Mgt 20600: Mgt 20600: IT Management & ApplicationsIT Management & Applications

Data Warehouses,Data Warehouses,Business Intelligence,Business Intelligence,

Management Information SystemsManagement Information Systems

TuesdayTuesday

April 11, 2006April 11, 2006

RemindersReminders ReadingReading

– For todayFor today Fundamentals text, Chapter Six, Information and Decision Support Fundamentals text, Chapter Six, Information and Decision Support

SystemsSystems HomeworkHomework

– Homework FourHomework Four DatabasesDatabases Due this Thursday, April 14Due this Thursday, April 14thth, by 5pm, by 5pm

– Homework FiveHomework Five Decision Support SystemsDecision Support Systems Due Friday, April 21Due Friday, April 21stst by 5pm by 5pm

Exam 2Exam 2– Tuesday, April 25Tuesday, April 25thth

– 75 points75 points– Similar types of questions as on Exam 1Similar types of questions as on Exam 1– Covers Telecom & Networks, Databases, Decision Support SystemsCovers Telecom & Networks, Databases, Decision Support Systems

Next week: DSSNext week: DSS

Data Warehouses, Data Marts, Data Warehouses, Data Marts, and Data Miningand Data Mining

Data warehouse: Data warehouse: collects business collects business information from many sources in information from many sources in the enterprisethe enterprise

Data mart: Data mart: a subset of a data a subset of a data warehousewarehouse

Data mining: Data mining: an information-an information-analysis tool for discovering patterns analysis tool for discovering patterns and relationships in a data and relationships in a data warehouse or a data martwarehouse or a data mart

Data Warehouses, Data Marts, Data Warehouses, Data Marts, and Data Miningand Data Mining

Elements of a Data WarehouseElements of a Data Warehouse

Data Warehouse ExampleData Warehouse Example

Home Depot in 2002 launched a 48 Home Depot in 2002 launched a 48 terabyte IBM DB2 data warehouseterabyte IBM DB2 data warehouse

Contains three years of sales historyContains three years of sales history The warehouse is intended to take the The warehouse is intended to take the

guesswork out of labor scheduling as well guesswork out of labor scheduling as well as inventory planningas inventory planning

Lowe's has had a Teradata warehouse with Lowe's has had a Teradata warehouse with that functionality since 2000that functionality since 2000

Data Warehouse ExampleData Warehouse Example Premier Inc. sells access to clinical data it gathers from 400 Premier Inc. sells access to clinical data it gathers from 400

hospitals to pharmaceutical manufacturershospitals to pharmaceutical manufacturers Last year, the company's IBM Red Brick data warehouse had Last year, the company's IBM Red Brick data warehouse had

grown to 3TBgrown to 3TB One table included 3 billion entriesOne table included 3 billion entries "When you go through 3 billion rows of data, you get long "When you go through 3 billion rows of data, you get long

runtimes," says Chris Stewart, director of data warehouse runtimes," says Chris Stewart, director of data warehouse architecture. architecture.

The problem wasn't just the size of the database, however, but The problem wasn't just the size of the database, however, but how clients used the data. how clients used the data.

"Our users want to access all of the data from top to bottom," says "Our users want to access all of the data from top to bottom," says StewartStewart

The complex, multipass queries created by Premier's 4,000 users The complex, multipass queries created by Premier's 4,000 users each week were slowing performance. Some wouldn't run at alleach week were slowing performance. Some wouldn't run at all

Stewart brought in an all-inclusive data warehouse appliance from Stewart brought in an all-inclusive data warehouse appliance from Netezza Corp. in Framingham, MassNetezza Corp. in Framingham, Mass

Some calculations that took one or two days now finish in six to Some calculations that took one or two days now finish in six to eight minutes on the appliance's 108 processorseight minutes on the appliance's 108 processors

Data Mart ExampleData Mart Example ACNielsen's Paris officesACNielsen's Paris offices Customers are interested in very specific subsets Customers are interested in very specific subsets

of data and specific aggregations of data and specific aggregations ACNielson has produced thousands of data marts ACNielson has produced thousands of data marts

as part of a project called the Data Mart Factory as part of a project called the Data Mart Factory 4TB master data warehouse that includes 4TB master data warehouse that includes

regularly updated data from retailersregularly updated data from retailers Runs it through a system that cranks out 3,000 Runs it through a system that cranks out 3,000

client-specific data marts that ACNielsen presents client-specific data marts that ACNielsen presents to 1,000 customers in the retailing and consumer to 1,000 customers in the retailing and consumer product manufacturing industriesproduct manufacturing industries

Each data mart is refreshed weeklyEach data mart is refreshed weekly

Data Warehouses, Data Marts, Data Warehouses, Data Marts, and Data Miningand Data Mining

Common Data-Mining ApplicationsCommon Data-Mining Applications

Data Mining ExampleData Mining Example7-Eleven7-Eleven

Keyes' eyes were opened to the strategic Keyes' eyes were opened to the strategic importance of IT during a trip he made in importance of IT during a trip he made in 1990 to visit 7-Eleven's licensees in Japan1990 to visit 7-Eleven's licensees in Japan

Stores customized their offerings to local Stores customized their offerings to local demand and by the assortment of fresh demand and by the assortment of fresh foods they offered, from sushi to foods they offered, from sushi to sandwichessandwiches

The Japanese did it with scanning data, The Japanese did it with scanning data, rudimentary data warehouses and a rudimentary data warehouses and a nascent in-store ordering systemnascent in-store ordering system

When he became CEO, Keyes knew that When he became CEO, Keyes knew that the U.S. stores had to do the samethe U.S. stores had to do the same

Data Mining ExampleData Mining Example Online retailer Overstock.com Inc. has begun connecting Online retailer Overstock.com Inc. has begun connecting

users to a real-time data warehouse it completed last users to a real-time data warehouse it completed last monthmonth

The project's goal is to help employees gain insight into the The project's goal is to help employees gain insight into the effectiveness of the company's online and e-mail effectiveness of the company's online and e-mail advertising campaigns. advertising campaigns.

Overstock is using transactional data management tools Overstock is using transactional data management tools from GoldenGate Software Inc. to pull information directly from GoldenGate Software Inc. to pull information directly from its business systems into the data warehousefrom its business systems into the data warehouse

Now the data warehouse receives Web site clickstream Now the data warehouse receives Web site clickstream data in real time, financial and product-sales data every 15 data in real time, financial and product-sales data every 15 minutes and other information hourly. minutes and other information hourly.

"When we launch campaigns now, we can look within five "When we launch campaigns now, we can look within five minutes and see if they are producing lift or revenue that minutes and see if they are producing lift or revenue that would not normally have happened," Garcella said. would not normally have happened," Garcella said.

"You can't wait until the next day or three hours later to get "You can't wait until the next day or three hours later to get that data." that data."

Online Analytical Processing Online Analytical Processing (OLAP)(OLAP)

Software that allows users to explore data Software that allows users to explore data from a number of different perspectivesfrom a number of different perspectives

Comparison of OLAP and Data MiningComparison of OLAP and Data Mining

OLAP in DepthOLAP in Depth One core software tool is online analytical processing One core software tool is online analytical processing

(OLAP)(OLAP) Extracts, structures and stores warehoused data to enable Extracts, structures and stores warehoused data to enable

quick, multidimensional analysisquick, multidimensional analysis A dimension can be any variable your company tracks: A dimension can be any variable your company tracks:

customer locations, sales volumes, product development customer locations, sales volumes, product development costs and so oncosts and so on

An OLAP data set is made up of dimensions and measures, An OLAP data set is made up of dimensions and measures, which can then be used for queries to elicit detailed data which can then be used for queries to elicit detailed data breakdowns and information on associations among breakdowns and information on associations among variablesvariables

For example, a grill manufacturer could use an OLAP query For example, a grill manufacturer could use an OLAP query to correlate grill sales with weather conditions across to correlate grill sales with weather conditions across various locations, to determine how heat waves affect its various locations, to determine how heat waves affect its business in different regions.business in different regions.

Business IntelligenceBusiness Intelligence

Business intelligence (BI): Business intelligence (BI): gathering gathering the right information in a timely the right information in a timely manner and usable form and analyzing manner and usable form and analyzing it to have a positive impact on businessit to have a positive impact on business

Knowledge management: Knowledge management: capturing capturing a company’s collective expertise and a company’s collective expertise and distributing it wherever it can help distributing it wherever it can help produce the biggest payoffproduce the biggest payoff

Business Intelligence ExampleBusiness Intelligence Example Continental Airlines Inc. from worst to first.Continental Airlines Inc. from worst to first. BI that Continental gleaned from its customers helped move it from BI that Continental gleaned from its customers helped move it from

last place in travelers' opinions nine years ago to the winner of this last place in travelers' opinions nine years ago to the winner of this year's award for best airline from London-based OAG Worldwide Ltd. year's award for best airline from London-based OAG Worldwide Ltd.

The first move Continental made to improve frequent-flier relations The first move Continental made to improve frequent-flier relations back in the mid-'90s was to consolidate 55 databases worldwide into back in the mid-'90s was to consolidate 55 databases worldwide into a single Teradata data warehousea single Teradata data warehouse

"We wanted one voice of the customer “"We wanted one voice of the customer “ The goal was to identify high-yield customers, create loyalty The goal was to identify high-yield customers, create loyalty

programs and get more immediate data on the cost of each flightprograms and get more immediate data on the cost of each flight Flight attendants now receive information from the data warehouse Flight attendants now receive information from the data warehouse

about high-value customers on a flight so they can personally about high-value customers on a flight so they can personally express the airline's interest in and knowledge about the customers' express the airline's interest in and knowledge about the customers' recent flying experiences with Continentalrecent flying experiences with Continental

The company's financial analysts can get information about the The company's financial analysts can get information about the profitability of each flight instantly after "wheels up," Cook says.profitability of each flight instantly after "wheels up," Cook says.

In the future, Continental wants the data warehouse to use real-time In the future, Continental wants the data warehouse to use real-time clickstream data to automatically generate targeted offers to clickstream data to automatically generate targeted offers to Continental's Web site visitors. Continental's Web site visitors.

Business Intelligence ExampleBusiness Intelligence Example Data warehouse cuts costs for ...Data warehouse cuts costs for ... cost-conscious Southwest cost-conscious Southwest

Airlines CoAirlines Co The Dallas-based carrier centralized its BI group two years ago The Dallas-based carrier centralized its BI group two years ago

around a Teradata data warehouse in order to keep a lid on IT around a Teradata data warehouse in order to keep a lid on IT costs through better systems management and more efficient costs through better systems management and more efficient staffing policiesstaffing policies

"We're the low-cost airline, so we should have a low-cost "We're the low-cost airline, so we should have a low-cost infrastructure" infrastructure"

Besides helping to hold down IT spending, the 2TB data Besides helping to hold down IT spending, the 2TB data warehouse helps business analysts cut corporate costswarehouse helps business analysts cut corporate costs

Annual savings from ideas generated through use of the data Annual savings from ideas generated through use of the data warehouse at between $1.2 million and $1.4 millionwarehouse at between $1.2 million and $1.4 million

As a result of that success, the data warehouse is destined to As a result of that success, the data warehouse is destined to grow. It will increase to 3TB by next summer and possibly double grow. It will increase to 3TB by next summer and possibly double that volume by 2007. that volume by 2007.

IT team is developing better ways of handling ad hoc query IT team is developing better ways of handling ad hoc query requests from end users and creating dashboard-style tools for the requests from end users and creating dashboard-style tools for the airline's executives. airline's executives.

Management Information Management Information Systems in PerspectiveSystems in Perspective

A management information system A management information system (MIS) provides managers with (MIS) provides managers with information that supports effective information that supports effective decision making and provides decision making and provides feedback on daily operationsfeedback on daily operations

The use of MISs spans all levels of The use of MISs spans all levels of managementmanagement

Management Information Management Information Systems in PerspectiveSystems in Perspective

Sources of Managerial InformationSources of Managerial Information

Inputs to a Management Inputs to a Management Information SystemInformation System

Internal data sourcesInternal data sources– TPSs and ERP systems and related TPSs and ERP systems and related

databases; data warehouses and data databases; data warehouses and data marts; specific functional areas marts; specific functional areas throughout the firmthroughout the firm

External data sourcesExternal data sources– Customers, suppliers, competitors, and Customers, suppliers, competitors, and

stockholders, whose data is not already stockholders, whose data is not already captured by the TPS; the Internet; captured by the TPS; the Internet; extranetsextranets

Outputs of a Management Outputs of a Management Information SystemInformation System

Scheduled report: Scheduled report: produced periodically, or on produced periodically, or on a schedulea schedule

Key-indicator report: Key-indicator report: summary of the previous summary of the previous day’s critical activitiesday’s critical activities

Demand report: Demand report: developed to give certain developed to give certain information at someone’s requestinformation at someone’s request

Exception report: Exception report: automatically produced when automatically produced when a situation is unusual or requires management a situation is unusual or requires management actionaction

Drill-down report: Drill-down report: provides increasingly provides increasingly detailed data about a situationdetailed data about a situation

Functional Aspects of the MISFunctional Aspects of the MIS

Most organizations are structured Most organizations are structured along functional lines or areasalong functional lines or areas

The MIS can be divided along The MIS can be divided along functional lines to produce reports functional lines to produce reports tailored to individual functionstailored to individual functions

Functional Aspects of the MISFunctional Aspects of the MIS

The MIS is anThe MIS is an

integrated collection ofintegrated collection of

functional informationfunctional information

systems, each supportingsystems, each supporting

particular functional particular functional areas.areas.

Financial Management Financial Management Information SystemsInformation Systems

Financial MIS: Financial MIS: provides financial provides financial information to all financial managers information to all financial managers within an organizationwithin an organization– Profit/loss and cost systemsProfit/loss and cost systems– AuditingAuditing– Uses and management of fundsUses and management of funds

Financial Management Financial Management Information SystemsInformation Systems

Overview of a Financial MISOverview of a Financial MIS

Manufacturing Management Manufacturing Management Information SystemsInformation Systems

The manufacturing MIS subsystems and The manufacturing MIS subsystems and outputs monitor and control the flow of outputs monitor and control the flow of materials, products, and services through materials, products, and services through the organizationthe organization– Design and engineeringDesign and engineering– Production schedulingProduction scheduling– Inventory controlInventory control– MRP (material requirements planning)MRP (material requirements planning)– Process controlProcess control– Quality controlQuality control

Manufacturing Management Manufacturing Management Information SystemsInformation Systems

Overview of a Manufacturing MISOverview of a Manufacturing MIS

Marketing Management Marketing Management Information SystemsInformation Systems

Marketing MIS: Marketing MIS: supports supports managerial activities in product managerial activities in product development, distribution, pricing development, distribution, pricing decisions, promotional effectiveness, decisions, promotional effectiveness, and sales forecastingand sales forecasting– Marketing researchMarketing research– Product developmentProduct development– Promotion and advertisingPromotion and advertising– Product pricingProduct pricing

Marketing Management Marketing Management Information SystemsInformation Systems

Overview of a Marketing MISOverview of a Marketing MIS

Human Resource Management Human Resource Management Information SystemsInformation Systems

Human resource MIS: Human resource MIS: concerned with concerned with activities related to employees and activities related to employees and potential employees of an organizationpotential employees of an organization– Needs and planning assessmentsNeeds and planning assessments– RecruitingRecruiting– Training and skills developmentTraining and skills development– Scheduling and assignmentScheduling and assignment– Employee benefitsEmployee benefits– OutplacementOutplacement

Human Resource Management Human Resource Management Information SystemsInformation Systems

Overview of a Human Resource MISOverview of a Human Resource MIS

Other Management Information Other Management Information SystemsSystems

Accounting MIS: Accounting MIS: provides provides aggregate information on accounts aggregate information on accounts payable, accounts receivable, payable, accounts receivable, payroll, and many other applicationspayroll, and many other applications

Geographic information system Geographic information system (GIS): (GIS): capable of assembling, capable of assembling, storing, manipulating, and displaying storing, manipulating, and displaying geographic informationgeographic information