LEARNING OUTCOMES After studying this chapter, you should Know and distinguish the concepts of data, information, and intelligence Understand the four characteristics that describe data Know the purpose of research in assisting business operations Know what a decision support system is and does Recognize the major categories of databases © 2010 South-Western/Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part.

Information, Data, and Intelligence Facts or recorded measures of certain phenomena (things or events). Information Data formatted (structured) to support decision making or define the relationship between two facts. Market intelligence The subset of data and information that actually has some explanatory power enabling effective decisions to be made. So there is more data than information, and more information than intelligence. © 2010 South-Western/Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part.

EXHIBIT 2.1 Data, Information, Intelligence Inventory systems use the data to create information. The information tells managers what items need to be stocked. The information also generates and can even place orders for more products to be trucked to the store. Products purchased are recorded by the scanner forming data. Analysts analyze the data statistically and write research reports addressing important questions such as: What types of trends exist in customer purchases, and are there regional differences? Where should new stores be located? © 2010 South-Western/Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part.

Characteristics of Valuable Information Relevance Reflects how pertinent these particular facts are to the situation at hand. Quality Degree to which data represent the true situation. Timeliness Data are current enough to still be relevant. Information Completeness Having the right amount of information. © 2010 South-Western/Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part.

Knowledge Management Knowledge Knowledge Management A blend of previous experience, insight, and data that forms organizational memory. Knowledge Management The process of creating an inclusive, comprehensive, easily accessible organizational memory, which is often called the organization’s intellectual capital. © 2010 South-Western/Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part.

Global Information Systems An organized collection of computer hardware, communication equipment, software, data, and personnel. Designed to capture, store, update, manipulate, analyze, and immediately display information about worldwide business activities. © 2010 South-Western/Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part.

Functions of Business Research Foundational—answers basic questions. What business should we be in? Testing—addresses things like new product concepts or promotional ideas. How effective will they be? Issues—examines how specific issues impact the firm, such as organizational structure. Performance—which metrics are critical in real-time management and what insights can be gained from “what-if” analyses of policy changes? © 2010 South-Western/Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part.

Decision Support Systems (DSS) Helps decision makers confront problems through direct interaction with computerized databases and analytical software programs. Stores data and transforms them into organized information that is easily accessible to managers. A customer relationship management (CRM) system is the part of the DSS that addresses exchanges between the firm and its customers. © 2010 South-Western/Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part.

EXHIBIT 2.2 Decision Support System © 2010 South-Western/Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part.

Databases and Data Warehousing A collection of raw data arranged logically and organized in a form that can be stored and processed by a computer. Data warehousing The process allowing important day-to-day operational data to be stored and organized for simplified access. Data warehouse The multitiered computer storehouse of current and historical data. © 2010 South-Western/Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part.

Input Management Input Major Sources of Input All numerical, text, voice, and image data entered into the decision support system. Major Sources of Input Internal records Proprietary business research Salesperson input Behavioral tracking Outside vendors and external distributors © 2010 South-Western/Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part.

EXHIBIT 2.3 Major sources of Input for Decision Support Systems © 2010 South-Western/Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part.

Internal Records Contain data that may become useful information for managers. Accounting reports of sales and inventory figures Costs, orders, shipments, inventory, sales, and other aspects of regular operations Customer profiles © 2010 South-Western/Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part.

Proprietary Business Research Studies specific company problems. Emphasizes the company’s gathering of new data. Is not conducted regularly or continuously. © 2010 South-Western/Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part.

Salesperson Input Sales representatives’ reports: Can alert managers to changes in competitors’ prices and new product offerings. May involve the types of complaints salespeople are hearing from customers. As trends become evident, this data may become business intelligence. © 2010 South-Western/Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part.

Behavioral Tracking Modern technology provides new ways of tracking human behavior. Global positioning satellite (GPS) systems “Click-through” sequences Scanner data Single-source data—a system’s ability to gather several types of interrelated data. Type of purchase Use of a sales promotion Advertising frequency data © 2010 South-Western/Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part.

Outside Vendors and External Distributors Market information as their products. e.g., ACNielsen Company provides television program ratings, audience counts, and information about the demographic viewer groups. Data specialists record and store certain business information. © 2010 South-Western/Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part.

Computerized Data Archives Data Wholesalers Companies that put together consortia of data sources into packages that are offered to municipal, corporate, and university libraries for a fee. Wilson Business Center Hoovers PROQUEST INFOTRAC DIALOG (Dialog Information Services, Inc.) LEXIS-NEXIS, Dow Jones News Retrieval Services © 2010 South-Western/Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part.

EXHIBIT 2.4 Vendors of Information Services and Electronic Indexing © 2010 South-Western/Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part.