Accessing Organizational Information - Data Warehouse

WHAT IS DATA WAREHOUSE?

The data warehouse provided the ability to support decision making without disrupting the day-to-day operations because : 

• Operational operation is mainly current - does not include the history for better decision making
• Issue of quality information
• Without information history, it is difficult to tell how and why things change overtime

DATA WAREHOUSE FUNDAMENTALS

Data warehouse - A logical collection of information - gathered from many different operational databases - that supports business analytics activities and decision - making tasks

The primary purpose of a data warehouse is to combined information throughout an   

organization into a single repository for decision-making purposes – data warehouse      

support only analytical processing

Extraction, transformation and loading ( ETL) - Is a process that extracts information from

internal and external databases, transform the information using a common set of enterprise 

definitions, and loads the information into a data warehouse

Data Warehouse - Then send subsets of information to data mart

Data Mart - Contains a subset of data warehouse information.

Data Warehouse Model

Multidimensional Analysis and Data Mining

Cube - Is the common term for the representation of multidimensional information

Once a cube of information is created, users can begin to slice and dice the cube to drill down

into the information. Users can analyze information in a number of different ways and with 

number of different dimensions

Data Mining - The process of analyzing data to extract information not offered by the raw

 data alone

To perform data mining, users need data - mining tools

Data Mining Tools - Use a variety of techniques to find patterns and relationship in large 

volumes of information and infer rules from them that predict future behaviour and guide 

decision making 

Information Cleansing or Scrubbing

A process that weeds out and fixes or discards inconsistent, incorrect, or incomplete 

information. Occur during ETL process and second on the information once if is in the 

data warehouse

Standardizing customer name for Operational System

BUSINESS INTELLIGENCE

  

Refers to applications and technologies that are used to gather, provide access to and analyze data and information to support decision -making efforts. These systems will illustrate business intelligence in the areas of customer profiling, customer support, market research, market segmentation, product profitability, statistical analysis, and  inventory and distribution analysis to name a few

Eg: Excel, Access 

Storing Organizational Information - Database

The computer program used to manage and query database is known as a database management system (DBMS) 

Relational Database Fundamentals 

Information is stored in databases

• Database – maintains information about various types of objects (inventory), events (transactions), people (employees), and places (warehouses)

Database models include:

• Hierarchical database model – information is organized into a tree-like structure (using parent/child relationships) in such a way that it cannot have too many relationships

• Network database model – a flexible way of representing objects and their relationships

• Relational database model – stores information in the form of logically related two dimensional tables

ENTITIES AND ATTRIBUTES

• Entity – a person, place, thing, transaction, or event about which information is stored.

        > The rows in each table contain the entities

• Attributes (fields, columns) – characteristics or properties of an entity class

         > The columns in each table contain the attributes

KEYS AND RELATIONSHIP

Primary keys and foreign keys identify the various entity classes (tables) in the database

• Primary key – a field (or group of fields) that uniquely identifies a given entity in a tables
• Foreign key – a primary key of one table that appears an attribute in another table and acts to provide a logical relationship among the two tables

Relational Database Advantage

i) Increased Flexibility

 A good database can handle changes quickly and easily

Physical view - deals with the physical storage of information on a storage device such as hard disk
Logical View - information focuses on how users logically access information to meet their particular business needs

This separation of logical and physical views is what allows each user to access 
database information differently

ii) Increased Scalability and Performance

A database must scale to meet increased demand, while maintaining acceptable performance levels

Scalability - refers to how well a system can adapt to increased demands
Performance - measures how quickly system performs a certain process or transaction  

iii) Reduced Information Redundancy

 Redundancy - the duplication of information or storing the same information in multiple places

Eliminating information redundancy saves space, makes performing information update easier, improves information quality.

iv) Increased Information Integrity ( Quality)

Information Integrity - is a measure of the quality of information.

Integrity Constraints - rules that help ensure the quality of information

 > Relational Integrity Constraints
Rules that enforce basic and fundamental information- based constraints

> Business - Critical Integrity Constraints
Enforce business rules vital to an organization's success and often require more insight and knowledge than relational integrity constraints 

v) Increased Information Security 
Databases offer many security features including passwords, access levels and access controls.

Database Management Systems 
DBMS - is software through which users and application programs interact with a database

DATA DRIVEN WEBSITES

Interacting Directly  and Indirectly with a Database through a DBMS 

Is an interactive website kept constantly updated and relevant to the needs of its customers through the use of a database. For example Wikipedia, social network.
Data driven website invites visitors to select and view what they are interested in by inserting a query.

Wikipedia - Data Driven Website

Data Driven Website Advantage 

* Development : Allows the website owner to make change anytime.

* Content Management : A static website requires programmer to make updates. 

* Improved Stability : Any programmer who has to update a website from "static"            templates must be very organized to keep track of all the source files.

Data Driven Business Intelligence

BI in a DDW

Integrating Information among Multiple Databases

Integration - Allows separate systems to communicate directly with each other

Forward Integration - Takes information entered into a given system and sends it automatically to all downstream systems and processes.

Backward Integration - Takes information entered into a given system and sends it automatically to all upstream system an processes

A forward and backward customer information integration

Integrating Customer Information among Databases

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Valuing Organizational Information

After a long break, here you go guys some notes from Chapter 6!

Organizational information comes at different levels and in different formats and "granularities"

Information granularities - Refers to the extent of detail within the information. Employees must be able to  correlate the different levels, formats and granularities of information when making decisions.

*Example : If employees are using a supply chain management system to make decisions, they might find that their suppliers send information in different formats and granularity at different levels.

The Value of Transactional and Analytical Information 

Transactional Information - Encompasses all of the information contained within a single business process or unit of work and its primary purpose is to support the performing of daily operational task 

*Example : Withdrawing cash from an ATM, making an airline reservation

Analytical Information - Encompass all organizational information, and its primary purpose is to support the performing of managerial analysis tasks.

*Example : Trends, sales, product statistics

The Value of Timely Information

Follow the trends to require information.

Real-time information - immediate, up-to-date information

Real-time systems - provide real-time information in response to query requests. 

Many organizations use real-time systems to exploit key corporate transactional information.

The timeliness of the information required must be evaluated for each business decision. Organizations do not want to find themselves using real-time information to make a bad decision faster.

The Value if Quality Information

Five common characteristics of  high-quality information :

Accuracy : Are all the values correct?  For example, is the name spelled correctly?

Completeness : Are any of the value missing? For example, is the address complete including street, city?

Consistency : Is aggregate or summary information in agreement with detailed information? For example, are there any duplicate customer? 

Uniqueness : Is each transaction, entity represented only once in the information? For example, are there any duplicate customer?

Timeliness : Is the information current with respect to the business requirements? For example, is information updated weekly, daily or hourly?

THE COST OF POOR INFORMATION

Can lead to making the wrong decisions. Bad information can cause serious business ramifications such as : 

• Inability to accurately track customers, which directly affects strategic initiatives such as CRM and SCM
• Difficulty identifying the organization's valuable customer
•  Difficulty tracking revenue because of inaccurate invoices.
• Inability to build strong relationships with customers

THE BENEFITS OF GOOD INFORMATION

Can significantly improve the chances of making a good decision and directly increase an organization's bottom line. Such information ensures that the basis of the decisions is accurate

Organizational Structures That Support Strategic Initiatives

IT Roles and Responsibilities

Chief Information Officer (CIO) 

Responsible for :  > Overseeing all uses of information technology
                           > Ensuring the strategic alignment of IT with business goals and objectives.

Broad functions of a CIO include :

• Manager - ensure the delivery of all IT projects, on time ad within budgets
• Leader - ensure the strategic vision of IT is in line with the strategic vision of the organization
• Communicator - advocate and communicate the IT strategy by building and maintaining strong executive relationships 

Chief Technology Officer (CTO)

Responsible for :  > Ensuring the throughput, speed, accuracy, availability and reliability of an
                             organization's information technology
                           > Have direct responsibility for ensuring the efficiency of IT systems throughout
                              the organization

Chief Security Officer (CSO)

Responsible for :  > Ensuring the security of IT systems and developing strategies and IT safeguards
                              against attacks from hackers and viruses.

Chief Privacy Officer (CPO)

Responsible for :  > Ensuring the ethical and legal use of information within an organization.

Many CPOs are lawyers by training, enabling them to understand the often complex legal issues surrounding the use of information.

Chief Knowledge Officer (CKO)

Responsible for :  > Collecting, maintaining and distributing the organization's knowledge.
                           > Designs program and systems that make it easy for people to
                              reuse knowledge.

• These systems create repositories of organizational documents, methodologies, tools and practices and they establish methods for filtering the information.  
• The CKO must continuously encourage employee contributions to keep the systems up-to-date.

Okay now lets move on to another subtopic which is The Gap between Business Personnel and IT Personnel!

• Business personnel possess expertise in functional area such as marketing, accounting, sales.
• IT personnel have the technological expertise.
• The gap happen because of there is no effective communication whether through written or oral communication between both parties.

The way to decrease the gap can be done by improving communications between both parties.

• Business personnel must seek to increase their understanding of IT. This is because it will benefit their careers to understand do's and don'ts regarding IT.
• Organization must develop strategies for integrating its IT personnel to understand various business functions.
• CIO is responsible to ensure effective communications between business and IT personnel!

Organization Fundamental :

ETHICS > The principles and standards that guide our behavior toward other people. 

• Privacy is one of the biggest ethical issues and become one of the biggest barriers to the growth of ebusiness
• Several types of ethical issues in IT are plagiarism, piracy, hacking

SECURITY > Downtime is a software failure and unplanned downtime can strike  at any time from any number of causes 

Measuring the Success of Strategic Initiatives

Hello guys! Some notes from Chapter 4, enjoy! :D

Designing metrics requires an expertise that neither IT nor business professional usually possess.Metrics are about neither technology nor business strategy.

Key Perfomance Indicator (KPIs)
The measures that are tied to business drivers. Metrics are the detailed measures that feed those KPIs.

Efficiency and Effectiveness

• Efficiency IT metrics : Measure the perfomance of the IT system itself including throughput, speed, and availability.
• Effectiveness  IT metrics : Measure the impact IT has on business processes and activities including customer satisfaction, conversion rates, and self-through increases.

Benchmarking - Baseline Metrics.

• Benchmarks : Baseline values the system seeks to attain
• Benchmarking : A process of continuously measuring system results, comparing those results to optimal system perfomance (benchmark values), and identifying steps and procedures to improve system perfomance.

The Interrelationship of  Efficiency and Effectiveness  IT Metrics

Efficiency IT Metrics focus on technology and include :

1. Throughput – amount of information that can travel through a system at any point in time
2. Speed – amount of time to perform a transaction
3. Availability – number of hours a system is available
4. Accuracy – extent to which a system generates correct results
5. Web traffic – includes number of pageviews, number of unique visitors, and time spent on a web page
6. Response time – time to respond to user interactions

Effectiveness  IT Metrics focus on an organization's goals, strategies and objectives.

1. Usability – the ease with which people perform transactions and/or find information
2. Customer satisfaction –  such as the percentage of existing customers retained
3. Conversion rates – number of customers an organization “touches” for the first time and convinces to purchase products or services
4. Financial – such as return on investment, cost-benefit analysis, etc

 Metrics for Strategic Initiatives
A metric is nothing more than a standard measure to assess perfomance in a particular area. Most managers are familiar with financial metrics but unfamiliar with information system metrics. The following metrics will help managers measure and manage their strategic initiatives : 

• Website Metrics

Most companies measure the traffic on a website as the primary deterinant of the website's success. A company can use web traffic analysis or web analytics to determine the revenue generated, the number of new customers acquired, and so on.

• Supply Chain Management (SCM) Metrics

Can help an organization understand how it's operating over a given time period. SCM can cover many areas including procurement, production, distribution, inventory, transportation

• Customer Relationship Management (CRM) Metrics

Wondering what CRM metrics to track and monitor using reporting and real-time perfomance dashboards?

• Business Process Reengineering (BPR) and Enterprise Resource Planning (ERP) Metrics.

Addressing some of the weaknesses and vagueness of previous measurement techniques, the balanced scorecard approach provides a clear prescription as to what companies should measure in order to balance the financial perspective. 

The balanced scorecard is a management system, that enables organizations to clarify their vision and strategy and translate them into action. It provides feedback around both the internal business processes and external outcomes in order to continuously improve strategic perfomance and results

Strategic Initiatives for Implementing Competitive Advantages

Supply Chain Management (SCM)

Involves the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability. The four basic components of supply chain management are : 

• Supply Chain Strategy - The strategy for managing all the resources required to meet customer     demand for all products and services
• Supply Chain Partners - The partners chosen to deliver finished products,  raw materials, and services including pricing, delivery, and payment processes along with partner relationship monitoring metrics.
• Supply Chain Operation - The schedule for production activities including testing packaging, and preparation for delivery. Measurements for this component include productivity and quality.
• Supply Chain Logistics - The product delivery processes and elements including orders, warehouses, carriers and invoicing. 

Supply Chain for a Product Purchased from Walmart

Effective and Efficient Supply Chain Management's Effect on Porter's Five Forces

Customer Relationship Management (CRM)

Involves managing all aspects of a customer's relationship with an organization to increase customer loyalty and retention and an organization's profitability. 

CRM allows an organization to gain insight into customer's shopping and buying behaviors in order to develop and implement enterprise-wide strategies.    

CRM overview

Business Process Reengineering (BPR)

The analysis and redesign of workflow within and between enterprises. The purpose of BPR is to make all business process the best-in-class. 

FINDING OPPORTUNITY USING BPR

• As you can see in the picture, there are different ways to travel the same road.
• A company could improve the way that it travels the road by moving from foot to horse and then from horse to car.
• True BPR would look at taking a different path.
• Company can use an airplane to get to its final destination despite using the road.
• Companies often follow the same indirect path for doing business, not realizing there might be a different, faster and more direct way of doing business.

Seven Principles of Business Process Reengineering

Enterprise Resource Planning (ERP)

Integrates all departments and functions throughout an organization into a single IT system so that employees can make decisions by viewing enterprise-wide information on all business operations. 

Identifying Competitive Advantage

What is competitive advantage?

• A feature of a product or service on which customers place a greater value than they do on similar offerings from competitors.
• Competitive advantages provide the same product or service either at a lower price or with additional value that can fetch premium prices.
• Unfortunately, competitive advantages are typically temporary, because competitors often quickly seek ways to duplicate them.
• Then, the company should start the new competitive advantage.

Managers use three common tools to analyze competitive intelligence and develop competitive advantages including : 

1. The Five Forces Model - Evaluating Industry Attractiveness

Michael Porter's Five Forces Model is useful tool to aid organization in challenging decision whether to join a new industry or new segment. 

Porter's Five Forces Model

Micheal Porter's

BUYER POWER

• The ability of buyers to affect the price they must pay for an item.
• High - When buyers have many choices of whom to buy.
• Low - When their choices are few. 
• To reduce buyer power is by manipulating switching costs, costs that make customers reluctant to switch to another product or services.
• Using loyalty programs, which reward customers based on their spending. For example, in travel industry by rewarding them with free airline tickets or hotel stays.

SUPPLIER POWER

• The ability to influence the prices they charge for supplies (including materials, labor, and services)
• Supplier power is high when buyers have few choices of whom to buy from.
• For example, patient who need to purchase cancer-fighting drugs have no power over price and must pay because there are few available alternatives.
• Supplier power is low when their choices are many.

THREAT OF SUBSTITUTE PRODUCTS OR SERVICES 

• High - When there are many alternatives to a product or service
• Low -  There are few alternatives from which to choose.
• For example, travelers have numerous substitutes for airline transportation including automobiles, trains, and boats.  

THREAT OF NEW ENTRANTS

• High - When it is easy for new competitors to enter a market.
• Low -  When there are significant entry barriers to entering a market.
• An entry barrier is a feature of a product or service that customers have come to expect and entering competitors must offer the same for survival.
• For example, a new bank must offer its customers an array of MIS- enabled services, including ATMs, and online bill paying ( Maybank and CIMB) 

      

       2. The Three Generic Strategies - Choosing A Business Focus

Porter's Three Generic Strategies

COST LEADERSHIP

• Becoming a low-cost producer in the industry allows the company to lower prices to customers.
• Competitors with higher costs cannot afford to compete with the low-cost leader on price. 

DIFFERENTIATION

• Create competitive advantage by distinguishing their products on one or more features important to their customers.
• Unique features or benefits may justify price differences.

FOCUSED STRATEGY

• Target to a niche market.
• Concentrates on either cost leadership or differentiation.

      3. Value Chain Analysis - Executing Business Strategies

The Value Chain 

SUPPLY CHAIN 

• A chain or series of processes that adds value to product & service for customer.
• Add value to its products and services that support a profit margin for the firm.