Chapter-6
Founda ons of Business Intelligence: Databases and Informa on
Management
Learning Objec ves
By the end of this lecture, students will be able to:
1. Explain what databases are and how they are used in business intelligence.
2. Describe how database management systems (DBMS) organize and manage data.
3. Understand the key tools and technologies for managing and analyzing business data.
4. Discuss data governance, data quality, and data-driven decision-making.
5. Explore how big data, data warehouses, and data mining support business intelligence.
1. The Role of Data in the Modern Business Environment
a. Data and Informa on
Data: Raw facts (e.g., sales figures, customer names, transac on dates).
Informa on: Data that has been organized and processed to be meaningful and useful.
Knowledge: Insights derived from informa on that guide decision-making.
b. Business Intelligence (BI): A set of techniques, processes, and technologies used to transform
raw data into meaningful informa on for business analysis and decision-making.
Purpose: To support be er strategic, tac cal, and opera onal decisions.
Example: Analyzing customer purchasing trends to forecast demand.
2. The Database Approach to Data Management
a. Tradi onal File Environment
Data stored in separate files for different applica ons.
Problems:
o Data redundancy
o Data inconsistency
o Program–data dependency
o Lack of data sharing
o Poor data security
b. Database Environment
Database: A collec on of related data organized to serve mul ple applica ons
efficiently.
Database Management System (DBMS): So ware that enables users to create, store,
maintain, and access databases.
c. Advantages of DBMS
Minimal data redundancy
Consistent and accurate data
Data independence
Improved data sharing
Enhanced data security and integrity
3. Components of a Database Management System (DBMS)
a. Key Elements
Data Defini on Language (DDL): Defines database structure (schema, fields,
rela onships).
Data Manipula on Language (DML): Used to query and update data (e.g., SQL).
Data Dic onary: Centralized repository that describes data elements and rela onships.
b. Popular DBMS So ware
Oracle Database
Microso SQL Server
MySQL
IBM DB2
PostgreSQL
4. Designing Databases for Business
a. Rela onal Database Model
Tables (Rela ons): Two-dimensional structures with rows and columns.
o Row (Record): A single instance of an en ty.
o Column (Field): An a ribute of the en ty.
Primary Key: A unique iden fier for each record.
Foreign Key: A field linking one table to another.
b. Example:
Customer_ID Name City Order_ID
C001 Rahim Uddin Dhaka O1001
→ Customer_ID = Primary Key; Order_ID = Foreign Key linking to “Orders” table.
c. Normaliza on
Process of organizing data to reduce redundancy and improve data integrity.
1NF → 2NF → 3NF: Each stage removes further anomalies.
5. Tools and Technologies for Accessing Database Informa on
a. Structured Query Language (SQL)
Standardized language to retrieve and manipulate data.
o Example:
o SELECT Name, City FROM Customers WHERE City = 'Dhaka';
b. Data Defini on and Data Manipula on Tools
Used to create, modify, and query database structures and data.
6. Data Warehouses and Data Marts
a. Data Warehouse
Defini on: A large, centralized repository of data collected from various sources for
analysis and repor ng.
Characteris cs:
o Subject-oriented
o Integrated
o Time-variant
o Non-vola le
b. Data Mart
A smaller, specialized version of a data warehouse focused on a par cular business area
(e.g., sales, finance).
c. ETL Process
Extract → Transform → Load: Process of preparing data for storage in a warehouse.
7. Big Data and Business Intelligence
a. Big Data Characteris cs (3 Vs)
1. Volume: Massive amounts of data generated daily.
2. Velocity: Speed at which data is produced and processed.
3. Variety: Different formats—structured, semi-structured, and unstructured.
b. Tools for Big Data Management
Hadoop, Spark, NoSQL databases (MongoDB, Cassandra).
c. Business Applica ons
Predic ve analy cs
Customer sen ment analysis
Fraud detec on
Real- me decision support
8. Data Mining
a. Defini on: The process of analyzing large datasets to discover pa erns, rela onships, and
insights.
b. Common Techniques:
Classifica on: Grouping data based on predefined labels.
Clustering: Iden fying natural groupings in data.
Associa on: Discovering correla ons (e.g., market basket analysis).
Predic on: Using pa erns to forecast future outcomes.
9. Data Governance, Data Quality, and Ethical Issues
a. Data Governance
Framework for managing data availability, usability, integrity, and security.
Ensures compliance with regula ons and internal policies.
b. Data Quality Management
Key dimensions: Accuracy, completeness, consistency, meliness, and validity.
Poor data quality → bad decisions.
c. Ethical and Privacy Concerns
Data protec on, user consent, and responsible data use.
Compliance with laws (e.g., GDPR, Bangladesh Data Protec on Policy).
10. Business Intelligence (BI) Pla orms and Tools
a. BI Components
Data warehouses
Data mining tools
OLAP (Online Analy cal Processing)
Dashboards and visualiza on tools (e.g., Power BI, Tableau)
b. OLAP (Online Analy cal Processing)
Enables mul dimensional analysis of data.
Example: Viewing sales data by region, me, and product simultaneously.
