2. 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
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3. 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.
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4. 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?
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5. 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.
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6. 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.
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7. 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.
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8. 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?
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9. 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.
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10. EXHIBIT 2.2 Decision Support System
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11. 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.
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12. 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
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13. EXHIBIT 2.3 Major sources of Input for Decision Support Systems
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14. 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
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15. Proprietary Business Research
Studies specific company problems.
Emphasizes the company’s gathering of new data.
Is not conducted regularly or continuously.
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16. 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.
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17. 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
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18. 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.
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19. 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
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20. EXHIBIT 2.4 Vendors of Information Services and Electronic Indexing
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