Unit II Notes

lOMoAR cPSD| 25228703
UNIT II Business Intelligence new
Artificial intelligence (Anna University)

UNIT II BUSINESS INTELLIGENCE 9

Data Warehouses and Data Mart - Knowledge Management – Types of Decisions - Decision
Making Process - Decision Support Systems – Business Intelligence – OLAP –, Analytic functions
Business intelligence refers to an infrastructure that collects and analyzes large amounts of data
to give organizations a clear and comprehensive picture of their data.
• The goal of a BI system is to give stakeholders a clear and customized view of their data
to empower them to make data-driven decisions
• Business intelligence combines business analytics, data mining, data visualization, data
tools and infrastructure, and best practices to help organizations make more data-driven
decisions.
• Modern BI solutions prioritize flexible self-service analysis, governed data on trusted
platforms, empowered business users, and speed to insight.
DATAWAREHOUSE AND DATAMART

Business Intelligence and Data Warehouse are two separate yet closely linked technologies. These
technologies help an organization to unearth the hidden value in their data.
Business Intelligence is a technology-driven practice that transforms raw data into actionable
intelligence. Data Warehouse acts as a middleware in Business Intelligence architecture. It extracts
the data from operational databases or external sources. It transforms it into a single format and
stores it for further analysis.
Data Warehouse as:
“A subject-oriented, integrated, time-variant and non-volatile collection of data that supports
management decision-making the process”.
A data warehouse is a type of data management system that facilitates and supports business
intelligence (BI) activities, specifically analysis. Data warehouses are primarily designed to
facilitate searches and analyses and usually contain large amounts of historical data.
Data warehouses serve as a central repository for storing and analyzing information to make
better informed decisions. An organization's data warehouse receives data from a variety of
sources, typically on a regular basis, including transactional systems, relational databases, and
other sources.
A data warehouse is a centralized storage system that allows for the storing, analyzing, and
interpreting of data in order to facilitate better decision-making. Transactional systems, relational
databases, and other sources provide data into data warehouses on a regular basis.
In business intelligence, data warehouses serve as the backbone of data storage. Business
intelligence relies on complex queries and comparing multiple sets of data to inform everything
from everyday decisions to organization-wide shifts in focus.
To facilitate this, business intelligence is comprised of three overarching activities: data

wrangling, data storage, and data analysis. Data wrangling is usually facilitated by
extract, transform, load (ETL) technologies
• Data storage: The cleaned data needs to be stored somewhere so that it can be referenced
later on for analysis. Depending on the size of an organization and how much of the
original data is considered important enough to keep, the kind of storage architecture to
employ can change greatly.
• Data analysis: The data you’ve collected don’t mean anything unless you’re able to draw
insights from them. Tools at this point of the pipeline help with further aggregation and
summarization of the data along with creation of visualizations that can demonstrate
outcomes at a glance.
Importance Of Data Warehouse In Business Intelligence

Every organization has data problems. These problems can be categorized into two groups.
Inconsistency: Every department in an enterprise produces data. But the data is dispersed
throughout the applications in a variety of formats. This makes it tough to derive valuable inputs
from that data.
Access: Since data is stored in operational silos of the Enterprise. It becomes tough to access and
use it for decision-making purposes.
By compiling, standardizing and loading the data, Data Warehouse is able to solve the problem
for Business Intelligence tools by ensuring access and providing a single version of the truth.
How Do They Do It?

The implementation partner, in association with the IT team, develops the required software and
protocols. These software and protocols transform the data to bring them into a common format.
This removes systemic errors and logically relates the information collected from other sources.
This data when finally stored by Data Warehouse can be used by Business Intelligence systems
for analysis and reporting purposes.
Let’s take the example of a consumer goods company. The company wants to install a data
warehouse to manage its sales data. The enterprise runs three production sites and sells its products
to more than a hundred countries. Area managers and local subsidiaries manage product sales.
Initially, their data was located in spreadsheets managed by a separate controlling department.
There were different formats of sales plan figures. The analysis was primarily done by using the
pivot table. These spreadsheets had to be brought together and synchronized manually through
complex queries. This raised widespread redundancy and ambiguous versions of sales figures.
Hence, to make sense of that data, the company decided to implement a Data Warehouse. The
main aim was to provide current and consolidated data to local subsidiaries and area managers.
The implementation of a data warehouse started with the replacement of spreadsheet-based
planning. It brought sales planning supported by data warehousing. Feeding the data from various
source tables with automated ETL processes made the procedure easier. This has ended the
unmanageable manual data imports.
Now the underlying data can be read directly and updated automatically. The changes in the
operational data are reflected periodically. This brings a uniform appearance with more granularity
than before. It even provides data accessibility to each individual involved in the planning process.
Data warehousing and business intelligence are terms used to describe the process of
storing all the company’s data in internal or external databases from various sources with
the focus on analysis and generating actionable insights through online BI tools.
Key Characteristics of Data Warehouse
The main characteristics of a data warehouse are as follows:
• Subject-Oriented
A data warehouse is subject-oriented since it provides topic-wise information rather than the
overall processes of a business. Such subjects may be sales, promotion, inventory, etc. For
example, if you want to analyze your company’s sales data, you need to build a data warehouse
that concentrates on sales. Such a warehouse would provide valuable information like ‘who was
your best customer last year?’ or ‘who is likely to be your best customer in the coming year?’
• Integrated
A data warehouse is developed by integrating data from varied sources into a consistent format.
The data must be stored in the warehouse in a consistent and universally acceptable manner in
terms of naming, format, and coding. This facilitates effective data analysis.
• Non-Volatile
Data once entered into a data warehouse must remain unchanged. All data is read-only. Previous
data is not erased when current data is entered. This helps you to analyze what has happened and
when.
• Time-Variant
The data stored in a data warehouse is documented with an element of time, either explicitly or
implicitly. An example of time variance in Data Warehouse is exhibited in the Primary Key,
which must have an element of time like the day, week, or month.
Types of Data Warehouse
There are three main types of data warehouse.
Enterprise Data Warehouse (EDW)

This type of warehouse serves as a key or central database that facilitates decision-support
services throughout the enterprise. The advantage to this type of warehouse is that it provides
access to cross-organizational information, offers a unified approach to data representation, and
allows running complex queries.
Operational Data Store (ODS)
This type of data warehouse refreshes in real-time. It is often preferred for routine activities like
storing employee records. It is required when data warehouse systems do not support reporting
needs of the business.
Data Mart
A data mart is a subset of a data warehouse built to maintain a particular department, region, or
business unit. Every department of a business has a central repository or data mart to store data.
The data from the data mart is stored in the ODS periodically. The ODS then sends the data to
the EDW, where it is stored and used.
Benefits of Data Warehouse
• Improved data consistency

• Better business decisions
• Easier access to enterprise data for end-users
• Better documentation of data
• Reduced computer costs and higher productivity
• Enabling end-users to ask ad-hoc queries or reports without deterring the performance of
operational systems
• Collection of related data from various sources into a place
Companies having dedicated Data Warehouse teams emerge ahead of others in key areas of
product development, pricing, marketing, production time, historical analysis, forecasting, and
customer satisfaction. Though data warehouses can be slightly expensive, they pay in the long
run.
General stages of Data Warehouse

Offline Operational Database:
In this stage, data is just copied from an operational system to another server. In this way,
loading, processing, and reporting of the copied data do not impact the operational system’s
performance.
Offline Data Warehouse:

Data in the Datawarehouse is regularly updated from the Operational Database. The data in
Datawarehouse is mapped and transformed to meet the Datawarehouse objectives.
Real time Data Warehouse:

In this stage, Data warehouses are updated whenever any transaction takes place in operational
database. For example, Airline or railway booking system.
Integrated Data Warehouse:

In this stage, Data Warehouses are updated continuously when the operational system performs a
transaction. The Datawarehouse then generates transactions which are passed back to the
operational system.
Components of Data warehouse

Four components of Data Warehouses are:
Load manager: Load manager is also called the front component. It performs with all the
operations associated with the extraction and load of data into the warehouse. These operations
include transformations to prepare the data for entering into the Data warehouse.
Warehouse Manager: Warehouse manager performs operations associated with the
management of the data in the warehouse. It performs operations like analysis of data to ensure
consistency, creation of indexes and views, generation of denormalization and aggregations,
transformation and merging of source data and archiving and baking-up data.
Query Manager: Query manager is also known as backend component. It performs all the
operation operations related to the management of user queries. The operations of this Data
warehouse components are direct queries to the appropriate tables for scheduling the execution
of queries.
End-user access tools:

This is categorized into five different groups like 1. Data Reporting 2. Query Tools 3.
Application development tools 4. EIS tools, 5. OLAP tools and data mining tools.
Data Warehouse Architecture
There are three ways you can construct a data warehouse system. These approaches are classified
by the number of tiers in the architecture. Therefore, you can have a:
• Single-tier architecture
• Two-tier architecture
• Three-tier architecture
Single-tier Data Warehouse Architecture
The single-tier architecture is not a frequently practiced approach. The main goal of having such
an architecture is to remove redundancy by minimizing the amount of data stored.
Its primary disadvantage is that it doesn’t have a component that separates analytical
and transactional processing.
Two-tier Data Warehouse Architecture
A two-tier architecture includes a staging area for all data sources, before the data warehouse
layer. By adding a staging area between the sources and the storage repository, you ensure all
data loaded into the warehouse is cleansed and in the appropriate format.
This approach has certain network limitations. Additionally, you cannot expand it to support a
larger number of users.
ETL Process in Data Warehouse

ETL is a process in Data Warehousing and it stands
for Extract, Transform and Load. It is a process in which an ETL tool extracts the data from
various data source systems, transforms it in the staging area, and then finally, loads it into the
Data Warehouse system.
Let us understand each step of the ETL process in-depth:

1. Extraction:
The first step of the ETL process is extraction. In this step, data from various source
systems is extracted which can be in various formats like relational databases, No
SQL, XML, and flat files into the staging area. It is important to extract the data
from various source systems and store it into the staging area first and not directly
into the data warehouse because the extracted data is in various formats and can be
corrupted also. Hence loading it directlyinto the data warehouse may damage it and
rollback will be much more difficult. Therefore, this is one of the most important
steps of ETL process.
2. Transformation:
The second step of the ETL process is transformation. In this step, a set of rules or
functions are applied on the extracted data to convert it into a singlestandard format.
It may involve following processes/tasks:
• Filtering – loading only certain attributes into the data warehouse.
• Cleaning – filling up the NULL values with some default values,
mapping U.S.A, United States, and America into USA, etc.
• Joining – joining multiple attributes into one.
• Splitting – splitting a single attribute into multiple attributes.
• Sorting – sorting tuples on the basis of some attribute (generallykey-
attribute).
3. Loading:
The third and final step of the ETL process is loading. In this step, the transformed
data is finally loaded into the data warehouse. Sometimes the data is updated by
loading into the data warehouse very frequently and sometimes it is done after
longer but regular intervals. The rate and period ofloading solely depends on the
requirements and varies from system to system.
ETL process can also use the pipelining concept i.e. as soon as some data is
extracted, it can transformed and during that period some new data can be extracted.
And while the transformed data is being loaded into the data warehouse, the already
extracted data can be transformed. The block diagramof the pipelining of ETL process
is shown below:
ETL Tools: Most commonly used ETL tools are Hevo, Sybase, Oracle Warehouse
builder, CloverETL, and MarkLogic.
Data Warehouses: Most commonly used Data Warehouses are Snowflake,
Redshift, BigQuery, and Firebolt.
Approaches in ETL Process
ETL stands for Extraction, Transform and Load.

These are three database functions that are incorporated into one tool to pulldata out
from one database and to put data into another database.
Big Data encompasses a wide range of enormous data that can either be structured or
unstructured. RDBMS finds it challenging to handle huge volumesof data. Also,
RDBMS is designed for steady data retention rather than rapid growth. This is where
data warehouses come in.
Data warehouse supports all types of data and can also handle the rapid growth of data.
Thus, for data analysis, data needs to be shifted from databases to data warehouses. The
working of the ETL process can be well explained with the help of the following diagram.
ETL Process
Applications of the ETL process are :

• To move data in and out of data warehouses. Databases are not suitable for big
data analytics therefore, data needs to be moved from databases to data warehouses
which is done via the ETL process.
• Data strategies are more complex than they have ever been. ETL
facilitates to transform vast quantities of data into actionable business
intelligence.
There are two approaches in ETL :
1. Top Down Approach :
The data flow in the top-down OLAP environment begins with data extractionfrom
the operational data sources. This data is loaded into the staging area and validated
and consolidated for ensuring a level of correctness and then moved to the
Operational Data Store (ODS).
The ODS stage is sometimes skipped if it is another copy of the operational
databases. Data is loaded into the Data warehouse in a parallel to avoid extracting it
from the ODS. Data is routinely extracted from the ODS and temporarily hosted in
the staging area for aggregation, summarization and then extracted and loaded into
the Data warehouse.
The need to have an ODS is determined by the business requirements. If there is a
need for detailed data in the Data warehouse then ODS must be created. Once the
Data warehouse aggregation and summarization processesare complete, the data
mart will extract the data from the Data warehouse into the staging area and perform
a new set of transformations on them. This will help organize the data in particular
structures as required by data marts.
Afterward, the data marts can be loaded with the data and the OLAP environment
becomes available to the users. The data in a data warehouse ishistorical data. A
top‐down model approach was proposed by Inmon, to create a centralized
Enterprise Data Warehouse using traditional database
modeling techniques (ER Model), where the data is stored in 3NF. The data
warehouse now acts as a data source for the new data marts.
Top Down Approach
2. Kimball Methodology (Bottom-Up Approach) :

The bottom‐up approach reverses the positions of the Datawarehouse and the Data
marts. Data marts are directly loaded with the data through the staging area. The
existence of ODS depends on business requirements. Thedata flow in the bottom-
up approach starts with the extraction of data fromoperational databases into the
staging area where it is processed and consolidated and then loaded into the ODS.
The data in the ODS is either appended to or replaced by the fresh data beingloaded.
Once the ODS is refreshed, the present data is once again extracted into the staging
area and processed. The data from data mart is pulled to the staging area aggregated,
summarized, and so on and loaded into the Data Warehouse and made available to
the end-user for analysis.
Bottom Up Approach
ETL Tools :
Some of the most commonly used ETL tools are MarkLogic, Oracle, Sybase,Hevo,
and Xplenty.
Advantages of ETL Tools :
• Easy to use.
• Load data from different targets at same time.
• Performs data transformation as per need.
• Better for complex rules and transformations.
• Inbuilt Error handling functionality.
• Based on GUI and offer visual flow.
• Save Cost and generate higher revenue.
Disadvantages of ETL Tools :
• Not suitable for near real-time data access.
• Inclined more towards batch data processing
• Difficult to keep up with changing requirements.
Three-tier Data Warehouse Architecture
The three-tier approach is the most widely used architecture for data warehouse systems.
Essentially, it consists of three tiers:
1. The bottom tier is the database of the warehouse, where the cleansed and transformed
data is loaded.
2. The middle tier is the application layer giving an abstracted view of the database. It
arranges the data to make it more suitable for analysis. This is done with an OLAP server,
implemented using the ROLAP or MOLAP model.
3. The top-tier is where the user accesses and interacts with the data. It represents the front-
end client layer. You can use reporting tools, query, analysis or data mining tools.
Data Warehouse Components
From the architectures outlined above, you notice some components overlap, while others are
unique to the number of tiers.
Below you will find some of the most important data warehouse components and their roles in
the system.
ETL Tools
ETL stands for Extract, Transform, and Load. The staging layer uses ETL tools to extract the
needed data from various formats and checks the quality before loading it into the data
warehouse.
The data coming from the data source layer can come in a variety of formats. Before merging all
the data collected from multiple sources into a single database, the system must clean and
organize the information.
The Database
The most crucial component and the heart of each architecture is the database. The warehouse is
where the data is stored and accessed.
When creating the data warehouse system, you first need to decide what kind of database you
want to use.
There are four types of databases you can choose from:
1. Relational databases (row-centered databases).

2. Analytics databases (developed to sustain and manage analytics).
3. Data warehouse applications (software for data management and hardware for storing
data offered by third-party dealers).
4. Cloud-based databases (hosted on the cloud).
Data
Once the system cleans and organizes the data, it stores it in the data warehouse. The data
warehouse represents the central repository that stores metadata, summary data, and raw data
coming from each source.
• Metadata is the information that defines the data. Its primary role is to simplify working
with data instances. It allows data analysts to classify, locate, and direct queries to the
required data.
• Summary data is generated by the warehouse manager. It updates as new data loads into
the warehouse. This component can include lightly or highly summarized data. Its main
role is to speed up query performance.
• Raw data is the actual data loading into the repository, which has not been processed.
Having the data in its raw form makes it accessible for further processing and analysis.
Access Tools
Users interact with the gathered information through different tools and technologies. They can
analyze the data, gather insight, and create reports.
Some of the tools used include:
• Reporting tools. They play a crucial role in understanding how your business is doing
and what should be done next. Reporting tools include visualizations such as graphs and
charts showing how data changes over time.
• OLAP tools. Online analytical processing tools which allow users to analyze
multidimensional data from multiple perspectives. These tools provide fast processing
and valuable analysis. They extract data from numerous relational data sets and
reorganize it into a multidimensional format.
• Data mining tools. Examine data sets to find patterns within the warehouse and the
correlation between them. Data mining also helps establish relationships when analyzing
multidimensional data.
Data Marts
Data marts allow you to have multiple groups within the system by segmenting the data in the
warehouse into categories. It partitions data, producing it for a particular user group.
For instance, you can use data marts to categorize information by departments within the
company.
A data mart is a simple form of a Data Warehouse. It is focused on a single subject. Data
Mart draws data from only a few sources. These sources may be central Data warehouse,
internal operational systems, or external data sources.

A Data Mart is an index and extraction system. It is an important subset of a data warehouse. It is
subject-oriented, and it is designed to meet the needs of a specific group of users. When
compared Data Mart vs Data Warehouse, Data marts are fast and easy to use, as they make use of
small amounts of data.
What Is a Data Warehouse Used For?

Here, are most common sectors where Data warehouse is used:
Airline:
In the Airline system, it is used for operation purpose like crew assignment, analyses of route
profitability, frequent flyer program promotions, etc.
Banking:
It is widely used in the banking sector to manage the resources available on desk effectively. Few
banks also used for the market research, performance analysis of the product and operations.
Healthcare:
Healthcare sector also used Data warehouse to strategize and predict outcomes, generate
patient’s treatment reports, share data with tie-in insurance companies, medical aid services, etc.
Public sector:
In the public sector, data warehouse is used for intelligence gathering. It helps government
agencies to maintain and analyze tax records, health policy records, for every individual.
Investment and Insurance sector:

In this sector, the warehouses are primarily used to analyze data patterns, customer trends, and to
track market movements.
Retain chain:
In retail chains, Data warehouse is widely used for distribution and marketing. It also helps to
track items, customer buying pattern, promotions and also used for determining pricing policy.
Telecommunication:
A data warehouse is used in this sector for product promotions, sales decisions and to make
distribution decisions.
Hospitality Industry:
This Industry utilizes warehouse services to design as well as estimate their advertising and
promotion campaigns where they want to target clients based on their feedback and travel
patterns.
Advantages of Data Warehouse (DWH):
• Data warehouse allows business users to quickly access critical data from some sources
all in one place.
• Data warehouse provides consistent information on various cross-functional activities. It

is also supporting ad-hoc reporting and query.
• Data Warehouse helps to integrate many sources of data to reduce stress on the
production system.
• Data warehouse helps to reduce total turnaround time for analysis and reporting.
• Restructuring and Integration make it easier for the user to use for reporting and analysis.
• Data warehouse allows users to access critical data from the number of sources in a
single place. Therefore, it saves user’s time of retrieving data from multiple sources.
• Data warehouse stores a large amount of historical data. This helps users to analyze
different time periods and trends to make future predictions.
Disadvantages of Data Warehouse:
• Not an ideal option for unstructured data.

• Creation and Implementation of Data Warehouse is surely time confusing affair.
• Data Warehouse can be outdated relatively quickly
• Difficult to make changes in data types and ranges, data source schema, indexes, and
queries.
• The data warehouse may seem easy, but actually, it is too complex for the average users.
• Despite best efforts at project management, data warehousing project scope will always
increase.
• Sometime warehouse users will develop different business rules.
• Organisations need to spend lots of their resources for training and Implementation
purpose.
The Future of Data Warehousing
• Change in Regulatory constrains may limit the ability to combine source of disparate
data. These disparate sources may include unstructured data which is difficult to store.
• As the size of the databases grows, the estimates of what constitutes a very large database
continue to grow. It is complex to build and run data warehouse systems which are
always increasing in size. The hardware and software resources are available today do not
allow to keep a large amount of data online.
• Multimedia data cannot be easily manipulated as text data, whereas textual information
can be retrieved by the relational software available today. This could be a research
subject.
Differences between Data Warehouse and Data Mart

Here is the main difference between Data Mart and Data Warehouse:
Parameter Data Warehouse Data Mart
A Data Warehouse is a large repository of data A data mart is an only subtype of a Data Ware
Definition collected from different organizations or It is designed to meet the need of a certain user
departments within a corporation. group.
Usage It helps to take a strategic decision. It helps to take tactical decisions for the busine
The main objective of Data Warehouse is to

provide an integrated environment and A data mart mostly used in a business division
Objective
coherent picture of the business at a point in department level.
time.
The designing process of Data Warehouse is

Designing The designing process of Data Mart is easy.
quite difficult.
May or may not use in a dimensional model. It is built focused on a dimensional model usin
However, it can feed dimensional models. start schema.
Data warehousing includes large area of the Data marts are easy to use, design and implem
Data Handling corporation which is why it takes a long time to
it can only handle small amounts of data.
process it.
Data warehousing is broadly focused all the

Data Mart is subject-oriented, and it is used at
Focus departments. It is possible that it can even
department level.
represent the entire company.
The data stored inside the Data Warehouse are Data Marts are built for particular user groups.
Data type
always detailed when compared with data mart. Therefore, data short and limited.
The main objective of Data Warehouse is to

provide an integrated environment and Mostly hold only one subject area- for exampl
Subject-area
coherent picture of the business at a point in Sales figure.
time.
Designed to store enterprise-wide decision Dimensional modeling and star schema design
Data storing data, not just marketing data. employed for optimizing the performance of ac
layer.
Time variance and non-volatile design are Mostly includes consolidation data structures t
Data type
strictly enforced. meet subject area’s query and reporting needs.
Transaction data regardless of grain fed directl

Data value Read-Only from the end-users standpoint.
from the Data Warehouse.
Parameter Data Warehouse Data Mart
Data mart contains data, of a specific departme

Data warehousing is more helpful as it can
Scope a company. There are maybe separate data mar
bring information from any department.
sales, finance, marketing, etc. Has limited usag
In Data Warehouse Data comes from many

Source In Data Mart data comes from very few source
sources.
The size of the Data Warehouse may range

Size The Size of Data Mart is less than 100 GB.
from 100 GB to 1 TB+.
The implementation process of Data

Implementation The implementation process of Data Mart is
Warehouse can be extended from months to
time restricted to few months.
years.
KNOWLEDGE MANAGEMENT:
Knowledge management is the conscious process of defining, structuring, retaining, and sharing
the knowledge and experience of employees within an organization.
Knowledge Management (KM) with Business Intelligence (BI) The Figure 8 illustrates the
knowledge cycle on how the Knowledge Management (KM) can help the business to improve
their processes. The figure shows how the Business Intelligence which contents information
becomes the central role in knowledge management. It has data, business context, decision,
action and the collaboration of experts.
Knowledge Management (KM) is the collection of processes that govern the creation,
dissemination, and utilization of knowledge. (KM) this is, as the word entails the power
to handle “knowledge” and right knowledge available to the right people. It is about
making sure that an organization can learn, and that it will be able to retrieve and use its
knowledge assets in current applications as they are needed
. Knowledge Management (KM) is not always about technology, but also about
understanding how the people work, brainstorming, identify groups of people who work
together and how they can share and learn from each other and in the end the
organization learning about their workers experience and about the leadership the
organization
• Kerschberg presents a conceptual model for knowledge management systems composed

of three layers (Figure 4). The first layer is marked as Knowledge Presentation, the
second – Knowledge Management, and the third one is referred to as Data Sources layer.
The Presentation layer enables the workers to communicate, collaborate and
shareknowledge. They obtain information through a defined Knowledge Portal, which
can be customized for every employee.
• The Knowledge Management layer consists of a Knowledge Repository, a process used
for acquiring, cleansing, distributing and representing knowledge and data integration
services(Kerschberg).
• Kerschberg represents the Data Warehouse within the Data Knowledge Management
(Figure4), in the segment he refers to as Knowledge Integration Services. Together with
other services, notably Data Mining, Knowledge Integration Services form a knowledge
repository which becomes available to employees in the enterprise through various
knowledge portals.
• White (2005) argues that the development of information technologies has significantly
contributed to the fact that knowledge management, through knowledge management
systems, has become a significant resource of any organisation, and business intelligence
has acquired a highly important role in knowledge management projects.
• Business intelligence applications provide the analysis of business information, producing
information that enables users to enhance and optimise business operations. Information
used in the decision-making support domain can be obtained directly from the transaction
system (Figure 5), or more frequently, information is obtainedbyprocessing data from the
Data Warehouse database. The Data Warehouse data repository is managed bythe database
management system, using languages such as SQL (Structured Query Language) for
dataaccess and manipulation White (2005).
• In his works, White (White, 2005) states that business intelligence plays a central role in
knowledge management (Figure 5). The same author also places knowledge management
in the context of business process enhancement as well. For the traditional business
intelligence system to support knowledge management, what is essential is their integrated
functioning with business process management software, planning and collaboration
software, portals, content management systems and other systems with similar purpose,
thereby enabling provision of timely information for individual management levels.
Knowledge management
Knowledge management can be separated into three main areas:
1. Accumulating knowledge
2. Storing knowledge
3. Sharing knowledge
By accumulating and storing the staff’s knowledge, companies hold onto what has made them
successful in the past. In addition, sharing this information throughout the organization informs
staff of past approaches that improve performance or better inform new strategies.
To achieve the goal of knowledge management, companies have to enable and promote a culture
of learning and development, creating an environment where employees are encouraged to share
information to better the collective workforce.
Knowledge management process
Implementing effective knowledge management requires proactive strategies and incorporating

multiple new processes.
There are four key knowledge management processes. These include:
• Knowledge gathering. This includes entering data, optical character recognition and
scanning, pulling information from various sources and searching for other information to
include.
• Knowledge storage and organization. This step in the process includes cataloging and
indexing content in a knowledge management system to find it, and placing links within this
content to provide further related information for users to digest.
• Knowledge distribution. This provides a way for users to access the information,
including FAQs, training videos, white papers and manuals.
• Knowledge use. Once information is distributed to users, they need to put it into action.
Knowledge management lifecycle:
1. Discovery
Every organization has multiple sources of knowledge, from employees to data and records.
This could be the education and skillsets staff bring to the job, the experience and unique
expertise they develop on the job, or hard drives of data that can positively affect the business
with proper analysis.
During the discovery process, organizations must identify all the available sources of knowledge,
with a particular emphasis on information that could be easily lost.
This process is simplified by a strong understanding of where and how knowledge flows around
the organization.
2. Collection
Collecting all the available knowledge and data creates the foundation from which future
processes build.
Sloppy or incorrect knowledge collection leads to decisions without a complete understanding of

the organization and its capabilities.
Companies must audit their existing staff expertise, documentation, and external knowledge
sources. A range of tools is available to help, including automated surveys, document scanning,
and metadata.
Post-implementation, many organizations redefine internal processes to make capturing

institutional knowledge a part of everyday processes. This could be through continual employee
feedback systems or more in-depth offboarding procedures.
3. Assessment
This process involves the deep analysis of the knowledge gathered in the previous two steps.
Data must be assessed and organized into a structured, searchable, and easily accessible form.
Assessment of the gathered knowledge is required to ensure it is accurate, offers value, and is up
to date.
Then teams can determine how best to share information to improve company performance and
give staff the knowledge they need to maximize performance.
Utilizing the right knowledge management system simplifies this process by allowing leadership
to organize, assess, segment, and store a comprehensive knowledge database.
4. Sharing
The whole point of knowledge management is to give staff the expertise and information they
need to do their job to the best of their ability.
Once you have built a detailed and accurate body of knowledge related to your company, you
need to plan how it will be shared.
See the “Knowledge management methods” section below for examples of how to share
information around your company.
While there are many examples of sharing information, one thing that should be universal is
creating a cultural shift towards learning and development.
Leadership must prioritize and reward knowledge sharing, creating an atmosphere where team
members are actively encouraged to both teach each other and learn from one another.
5. Application
This is the step where organizations reap the rewards of knowledge management. Discovering
and storing institutional knowledge is just the beginning.
Staff utilizing newly acquired expertise in their tasks brings a range of benefits in productivity,
accuracy, decision-making, and more innovative employees.
6. Creation
The final stage of knowledge management is to create more knowledge.
It should never be considered a one-and-done process. A single audit and rollout won’t deliver
the results you are looking for.
Knowledge management is a continual process that maximizes a company’s performance for the
expertise available to it.
Whether it is a team discovering a new, more efficient approach to a task or a better way
of capturing data related to company performance, organizations should constantly be
innovating and creating new knowledge to pass on to future employees
Types of knowledge:
There are three types of knowledge -- explicit, tacit and embedded. However, the two most
important distinctions are explicit and tacit.
• Explicit knowledge. This type of knowledge is codified -- meaning it is found in books,

files, folders, documents, databases and how-to videos -- and is most easily extracted and
handled by a knowledge management system.
• Tacit knowledge. This form of knowledge is intuitive in nature. It is based on experience
and practice and often helps in achieving long-term goals. This type of knowledge transfer is
difficult, as it lies with a single person. There is no easy way to extract it as with explicit
knowledge, leaving the knowledge-holder with the task of writing it down or creating a
video. Some examples of tacit knowledge include identifying the right moment to launch into
a sales pitch or developing leadership skills.
• Embedded knowledge. This knowledge is found in systemic processes, routines,
manuals, structures and organizational cultures. It is embedded formally through management
initiatives or informally as organizations use and apply the other two knowledge types. While
embedded knowledge can be found in explicit sources, it is not always immediately apparent
why doing something a certain way is important for a business.
DIFFERENCE BETWEEN BUSINESS INTELLIGENCE AND KNOWLEDGE
MANAGEMENT
BUSINESS INTELLIGENCE KNOWLEDGE MANAGEMENT
Explicit in nature Tacit in nature
Structured information Structured and unstructured information
Business driven methodology andproject KM organization/Leadership measures
management
Strategic and extensible technical framework Effective and Systematic processes
Business centric championship and balanced Strategy,Systems and Infrastructure
project team composition
Clear business vision Measures
Business Oriented Organizational processes,dynamic
descriptions,forecasting,analysis and learning,existing knowledge to support
decision making decision making
Both internal and external process Only internal process
Technology management and Identification,acquisition,application and
operationalization of information construction of new knowledge
No equivalent action Create new Knowledge
No equivalent action Knowledge Dispersion
Examples of knowledge management
Feedback ,Research files ,Staff retiring,Employee transfer or promotion
Benefits of knowledge management
• Reduced time to find information
• Reduced time for new staff to become competent
• Reduced operational costs
• Improved customer satisfaction

• Improved bid win/loss ratio
• Information at users' fingertips
• Standardized processes.
• Increased collaboration
Challenges to knowledge management
• Motivation
• Keeping up with technology
• Security
• Keeping information up to date
5 Key Components of Knowledge Management
1. Strategy
A knowledge management strategy is a well-documented source of direction for the company.

Essentially, it is the blueprint of the goals of the organization in terms of identification, storage,
and sharing of existing and new knowledge, which include the business challenges that need to
be solved across departments.
The knowledge management strategy should focus on identifying and addressing a knowledge
gap in the organization. For instance, if an insurance firm identifies the general insurance
division as a growth area, the other departments should learn more from this division to realize
organizational goals.
2. Process
A clear and well-defined process for identifying, storing, and sharing knowledge is a vital
component of every successful knowledge management initiative. The process of knowledge
management includes various steps, such as creating knowledge, structuring it, reviewing and
sharing it before it can be used, and applied by other teams.
The processes you set up should be designed to ensure accuracy in identifying, managing,
sharing information, especially in a secure way. The purpose of knowledge
management is counter-intuitive if the wrong information is shared or if it is shared with the
wrong person.
3. Technology
Technology is a crucial element behind the success of any knowledge management project. The
systems and software should also enable easy and secure access for authorized employees to
relevant information as and when required. Technology solutions bring together all the
components — process, people, and information — required to build an organization’s
knowledge management system.
Typically, dedicated knowledge management platforms utilize big data and document analysis to
provide business intelligence as well. These platforms are increasingly tapping into AI enablers
for more sophisticated and customizable analytics.
4. People
People include top management, team leaders who motivate their members, the core knowledge
management team who guide the implementation, and finally, employees who contribute and use
the system.
Knowledge management must be prioritized within the company. The top management needs to
lead by example and encourage and incentivize the sharing of information. Rewarding and
motivating people to regularly use the system to share their insights will go a long way in
ensuring the knowledge management program’s success.
5. Improvement
Knowledge management is not a one-time initiative. It is a dynamic exercise that has to become
a part of the company culture. It needs regular reviewing, tweaking, and improvement to meet
the goals defined in the strategy.
The company should regularly revisit its knowledge management strategy to see what is
working and what’s not. Further, knowledge management plans are intrinsically linked to the
organization’s goals and objectives. Sometimes the goals themselves change, thus making it
necessary to reevaluate the knowledge management policies and plans.
knowledge management strategy.

1. Identify your goals
2. Create a knowledge sharing policy

3. Share knowledge across the organization
4. Appoint a knowledge management implementation officer
5. Lead by example to bring a cultural shift
6. Incentivize employees
Knowledge management methods
1. Tutoring & training, communities of practice, and Q&A
These examples all involve transferring information directly from the knowledge holder to other
employees.
This could be through in-person tutoring, company-wide training sessions, online chats, and
group discussions - or a mix of these options and others.
Many companies value building a skills matrix that maps each employee’s expertise. This
simplifies finding the employee with the most experience or knowledge in a given field. In
addition, it identifies knowledge gaps within the workforce and shows areas requiring focus for
specific knowledge management methods and training.
Some examples of this type of knowledge management may not require a formalized structure.
For example, perhaps your company is having problems with a new project, which reminds you
of a previous situation. Using the company Slack, for example, you can search for similar
questions and find old threads discussing how you overcame the problem last time. Prior
expertise that you may not have thought about in years is stored and discovered in old
communications to help you right now.
Pros:
• Questions can be immediately answered
• Clarifications can be made if the material is not understood
• Brainstorming sessions can be facilitated, taking advantage of the combined power of the
group’s experience and knowledge
• In-person learning tends to be remembered more clearly
Cons:
• It can be time-consuming and take away from the tasks the knowledge holder is trying to
complete
• A system of expertise location can be time-consuming to build and maintain
• It can be challenging to document and save for future use

• Difficulty finding the right expert with good communication skills and knowledge of the
company
• You can lose the knowledge if the knowledge holder leaves the company
2. Documentations, guides, guidelines, FAQ, and tutorials
Written communications are great for storing and transferring knowledge.
With text-based knowledge management, a system to store, categorize and navigate subjects is
always available.
In many cases, metadata is a great help for this.
Pros:
• The company has an invaluable source of information of up to date information
• Easy to find and share online (when organized well)
• Can easily combine multiple people’s expertise into one packet
Cons:
• Requires a lot of time to create and keep up-to-date
• Must be appropriately managed to ensure relevant knowledge is easily found
• Requires infrastructure (internet access, etc.)
• It takes time to consume
3. Forums, intranets, and collaboration environments
These online resources spark conversation and bring many knowledge holders into the same
place.
Threads, subforums, and groups can be divided by topic, level of expertise, or any number of
other classifications.
Pros:
• Collaboration drives innovation

• Many experts can be brought together into one place, no matter their location globally
• Facilitating contact with remote teams helps teamwork and knowledge transfer
Cons:
• It can be a chaotic, noisy environment

• Knowledge is not actively being vetted as it is added to discussions
• Searching through many messages and threads for relevant answers is time-consuming
• Messages and threads might not be archived
4. Learning and development environments
Creating an environment where learning is considered an asset will continuously drive

employees to educate themselves.
Incentivizing them to take advantage of your knowledge management systems will result in
upskilled employees ready to take on leadership roles in your organization.
For this to happen, there must be structured and accessible learning and development technology
in place that employees can use.
Pros:
• Motivated employees can develop themselves at will
• Training pathways can be set out
• Wide range of resources available to produce a constant flow of fresh content
• The structure allows for easier discovery of subjects
• Authoring tools available such that internal experts can build company-specific courses
• Analytic tools are available to help find knowledge gaps inside the company
Cons:
• Requires a lot of effort to develop and maintain in house
• Readily available solutions may be too generic to add real value for your company
• Content must be created and continually updated
• Requires an influential learning culture to motivate staff to participate
5. Case studies
These in-depth studies into particular areas serve as complete guides to a subject.
Looking at the actions taken, the results they produce, and any lessons learned is extremely
valuable.
Pros:
• Allow for complete documentation and archiving of lessons learned
• Easily shareable
• Efficient for communicating complex information
Cons:
• It takes a lot of time and skill to create
• The case study may have limitations or require approval from the parties involved
• Can be too specialized to apply the knowledge broadly
• In fast-paced fields that are constantly innovating, case studies can become out of date
quickly
6. Webinars
These online seminars can be beneficial in widely disseminating ideas throughout teams,
branches, or the entire company.
Pros:
• Accessible for all interested employees to attend
• Potential for interactivity where attendees can ask questions specific to issues they are
having
• Can be recorded and reused
Cons:
• Planning, finding the right speakers, and settling on a topic is time-consuming

• Requires organization
• External experts can cost a lot
• Requires time to find answer
Decision Making Process & Types of Decisions:
Types of decisions
Decisions are part of the manager's remit. Difficult choices may have to be made for the common
good of the organisation. There are three types of decision in business:
o Strategic: Long-term, complex, made by senior managers

o Tactical: Medium-term, less complex, made by mid-level managers
o Operational: Day-to-day, simple, routine, made by junior managers
Strategic decisions
Strategic decisions comprise the highest level of organizational business decisions and are
usually less frequent and made by the organization’s executives. Yet, their impact is enormous
and far-reaching.
Some types of strategic decisions include selecting a particular market to penetrate, a company to
acquire, or whether to hire additional staff.
Decisions made at this level usually involve significant expenditure. However, they are generally
non-repetitive in nature and are taken only after careful analysis and evaluation of many
alternatives.
Tactical decisions
Tactical decisions (or semistructured decisions) occur with greater frequency (e.g., weekly or
monthly) and fall into the mid-management level. Often, they relate to the implementation of
strategic decisions.
Examples of tactical decisions include product price changes, work schedules, departmental
reorganization, and similar activities.
The impact of these types of decisions is medium regarding risk to the organization and impact
on profitability.
Operational decisions
Operational decisions (or structured decisions) usually happen frequently (e.g., daily or hourly),
relate to day-to-day operations of the enterprise, and have a lesser impact on the organization.
Operational decisions determine the day-to-day profitability of the business, how effectively it
retains customers, or how well it manages risk.
Answering a sales inquiry, approving a quotation, or calculating employee bonuses may be

examples of this decision type.
Decisions are classified as structured, semi-structured, and unstructured.
Fig. Information Requirements of Key Decision-Making Groups In A Firm
Unstructured decisions are those in which the decision maker must provide judgement,
evaluation, and insight to solve the problem.
Structured decisions, by contrast, are repetitive and routine, and they involve a definite
procedure for handling them so that they do not have to be treated each time as if they were new.
Many decisions have elements of both types of decisions and are semistructured, where only
part of the problem has a clear-cut answer provided by an accepted procedure.
In general, structured decisions are more prevalent at lower organizational levels, whereas
unstructured problems are more common at higher levels of the firms.
The Decision-Making Process
There are four different stages in decision making: intelligence, design, choice, and
implementation.
Fig. Stages In Decision Making
• Intelligence consists of discovering, and understanding the problems occurring in the

organization – why a problem exists, where, and what effects it is having on the firm.
• Design involves identifying and exploring various solutions to the problem.
• Choice consists of choosing among solution alternatives.
• Implementation involves making the chosen alternative work and continuing to monitor
how well the solution is working.
DECISION MAKING PROCESS USING BUSINESS INTELLIGENCE (BI) SYSTEM
In order to make the best decisions, companies need to use tools to decipher their data and better
understand their customers. Business Intelligence (BI) is a set of tools used by companies
to analyze data using data analytics tools, gain valuable insights, and make better and more
informed decisions using Business Intelligence reports.
Since its early days, business intelligence has been a tool for decision-making. It’s a way to
ensure that managers and executives make better decisions so that businesses can run more
effectively. These decisions can range from basic operations like deciding how much to produce
to broader strategic considerations like deciding what products to sell. However, BI tools vary
considerably in how they are designed, how they interact with other applications, and how they
are used. Ultimately, BI is about having access to the right information at the right time.
Programmed And Non-Programmed Decisions

Programmed decisions are one that relates to the matters of routine type and problems that are of
repetitive nature. These decisions are taken following the specific standard procedure for dealing
with all such problems. Programmed decisions are basically taken by management at the lower
level. Such decision involves like purchasing raw materials and spare parts, granting the leave to
an employee, etc.
On the other hand, non-programmed decisions are meant for dealing with problems of difficult
nature and which can’t be solved easily. These decisions arise out of problems that are not
routine or daily occurring. There is no standard procedure for solving such issues. Non-
programmed decisions are very crucial for an organization and are taken by upper-level
management. Decisions at a higher level may include introducing new products in the market,
setting up a new branch of business, and many more.
Routine And Strategic Decisions

Routine decisions relate to the decisions which are taken on a routine basis for the daily
functioning of the business. These decisions can be taken quickly without much evaluation,
analysis, and in-depth study. Generally, higher management delegates power to their
subordinates for taking such decisions within the policy of business.
Whereas, strategic decisions are key decisions influencing the goals, objectives, and other crucial
policy matters of the organization. These decisions require proper analysis and evaluation of
distinct alternatives as they require an investment of funds. Strategic decisions are taken by the
top and middle-level management teams. These also influence the routine decisions taken on a
daily basis and hence require utmost care before taking them.
Organizational And Personal Decisions

Organizational decisions are decisions that are taken by an individual as an executive in his
official capacity. These decisions are taken on the organization’s behalf and can be delegated to
subordinates.
Whereas, when decisions are taken by an executive in his personal capacity, not relating to the
organization then they are termed as personal decisions. Authority of taking personal decisions
cannot be delegated to subordinates.
Tactical (Policy) And Operational Decisions

Decisions that are concerned with distinct policy matters and the planning of business are called
policy decisions. These decisions have a long-term influence on the performance of an
organization. these decisions are taken by the top management team. These decisions include
decisions related to the volume of production, the channel of production, location of business
plants, etc.
Operational decisions related to daily operations and functioning of business enterprise. These
decisions make it possible to implement the plan and policies taken by managers at the top level.
Middle and low-level managers usually take these decisions.
Individual And Group Decisions

Decisions taken by a single individual in his official capacity are called individual decisions.
This decision type is more used by organizations that are smaller in size and have an autocratic
management style.
Group decisions, on the other hand, are taken collectively by the management and employees of
the business together. This group of individuals taking decisions are also termed as a standing
committee and only the pertinent matters are referred to this committee. Group decisions mainly
focus on involving a large number of individuals in their process of decision-making. Decisions
taken by the board of directors of the company came in the category of group decisions.
Major And Minor Decisions

Major and minor is another important type of classification of decisions. Major decisions relate
to key aspects of business organization and are taken by top-level managers. The decision to
buying new factory premises is a major decision.
Minor decisions are taken by peoples at lower levels in business organizations and are of less
importance. Purchase of office stationery for daily use is a minor decision that can be taken by
the office superintendent.
Managers and Decision Making In the Real World
Managerial Roles
Managers play key roles in organizations. Managerial roles are expectations of the activities that
managers should perform in an organization. These managerial roles fell into three categories:
interpersonal, informational, and decisional.
• Interpersonal Roles: managers act as leaders, attempting to motivate, counsel, andsupport

subordinates.
• Informational Roles: managers act as the nerve centers of their organizations, receiving
the most concrete, up-to-date information and redistributing it to those who need to be aware
of it.
• Decisional Roles: managers act as entrepreneurs by initiating new kinds of activities;
they handle disturbances arising in the organization; they allocate resources to staff members
who needs them; and they negotiate conflicts and mediate between conflicting groups.
Introduction to Decision Models
Decision modeling refers to the use of mathematical or scientific methods to determine an

allocation of scarce resources which improves or optimizes the performance of a system. The
terms operations research and management science are also used to refer to decision modeling
Overview of Decision Models

BUSINESS INTELLIGENCE IN DECISION SUPPORT SYSTEMS
A decision support system (DSS) is a computer-based information system that supports

business or organizational decision-making activities; typically this results in ranking, sorting, or
choosing from among alternatives. DSSs serve the management, operations, and planning levels
of an organization (usually mid and higher management) and help people make decisions about
problems that may be rapidly changing and not easily specified in advance.
There are several types of DSSs that include:

1. Communication-driven DSS which enables cooperation, supporting more than one
person working on a shared task; examples include integrated tools like Google Docs
or Microsoft Groove.
2. Document-driven DSS which manages, retrieves, and manipulates unstructured
information in a variety of electronic formats.
3. Knowledge-driven DSS provides specialized problem-solving expertise stored as facts,
rules, procedures, or in similar structures
4. Model-driven DSS emphasizes access to and manipulation of a statistical, financial,
optimization, or simulation model. Model-driven DSS use data and parameters provided by
users to assist decision makers in analyzing a situation; they are not necessarily data-intensive.
5. Data-driven DSS (or data-oriented DSS) emphasizes access to and manipulation of
a time series of internal company data and, sometimes, external data. A data-driven DSS,
which we will focus on, emphasizes access to and manipulation of a time series of internal
company data and sometimes external data. Simple file systems accessed by query and
retrieval tools provide the most elementary level of functionality. Data warehouse systems that
allow the manipulation of data by computerized tools tailored to a specific task and setting or
by more general tools and operators provide additional functionality. Data-driven DSS with
online analytical processing (OLAP) provide the highest level of functionality.
What is Business Intelligence?

Business Intelligence (BI) is a set of ideas, methodologies, processes,
architectures, and technologies that change raw data into significant and
useful data for business purpose. Business Intelligence can handle large
amounts of data to help identify and evolve new opportunities for the
business.
Business intelligence refers to an infrastructure that collects and analyzes large amounts of data to give
organizations a clear and comprehensive picture of their data. The goal of a BI system is to give
stakeholders a clear and customized view of their data to empower them to make data-driven
decisionsBusiness intelligence combines business analytics, data mining, data visualization, data tools
and infrastructure, and best practices to help organizations make more data-driven decisions. Modern BI
solutions prioritize flexible self-service analysis, governed data on trusted platforms, empowered
business users, and speed to insight.
Businesses and organizations have questions and goals. To answer these questions and track performance
against these goals, they gather the necessary data, analyze it, and determine which actions to take to
reach their goals.
On the technical side, raw data is collected from business systems. Data is processed and then stored in
data warehouses, the cloud, applications, and files. Once it’s stored, users can access the data, starting the
analysis process to answer business questions.
BI platforms also offer data visualization tools, which convert data into charts or graphs, as well as
presenting to any key stakeholders or decision-makers.
BI methods
business intelligence is an umbrella term that covers the processes and methods of collecting,
storing, and analyzing data from business operations or activities to optimize performance. All
of these things come together to create a comprehensive view of a business to help people make
better, actionable decisions. Over the past few years, business intelligence has evolved to
include more processes and activities to help improve performance. These processes include:
• Data mining: Using databases, statistics, and machine learning (ML) to uncover trends
in largedatasets
• Reporting: Sharing data analysis to stakeholders so they can draw conclusions
and makedecisions
• Performance metrics and benchmarking: Comparing current performance data to
historical data to track performance against goals, typically using customized
dashboards
• Descriptive analytics: Using preliminary data analysis to find out what happened
• Querying: Asking the data-specific questions, BI pulling the answers from the data sets
• Statistical analysis: Taking the results from descriptive analytics and further exploring
the datausing statistics such as how this trend happened and why
• Data visualization: Turning data analysis into visual representations such as charts,
graphs, and histograms to more easily consume data
• Visual analysis: Exploring data through visual storytelling to communicate insights
on the flyand stay in the flow of analysis.
• Data preparation: Compiling multiple data sources, identifying the
dimensions andmeasurements, and preparing it for data analysis
Benefits of business intelligence:
• Data clarityIncreased efficiency

• Better customer experience
• Improved employee satisfaction
• Faster analysis, intuitive dashboards
• Increased organizational efficiency
• Data-driven business decisions
• Improved customer experience
• Improved employee satisfaction
• Trusted and governed data
• Increased competitive advantage
Some key features of BI tools include:
• Intuitive to use
• Variety of dashboard and visualization options
• Smart insights
• Alerts for good and bad metrics
• Built-in artificial intelligence (AI)
• Deployment flexibility
• Integration with other platforms and applications
• Data connectivity
• Embedding in business applications
OLAP:
OLAP (online analytical processing) is a computing method that enables users to easily and
selectively extract and query data in order to analyze it from different points of view. OLAP
business intelligence queries often aid in trends analysis, financial reporting, sales forecasting,
budgeting and other planning purposes.
For example, a user can request that data be analyzed to display a spreadsheet showing all ofa
company's beach ball products sold in Florida in the month of July, compare revenue figures
with those for the same products in September and then see a comparison of other product sales
in Florida in the same time period.
How OLAP systems work

To facilitate this kind of analysis, data is collected from multiple data sources and stored
in data warehouses then cleansed and organized into data cubes. Each OLAP cube contains data
categorized by dimensions (such as customers, geographic sales region and time period)derived
by dimensional tables in the data warehouses. Dimensions are then populated by members (such
as customer names, countries and months) that are organized hierarchically. OLAP cubes are
often pre-summarized across dimensions to drastically improve query time over relational
databases.
Analysts can then perform five types of OLAP analytical operations againstthese
multidimensional databases:
• Roll-up. Also known as consolidation, or drill-up, this operation summarizes the data
along the dimension.
• Drill-down. This allows analysts to navigate deeper among the dimensions of data, for
example drilling down from "time period" to "years" and "months" to chart sales growth
for a product.
• Slice. This enables an analyst to take one level of information for display, such as
"sales in 2017."
• Dice. This allows an analyst to select data from multiple dimensions to analyze, such as
"sales of blue beach balls in Iowa in 2017."
• Pivot. Analysts can gain a new view of data by rotating the data axes of the cube.
OLAP software then locates the intersection of dimensions, such as all products sold in the
Eastern region above a certain price during a certain time period, and displays them. The result is
the "measure"; each OLAP cube has at least one to perhaps hundreds of measures,which are
derived from information stored in fact tables in the data warehouse.
OLAP begins with data accumulated from multiple sources and stored in a data warehouse. The
data is then cleansed and stored in OLAP cubes, which users run queries against.
Online Analytical Processing (OLAP) is a category of software technology thatenables

analysts and managers to inspect data from multiple databases simultaneously. The
process provides fast, intuitive, and interactive access to multidimensional data. It also
helps analysts extract a wide variety of insights.
The goal of OLAP is to pre-calculate and pre-aggregate data to make analysis faster. This pre-
aggregated and pre-calculated data is stored in an OLAP database,or OLAP cube.
An OLAP cube is a screenshot of data at a specific point in time. OLAP cubes canstore and
analyze multidimensional data in a quick but logical manner. Usually, marketers use
spreadsheets to perform two-dimensional data analysis. However,
OLAP contains multidimensional data, which is why we use OLAP cubes(or

hypercubes).
OLAP cubes are not strictly cuboids and can be different dimensions. This is just thename given
to the process of linking data from different dimensions.
How Does OLAP Work?
There are multiple steps of OLAP:
• First, data is first extracted from various data sources and formats, like textfiles and
spreadsheets. This data is then stored in the Data Warehouse.
• Next, the data is cleaned, transformed, and stored in OLAP Cubes
• Once in the OLAP cubes, information is then pre-calculated and pre-
aggregated in advance for further analysis
• Lastly, the user gets the data from the OLAP cubes by running queriesagainst
them
OLAP vs. Traditional Data Mining
Typically, data is distributed throughout multiple data sources and formats. The OLAP process
involves extracting data from the various data repositories, makingthem compatible, and moving
them to the data warehouse.
First, OLAP identifies the dimensions, measures, and attributes in this multidimensional data
model. It can also determine the relationships within each dimension. Then, the resulting data
model will be loaded onto a multidimensionalOLAP Cube.
We use four dimensions to organize the data in OLAP cubes:

1. Product: “Product” shows how data varies with each product.

2. Customer: “Customer” shows how data varies by the customer or geographicarea.
3. Channel: “Channel” shows how data varies according to each distributionchannel.
4. Time: “Time” shows how data changes over time.
Next, OLAP identifies levels of summarization within each dimension. Lastly, withdata in
OLAP cubes, analysts can build reports, visualizations, and dashboards. With these analyses,
marketers can take action to increase sales and profit.
Benefits of OLAP in Marketing
There are many benefits of using OLAP in marketing. Here are just a few:
• OLAP gives a multidimensional data representation to organize and analyzedata

• OLAP provides pre-calculated data to different data mining tools, businessmodeling
tools, performance analysis tools, and reporting tools
• Pre-aggregate values in OLAP Cubes lend to faster response times
• OLAP provides a single source of data for all end-users, which makes querieseasy to run
• The learning curve is minimal
OLAP can help with:
• Planning
• Budgeting
• Financial Modeling
• Sales Analysis
• Forecasting
• Market Research Analysis
• Customer Analysis
• Defect Analysis
• Cost Analysis
• And more
Types of OLAP systems

OLAP (online analytical processing) systems typically fall into one of three types:
Multidimensional OLAP (MOLAP) is OLAP that indexes directly into a multidimensional

database.
Relational OLAP (ROLAP) is OLAP that performs dynamic multidimensional analysis of

data stored in a relational database.
Hybrid OLAP (HOLAP) is a combination of ROLAP and MOLAP. HOLAP was developedto
combine the greater data capacity of ROLAP with the superior processing capability of MOLAP.
Advantages
The advantages of OLAP are as follows −
• Business-centred multidimensional information.
• Business-centred figuring’s.
• Dependable information and figuring’s.
• Speed-of-thought examination.
• Adaptable, self-administration detailing.
Disadvantages
The disadvantages of OLAP are as follows −
• Pre-demonstrating is an absolute necessity. As to business information, the traditional
OLAP tools don't take into consideration quick investigation without pre-demonstrating.
• Extraordinary reliance on IT.
• Helpless calculation capacity.
• Shy Interactive examination capacity.
• Slow in responding.
• Theoretical model.
• Extraordinary, expected danger.
OLAP Functions
The OLAP functions extend the syntax of the SQL analytic functions. This syntax is familiar to
SQL developers and DBAs, so you can adopt it more easily than proprietary OLAP languages
and APIs. Using the OLAP functions, you can create all standard calculated measures,
including rank, share, prior and future periods, period-to-date, parallel period, moving
aggregates, and cumulative aggregates.
The OLAP functions are grouped into these categories:
• Aggregate Functions
• Analytic Functions
• Hierarchical Functions
• Lag Functions
• OLAP DML Functions
• Rank Functions
• Share Functions
• Window Functions
Aggregate Functions
AVERAGE_R
ANK AVG
COUNT
DENSE_RA
NK MAX
MIN
RAN
K
SUM
Analytic Functions
AVERAGE_R
ANK AVG
COUNT
DENSE_RAN
K LAG
LAG_VARIA
NCE
LEAD_VARIANCE_PER
CENT MAX
MIN
RAN
K
ROW_NUMB
ER SUM
Hierarchical Functions
HIER_ANCESTO
R
HIER_CHILD_CO
UNT
HIER_DEPTH
HIER_LEVEL
HIER_ORDER
HIER_PARENT
HIER_TOP
Lag Functions
LAG
LAG_VARIA
NCE
LAG_VARIANCE_PER
CENT LEAD
LEAD_VARIANCE
LEAD_VARIANCE_PER
CENT
OLAP DML Functions
OLAP_DML_EXPRESSION
Rank Functions
AVERAGE_R
ANK
DENSE_RAN
K RANK
ROW_NUMBE
R
Share Functions
SHARE
Window Functions
AVG
COUN
T
MAX
MIN
SUM
Difference between OLAP and OLTP
Online Analytical Processing (OLAP): Online Analytical Processing consists of

a type of software tools that are used for data analysis for business decisions.OLAP
provides an environment to get insights from the database retrieved from multiple
database systems at one time. Examples – Any type of Data warehouse system is
an OLAP system. The uses of OLAP are as follows:
• Spotify analyzed songs by users to come up with a personalized
homepage of their songs and playlist.
• Netflix movie recommendation system.
Online transaction processing (OLTP): Online transaction processing
provides transaction-oriented applications in a 3-tier architecture. OLTP
administers the day-to-day transactions of an organization.
Examples: Uses of OLTP are as follows:
• ATM center is an OLTP application.
• OLTP handles the ACID properties during data transactions via the
application.
• It’s also used for Online banking, Online airline ticket booking, sending atext
message, add a book to the shopping cart.
Comparisons of OLAP vs OLTP :
Sr. OLAP (Online analytical OLTP (Online transaction

No. Category processing) processing)
It is well-known as an online
database query management It is well-known as an online
system. database modifying system.
1. Definitio
n
Consists of historical data from Consists of only of operational

various Databases. In other words, current data. In other words, the
different OLTP databases are used original data source is OLTP and
2. Data source as data sources for OLAP. its transactions.
It makes use of a standard

database management system
3. Method used It makes use of a data warehouse. (DBMS).
It is subject-oriented. Used for

Data Mining, Analytics, Decisions It is application-oriented. Used
making, etc. for business tasks.
4. Applicatio
n
In an OLAP database, tables are In an OLTP database, tables are

5. Normalize not normalized. normalized (3NF).
d

The data is used in planning,

problem-solving, and decision- The data is used to perform day-
making. to-day fundamental operations.
6. Usage of
data
It reveals a snapshot of present It provides a multi-dimensional

7. Tas business tasks. view of different business tasks.
k
It serves the purpose to extract It serves the purpose to Insert,

information for analysis and Update, and Delete information
decision-making. from the database.
8. Purpose
The size of the data is relatively

A large amount of data is stored small as the historical data is
typically in TB, PB archived. For ex MB, GB
9. Volume of
data
Relatively slow as the amount of

data involved is large. Queries Very Fast as the queries operate
may take hours. on 5% of the data.
10. Queries
The OLAP database is not often The data integrity constraint

updated. As a result, data must be maintained in an OLTP
integrity is unaffected. database.
11. Update
Backup It only need backup from time to Backup and recovery process is
12.1
and time as compared to OLTP. maintained rigorously
2 Recovery
.
13. Processin The processing of complex It is comparatively fast in

g time queries can take a lengthy time. processing because of simple and

straightforward queries.
This data is generally managed by This data is managed by clerks,

14. Types of CEO, MD, GM. managers.
users
Only read and rarely write

15. Operations operation. Both read and write operations.
With lengthy, scheduled batch

operations, data is refreshed on a The user initiates data updates,
regular basis. which are brief and quick.
16. Updates
Nature of Process that is focused on the Process that is focused on the

17.1 audience customer. market.
7
.
Database Design with a focus on the Design that is focused on the

18.1 Design subject. application.
8
.
Improves the efficiency of

19. Productivit business analysts. Enhances the user’s productivity.
y

Unit II Notes

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UNIT II Business Intelligence new

Artificial intelligence (Anna University)

UNIT II BUSINESS INTELLIGENCE 9

DATAWAREHOUSE AND DATAMART

To facilitate this, business intelligence is comprised of three overarching activities: data

Importance Of Data Warehouse In Business Intelligence

How Do They Do It?

Key Characteristics of Data Warehouse

The main characteristics of a data warehouse are as follows:

Types of Data Warehouse

There are three main types of data warehouse.

Enterprise Data Warehouse (EDW)

Operational Data Store (ODS)

Benefits of Data Warehouse

• Improved data consistency

General stages of Data Warehouse

Offline Data Warehouse:

Real time Data Warehouse:

Integrated Data Warehouse:

Components of Data warehouse

End-user access tools:

Data Warehouse Architecture

Single-tier Data Warehouse Architecture

Two-tier Data Warehouse Architecture

ETL Process in Data Warehouse

Let us understand each step of the ETL process in-depth:

ETL stands for Extraction, Transform and Load.

Applications of the ETL process are :

Top Down Approach

2. Kimball Methodology (Bottom-Up Approach) :

Three-tier Data Warehouse Architecture

Essentially, it consists of three tiers:

Data Warehouse Components

There are four types of databases you can choose from:

1. Relational databases (row-centered databases).

Some of the tools used include:

internal operational systems, or external data sources.

What Is a Data Warehouse Used For?

Investment and Insurance sector:

Advantages of Data Warehouse (DWH):

• Data warehouse provides consistent information on various cross-functional activities. It

Disadvantages of Data Warehouse:

• Not an ideal option for unstructured data.

The Future of Data Warehousing

Differences between Data Warehouse and Data Mart

Parameter Data Warehouse Data Mart

The main objective of Data Warehouse is to

The designing process of Data Warehouse is

Data warehousing is broadly focused all the

The main objective of Data Warehouse is to

Transaction data regardless of grain fed directl

Parameter Data Warehouse Data Mart

Data mart contains data, of a specific departme

In Data Warehouse Data comes from many

The size of the Data Warehouse may range

The implementation process of Data

• Kerschberg presents a conceptual model for knowledge management systems composed

Knowledge management can be separated into three main areas:

Knowledge management process

Implementing effective knowledge management requires proactive strategies and incorporating

There are four key knowledge management processes. These include:

Knowledge management lifecycle:

Sloppy or incorrect knowledge collection leads to decisions without a complete understanding of

Post-implementation, many organizations redefine internal processes to make capturing

The final stage of knowledge management is to create more knowledge.

• Explicit knowledge. This type of knowledge is codified -- meaning it is found in books,

Examples of knowledge management

Feedback ,Research files ,Staff retiring,Employee transfer or promotion

Benefits of knowledge management

• Reduced time to find information

• Reduced time for new staff to become competent