Transcript kroenke_umis8e_inppt09x

Chapter 9
Business Intelligence Systems
“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?
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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?
Q8: What are the alternatives for publishing BI?
Q9: 2025?
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Q1: How Do Organizations Use Business
Intelligence (BI) Systems?
Components of Business
Intelligence System
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How Do Organizations Use BI?
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What Are Typical Uses for BI?
• Identifying changes in purchasing patterns
– Important life events cause customers to change what they buy.
• 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.
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Q2: What Are the Three Primary Activities in the BI
Process?
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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)
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Acquire Data: Extracted Order Data
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Sample Extracted Data: Part Data Table
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Joining Order Extract and Filtered Parts Tables
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Sample Orders and Parts View Data
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Creating the Customer Summary Query
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Customer Summary
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Qualifying Parts Query Design
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Publish Results: Qualifying Parts Query Results
Figure
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Publish Results: Sales History for Selected
Parts
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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
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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
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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?
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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
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Components of a Data Warehouse
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Examples of Consumer Data That Can Be
Purchased
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Possible Problems with Source Data
Curse of
dimensionality
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Data Mart Examples
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Q4: How Do Organizations Use Reporting
Applications?
• Create meaningful information from disparate
data sources
• Deliver information to user on time
• Basic operations:
1. Sorting
2. Filtering
3. Grouping
4. Calculating
5. Formatting
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RFM Analysis: Example RFM Scores
• Recently
• Frequently
• Money
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RFM Analysis Classification Scheme
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Example of Grocery Sales OLAP Report
http://dwreview.com/OLAP/
http://www.tableausoftware.com
OLAP Product Family by Store Type
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Example of Expanded Grocery Sales OLAP Report
Drill
down
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Example of Drilling Down into Expanded Grocery
Sales OLAP Report
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Q5: How Do Organizations Use Data Mining
Applications?
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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
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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
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Market-Basket Analysis
• Market-basket analysis
– Identify sales patterns in large volumes of data
– Products customers tend to buy together
– Probabilities of customer purchases
– Identify cross-selling opportunities
 Customers who bought fins also bought a mask.
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Market-Basket Example: Dive Shop
Transactions = 400
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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
groups”
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Credit
Score
Decision
Tree
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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 loan.
• Otherwise, reject loan.
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So What?
• Data storytelling
– Technique for presenting results of business intelligence
– A story is an ordered sequence of steps with a pre-defined path.
– Steps consist of interactive dashboard displays of business
intelligence results.
– Purpose of a data story is to explain that why.
o Provide context and direction, opinions, arguments about
what data reveals.
– Data story authors are business professionals like you, not
technologists.
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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
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MapReduce Processing Summary
Google search log
broken into pieces
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Google Trends on the Term Web 2.0
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Hadoop
• 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
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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
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Benefits of Knowledge Management
• Improve process quality
• Increase team strength
• Goal:
– Enable employees to use organization’s
collective knowledge
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What Are Expert Systems?
Expert systems
Rule-based
IF/THEN
Encode human
knowledge
Expert systems shells
Process IF side
of rules
Report values of
all variables
Knowledge gathered
from human experts
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Example of IF/THEN Rules
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Drawbacks of Expert Systems
1. Difficult and expensive to develop
– Labor intensive
– Ties up domain experts
2. Difficult to maintain
– Changes cause unpredictable outcomes
– Constantly need expensive changes
3. Don’t live up to expectations
– Can’t duplicate diagnostic abilities of
humans
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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
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What are CMS Application Alternatives?
• In-house custom development
– Customer support department develops in-house
database applications to track customer problems
• Off-the-shelf
– Horizontal market products (SharePoint)
– Vertical market applications
• Public search engine
– Google
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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-organization theory
– Framework for understanding this new direction in KM
– Focus shifts from knowledge and content per se to
fostering authentic relationships among creators and
users of knowledge
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Hyper-Social
KM Alternative
Media
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Resistance to Hyper-Social Knowledge Sharing
• Employees can be reluctant to exhibit their ignorance
• Employee competition
• Remedy
– Strong management endorsement
– Strong positive feedback
– “Nothing wrong with praise or cash . . . especially
cash”
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Q8: What Are the Alternatives for Publishing BI?
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What Are the Two Functions of a BI Server?
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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
psyche
• Social singularity – Machines build their own information
systems
• Will machines possess and create information for
themselves?
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Guide: Semantic Security
1. Unauthorized access to protected data and information
• Physical security
 Passwords and permissions
 Delivery system must be secure
2. Unintended release of protected information through
reports and documents
3. What, if anything, can be done to prevent what Megan
did?
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Guide: Data Mining in the Real World
• Problems:
– Dirty data
– Missing values
– Lack of knowledge at start of project
– Over fitting
– Probabilistic
– Seasonality
– High risk – unknown outcome
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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?
Q9: 2025?
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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
• DoubleClick
– IP address where content was delivered
– Records data in cookie log
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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
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FireFox Lightbeam: Display on Start Up
No Cookies
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After Visiting MSN.com
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5 Sites Visited Yields 27 Third Parties
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Sites Connected to Doubleclick
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