2170715 – Data Mining &

Business Intelligence

Unit-1
Overview and concepts
Data Warehousing and
Business Intelligence
Prof. Naimish R. Vadodariya
8866215253
[email protected]
 Outline
 Why Reporting & Analyzing Data?
 Introduction to Business Intelligence
 Introduction to Data Warehousing
 Features of Data Warehousing
 Introduction to Data marts
 Types of Data Marts
 Meta Data

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 Why Reporting & Analyzing Data?
 The amount of data stored in databases is growing exponentially &
databases are now measured in gigabytes(GBs) and terabytes(TBs).
 However row data does not provide useful information.
 In today’s highly competitive business environment, companies need
to turn these terabytes of raw data into some useful information.
 The general methods of analysis/reporting can be broadly classified
into two categories: non-parametric analysis & parametric analysis
 Example
• Managers will generally be more interested in actual data and non-parametric
analysis results, while engineers will be more concerned with parametric
analysis.

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 What is Business Intelligence?
 BI technologies provide historical, current and predictive views of
business operations.
 Common functions of business intelligence technologies include
reporting, online analytical processing, analytics, data mining,
process mining, business performance management, text mining,
predictive analytics and prescriptive analytics.
 BI technologies can handle large amounts of structured and
sometimes unstructured data to help business & also identify,
develop new strategic business opportunities.
 Identifying new opportunities and implementing an effective
strategy based on insights can provide businesses with a
competitive market advantage and long-term stability.
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 Business Intelligence (Cont..)
 Business intelligence (BI) make up the strategies and technologies
used by enterprises for the data analysis of business information.
 BI tools access and analyze data sets and present analytical
findings in reports, summaries, dashboards, graphs, charts and
maps to provide users with detailed intelligence about the state
of the business.
 Typical BI infrastructure components are as follows:
• Software solution for gathering, cleansing, integrating, analyzing and
sharing data.
 It produces analysis and provides believable information to help
making effective and high quality business decisions.

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 Business Intelligence (Cont..)
 The most common kinds of business intelligence systems are:
• MIS - Management Information Systems
• CRM - Customer Relationship Management
• EIS - Executive Information Systems
• DSS - Decision Support Systems
• GIS - Geographic Information Systems
• OLAP - Online Analytical Processing

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 Introduction to Data Warehouse
 Collections of databases that work together are called data
warehouses.
 This makes it possible to integrate data from multiple databases
& it is used to help individuals and organizations make better
decisions.
 A database consists of one or more files that need to be stored on
a computer.
 In large organizations, databases are typically not stored on the
individual computers of employees but in a central system
(server).

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 Data Warehouse (Cont..)
 A server is a computer system that provides a service over a network.
The server is often located in a specific place with controlled access,
so only authorized person can get physical access for it.
 In a typical setting, the database files reside on the server, but it can
be accessed from many different computers in the organization.
 As the number and complexity of databases grows, we start referring
to them together as a data warehouse.
 The ultimate goal of a database is not just to store data, but to help
businesses make decisions based on that data.
 A data warehouse supports this goal by providing an architecture and
tools to systematically organize and understand data from multiple
databases.

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 Data Warehouse (Cont..)
 According to William H. Inmon, a leading architect in the
construction of data warehouse systems, “A data warehouse is a
subject-oriented, integrated, time-variant, and nonvolatile
collection of data in support of management’s decision making
process”.
 Features of Data Warehousing
• Subject-oriented
• Integrated
• Time-variant
• Nonvolatile

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 Features of Data Warehouse
 Subject-oriented:
• A data warehouse is organized around major subjects, such as customer,
supplier, product, and sales.
• Rather than concentrating on the day-to-day operations and transaction
processing of an organization, a data warehouse focuses on the modeling
and analysis of data for decision makers.
• Data warehouses typically provide a simple and concise view around
particular subject issues by excluding data that are not useful in the
decision support process.

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 Features of Data Warehouse (Cont..)
 Integrated:
• A data warehouse is usually constructed by integrating multiple
heterogeneous sources, such as relational databases, flat files, and on-line
transaction records.
• Data cleaning and data integration techniques are applied to ensure
consistency in naming conventions, encoding structures, attribute
measures, and so on.
 Time-variant:
• Data are stored to provide information from a historical perspective (e.g., the
past 5–10 years).
• Every key structure in the data warehouse contains, either implicitly or
explicitly, an element of time.

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 Features of Data Warehouse (Cont..)
 Nonvolatile:
• A data warehouse is always a physically separate store of data transformed from
the application data found in the operational environment.
• Due to this separation, a data warehouse does not require transaction
processing, recovery, and concurrency control mechanisms.
• It usually requires only two operations in data accessing: initial loading of data
and access of data.

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 Data Warehouse Design Process
 A data warehouse can be built using a top-down approach, a bottom-up
approach, or a combination of both.
 Top Down Approach
• The top-down approach starts with the overall design and planning.
• It is useful in cases where the technology is mature and well known, and where the
business problems that must be solved are clear and well understood.
 Bottom up Approach
• The bottom-up approach starts with experiments and prototypes.
• This is useful in the early stage of business modeling and technology development.
• It allows an organization to move forward at considerably less expense and to evaluate
the benefits of the technology before making significant commitments.
 Combined Approach
• In the combined approach, an organization can exploit the planned and strategic nature of
the top-down approach while retaining the rapid implementation and opportunistic
application of the bottom-up approach.

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 Types of Data Warehouse
 The three main types of data warehouses are:
• Enterprise Data Warehouse
• Operational Data Store
• Data Mart

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 Data Warehouse Types (Cont..)
 Enterprise Data Warehouse:
• Enterprise Data Warehouse is a centralized warehouse, which provides decision
support service across the enterprise.
• It offers a unified approach to organizing and representing data.
• It also provides the ability to classify data according to the subject and give access
according to those divisions.
 Operational Data Store:
• Operational Data Store, also called ODS, is data store required when neither data
warehouse nor OLTP systems support organizations reporting needs.
• It is widely preferred for routine activities like storing records..
• In ODS, Data warehouse is refreshed in real time.
 Data Mart:
• A Data Mart is a subset of the data warehouse.
• It specially designed for specific segments like sales, finance, sales, or finance.
• In an independent data mart, data can collect directly from sources.

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 Introduction to Data Marts
 A data mart is a simple form of a data warehouse that is focused
on a single subject (or functional area), such as Sales or Finance or
Marketing.
 Data marts are often built and controlled by a single department
within an organization, given their single-subject focus, data
marts usually draw data from only a few sources.
 The sources could be internal operational systems, a central data
warehouse, or external data.

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 Introduction to Data Marts (Cont..)
 A data mart is a repository of data that is designed to serve a
particular community of knowledge workers.
 The difference between a data warehouse and a data mart can be
confusing because the two terms are sometimes used incorrectly
as synonyms.
 A data warehouse is a central repository for all an organization's
data.
 The goal of a data mart, however, is to meet the particular
demands of a specific group of users within the organization, such
as human resource management (HRM).
 Generally, an organization's data marts are subsets of the
organization's data warehouse.
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 Reasons for Creating a Data Marts
 Easy access to frequently needed data
 Creates collective view by a group of users
 Improves end-user response time
 Ease of creation
 Lower cost than implementing a full data warehouse
 Potential users are more clearly defined than in a full data
warehouse
 Contains only business essential data and is less cluttered

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 Data Warehouse v/s Data Mart
 Data warehouse:
• Holds multiple subject areas
• Holds very detailed information
• Works to integrate all data sources
• Size (typical) 100 GB-TB+
• Implementation Time : Months to Years
 Data mart:
• Often holds only one subject area- for example, Finance, or Sales
• May hold more summarized data
• Concentrates on integrating information from a given subject area or set of
source systems
• Size (typical) < 100GB 
• Implementation Time : Months
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 Types of Data Marts
 There are three kinds of Data-Marts (DMs), which are as follows:
1) Dependent DM: Created from a data warehouse to a separate physical
data-store. (build over data warehouse physically)
2) Independent DM: Created from operational systems and have separate
physical data-store.
3) Logical or Hybrid DM: Exists as a subset of data warehouse. (build over
data warehouse logically)

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 1) Dependent Data Marts
 A dependent data mart allows you to unite your organization's
data in one data warehouse.
 This gives you the usual advantages of centralization. 

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 2) Independent Data Marts
 An independent data mart is created without the use of a central
data warehouse.
 This could be desirable for smaller groups within an organization.

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 3) Hybrid Data Mart
 A hybrid data mart allows you to combine input from sources
other than a data warehouse.
 This could be useful for many situations, especially when you need
ad hoc integration, such as after a new group or product is added
to the organization. 

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 Meta data
 Metadata are data about data.
 When meta data is used in a data warehouse, that defines
warehouse objects.
 Metadata are created for the data names and definitions of the
given warehouse.
 Additional metadata are created and captured for time stamping
any extracted data, the source of the extracted data, and missing
fields that have been added by data cleaning or integration
processes.

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 Metadata – Example
 To Describe Meta Data of a Book Store:
• Name of Book
• Summary of the Book
• The Date of publication
• High level description of what it contains
• How you can find the book
• Author of the book
• Whether the book is available OR not
• The information helps you to:
• Search for the book
• Access the book
• Understand the book before you access OR buy it.

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