Ch. 6 Foundations of Business Intelligence: Databases and Information Management

In almost any company today the use of information technology is imperative. It seems as though the status quo today involves computerized data storage and technology. The usage of databases to improve business performance and decision making is also very common. On many levels, the performance of modern day companies depends on databases and information systems. In regards to sales, customers, suppliers, and regulators, these databases provide for an efficient organization of information. Businesses can learn many things about their associates and partners by utilizing the power of these databases. In many larger firms which provide some type of manufacturing capacity, the utilization of databases is imperative.
A company such as Wal Mart is a perfect example of how databases help facilitate success and performance. Companies such as Verizon also use databases to make decision upon what new models of phone to add to their lineup. Databases encompass concepts such as data warehouses which are storages of current and old data which may be used to make decisions. Data marts are smaller sets of data where a summarized or focused portion of the organization’s data is kept for certain users. Both internal and external data sources incorporate in company’s databases.
Business intelligence is a set of tools for consolidating, analyzing, and providing access to vast amounts of data to help users make better business decisions. Firms utilize business intelligence in order to gain knowledge about customers, competitors, and markets. Online Analytical Processing supports multidimensional data analysis, enabling users to view the same data in different ways using multiple dimensions. The ability to answer issues online is needed in today’s businesses. Data mining is a concept which provides insights into corporate data that cannot be obtained with OLAP by finding hidden patterns and relationships in larger databases and inferring rules from them to predict future behavior. The concept of predictive analysis is incorporated into data mining as it uses techniques and historical data to predict outcomes of business behaviors.
I think that many companies today depend on these concepts for success. Marketing companies, clothing companies, even food retailers all need to know information about their customers, suppliers, and competitors. These databases help a company like Wal Mart be able to facilitate such a vast distribution network. It is imperative that databases continue to grow and improve so that our capabilities as companies may as well.

Sources: Management Information Systems Managing The Digital Firm, tenth edition. pgs. 238-243. Laudon, Kenneth C.