acquires and purchases consumer and other data

from public records, retailers, Internet cookie vendors, social media trackers, and other sources

– Uses it to create business intelligence to sell to

companies and the government

Ethics Guide: Unseen Cyberazzi (cont'd)

• Cheap cloud processing makes processing consumer

data easier and less expensive every day

• Processing happens in secret, behind closed doors

• Data brokers enable you to view data stored about you

– Difficult to learn how to request your data and

torturous to file for it, data usefulness limited

Ethics Guide: Unseen Cyberazzi (cont'd)

• Do you know what data is gathered about you and what is done

with it?

• Have you thought about conclusions data aggregators, or their

clients, could make based on your use of frequent buyer cards?

• Concerned about actions federal government may be taking with regard to data it gathers or buys from data aggregators?

• Where does all of this end? What will life be like for your children

or grandchildren?

Q3: How Do Organizations Use Data Warehouses

and Data Marts to Acquire Data?

• Functions of a Data Warehouse

– Extract data from operational, internal

and external databases

– Cleanse data – Organize, relate data warehouse – Catalog data using metadata

Components of a Data Warehouse

Examples of Consumer Data That Can Be

Purchased

Possible Problems with Source Data

Curse of dimensionality

Data Mart Examples

Q4: How Do Organizations Use Reporting

RFM Analysis: Example RFM Scores

• Recently

• Frequently

• Money

RFM Analysis Classification Scheme

Example of Grocery Sales OLAP Report

http://dwreview.com/OLAP/

http://www.tableausoftware.com

Example of Expanded Grocery Sales OLAP Report

Drill

down

Example of Drilling Down into Expanded Grocery Sales OLAP Report

Q5: How Do Organizations Use Data Mining

Applications?

Unsupervised Data Mining

• Analyst does not start with a priori hypothesis or model

• Hypothesized model created based on analytical results

to explain patterns found

• Example: Cluster analysis

Supervised Data Mining

• Uses a priori model to compute outcome of model

• Prediction, such as regression analysis

• Ex: CellPhoneWeekendMinutes = (12 + (17.5*CustomerAge)

+(23.7*NumberMonthsOfAccount)

= 12 + 17.5*21 + 23.7*6 = 521.7

Market-Basket Example: Dive Shop

Transactions = 400

Decision Trees

• Hierarchical arrangement of criteria to predict a classification or value

• Unsupervised data mining technique

• Basic idea of a decision tree

– Select attributes most useful for classifying

something on some criteria to create “pure

Credit

Score

Decision

Tree

Decision Rules for Accepting or Rejecting Offer to Purchase Loans

• If percent past due is less than 50 percent, then accept loan.

– If percent past due is greater than 50 percent

and

– If CreditScore is greater than 572.6 and – If CurrentLTV is less than 94, then accept

– Purpose of a data story is to explain that why.

what data reveals.

– Data story authors are business professionals like you, not

Q6: How Do Organizations Use BigData

Applications?

• Huge volume – petabyte and larger

• Rapid velocity – generated rapidly

• Great variety

– Structured data, free-form text,

log files, graphics, audio, and video

MapReduce Processing Summary

Google search log

broken into pieces

Google Trends on the Term Web 2.0

• Open-source program supported by Apache Foundation2

• Manages thousands of computers

• Implements MapReduce

– Written in Java

• Amazon.com supports Hadoop as part of EC3 cloud offering

• Query language entitled Pig (platform for large dataset analysis)

Easy to master

– Extensible – Automatically optimizes queries on map-reduce level

Q7: What Is the Role of Knowledge Management

Systems?

• Knowledge Management

– Creating value from intellectual capital and sharing

knowledge with those who need that capital

– Preserving organizational memory by capturing and

storing lessons learned and best practices of key employees

Benefits of Knowledge Management

• Improve process quality

• Increase team strength

• Goal:

– Enable employees to use organization’s

collective knowledge

What Are Expert Systems?

Expert systems

Rule-based IF/THEN

Encode human knowledge

Process IF side

of rules

Report values of all variables

Expert systems shells

Example of IF/THEN Rules

Drawbacks of Expert Systems

1 Difficult and expensive to develop

– Labor intensive – Ties up domain experts

What Are Content Management Systems (CMS)?

• Support management and delivery of documents, other expressions of employee knowledge

• Challenges of Content Management

– Databases are huge – Content dynamic

– Documents do not exist in isolation – Contents are perishable

– In many languages

What are CMS Application Alternatives?

• In-house custom development

database applications to track customer problems

• Off-the-shelf

– Vertical market applications

• Public search engine

How Do Hyper-Social Organizations Manage

Knowledge?

• Hyper-social knowledge management

– Application of social media and related applications for

management and delivery of organizational knowledge resources

Hyper-Social

KM Alternative

Media

Resistance to Hyper-Social Knowledge Sharing

• Employees can be reluctant to exhibit their ignorance

Q8: What Are the Alternatives for Publishing BI?

What Are the Two Functions of a BI Server?

Q9: 2025?

• World generating and storing exponentially more information

about customers, and data mining techniques are better

• Companies know more about your purchasing habits and

Guide: Semantic Security

reports and documents

Guide: Data Mining in the Real World

• Problems:

– Dirty data – Missing values – Lack of knowledge at start of project – Over fitting

– Probabilistic – Seasonality

Active Review

Q1: How do organizations use business intelligence (BI) systems?

Q2: What are the three primary activities in the BI process?

Q3: How do organizations use data warehouses and data marts to

acquire data?

Q4: How do organizations use reporting applications?

Q5: How do organizations use data mining applications?

Q6: How do organizations use BigData applications?

Q7: What is the role of knowledge management systems?

Q8: What are the alternatives for publishing BI?

Case Study 9: Hadoop the Cookie Cutter

• Third-party cookie created by a site other than one you visited

• Generated in several ways, most common occurs when a Web page includes content from multiple sources

– IP address where content was delivered

Case Study 9: Hadoop the Cookie Cutter (cont'd)

• Third-party cookie owner has history of what was shown, what ads clicked, and intervals between interactions

• Cookie log contains data to show how you respond

to ads and your pattern of visiting various Web sites where ads placed

FireFox Lightbeam: Display on Start Up

No Cookies

After Visiting MSN.com

5 Sites Visited Yields 27 Third Parties

Sites Connected to Doubleclick