Chapter Eight- Textbook Notes.docx

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Western University
Computer Science
Computer Science 1032A/B
Diane Goldstein

CompSci 1032a Taylor Ward November 13, 2011 Chapter Eight: Decision Making and Business Intelligence Challenges of Making Decisions - Decision making daily occurrence for business managers, factors making business decisions challenging: uncertainty and complexity, information overload, data quality Information Overload - Storage capacity increases, cost decreases, basically unlimited today, exponential growth both inside and outside organizations, used to improve decision making - Ability to store any size customer data, allows for better understanding of customers - Data can be used for forecasting competitive strength (when making decisions) - Business manager’s challenge: find appropriate data, incorporate this data into decision making - Information systems: help and hinder Data Quality - (processed) data from operational systems can be used for basic reports (e.g. sales projections) - Raw data usually unsuitable for sophisticated reporting or data mining (missing values, inconsistent, data not integrated, wrong granularity, too much data) Online Transaction Processing (OLTP) system - Collects data electronically and processes transactions online - Backbone of all functional, cross-functional, and interorganizational systems in an organization - OLTP support decision making: provides raw info about transactions, info of status of organization Transaction Processing - Real-time processing: transactions entered and processed immediately upon entry (airline reservation) - Batch processing: system waits until it has batch of transactions before data are processed and information is updated (transfer of all daily branch transactions to central office for processing) Data Resource Challenge - While data may be collected in OLTP, data may not be used to improve decision making - Data as an asset? Asset: resource from which future economic benefits may be obtained, treat data as important resource Online Analytic Processing - Focus on making OLTP-collected data useful for decision making, provides ability to sum, count, average, and perform other simple arithmetic operations on groups of data, report has measures and dimensions Business Intelligence (BI) Systems: Provide information for improving decision making, primary systems (reporting, data-mining, knowledge management, expert systems) Reporting Systems - Integrate data from multiple sources, process data (sort, group, sum, average, compare), results formatted into reports, improve decision making by providing right info to right user at right time Data-Mining Systems: Process data using statistical techniques: regression analysis, decision tree analysis - Look for patterns and relationships to anticipate events or predict outcomes: market-basket analysis, predict donations - Application of statistical techniques to find patterns and relationships among data, represents convergence of disciplines, takes adv. of developments in data management to process huge databases Unsupervised Data Mining - Analysis run before model created, data-mining technique applied and then results are observed, hypothesis created after analysis to
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