2 THE NATURE AND SOURCES OF DATA Then the decision-maker must be able to apply analysis tools (online analytical processing

-- 5.2 THE NATURE AND SOURCES OF DATA Then the decision-maker must be able to apply analysis tools (online analytical processing

In order to understand a situation, a decision-maker needs data, information, and knowledge. These must be integrated and organized in a manner that makes them useful.

(OLAP), data mining, etc.) so that the data, information, and knowledge can be utilized to full benefit. These analysis tools fall under the general heading of business intelligence (BI) and business analytics (BA) (see Chapters 3 and 4). New tools allow decision-makers and analysts to readily identify relationships among data items that enable understanding and provide a competitive advantage. Forexample, a customer-relationship (resource) management (CRM) system allows managers to better understand their customers. They can then determine a likely candidate for a particular product or service at a specific price (see Chapter 8). Marketing efforts are improved and sales are maximized. All enterprise information systems (e.g., CRM, executive information systems, content-management systems, revenue management systems, enterprise resource planning/enterprise resource management systems, supply chain management systems, knowledge management systems) utilize database management systems, data warehouses, OLAP, and data mining as their foundation (see Chapters 8 and 9). These business intelligence/business analytic (and Web intelligence/Web analytic) tools enable the modem enterprise to compete successfully. In the right hands, these tools provide great decision-makers with great capabilities. For example, see Case Application 5.2, which indicates how a firm developed and then utilized databases in an extremely competitive manner.

PART II DECISION SUPPORT SYSTEMS

The Opening Vignette illustrates what can go wrong in the extreme when you do not gather data to track the activities of individuals and organizations that impact your organization (in a business environment, these are customers, potential customers and the competition). The critical issue for the U.S. Department of Homeland Security is to gather and analyze data from disparate sources. These data must be integrated in a data warehouse and analyzed automatically via data-mining tools or by analysts using OLAP tools. Of course, abuses can occur in the process of collecting and utilizing such a massive amount of data (see DSS in Focus 5.1).

The impact of tracking data and then exploiting them for competitive advantage can be enormous. Entire industries, such as travel, banking, and all successful e-commerce ventures, rely totally on their data and information content to flourish, Experian Automotive has developed a business opportunity from modern database, extraction and integration tools (see DSS in Action 5.2).

Songini (2002) provides an excellent description of databases, data, information, metadata, OLAp, repository, and data mining. Major database. vendors include IBM, Oracle, Informix, Microsoft, and Sybase. Database vendors are reviewed on a regular basis by the trade press. For example, see Whiting (2000) and the "Annual Product Review" issue of DM Review (www.dmreview.com) every July.

All decision-support systems use data, information, and/or knowledge. These three terms are sometimes used interchangeably and may have several definitions. A common way of looking at them is as follows:

 Data. Items about things, events, activities, and transactions are recorded, classified, and stored but are not organized to convey anyspecific meaning. Data items can be numeric, alphanumeric, figures, sounds, or images.

 Information. Data that have been organized in a manner that gives them meaning for the recipient. They confirm something the recipient knows, or may have