Chapter 11 Business Intelligence and Knowledge Management Flashcards
1
Q
Data warehouse
A
- a large database containing historical transactions and other data
- Data warehouses are useless without software tools to process the data into meaningful information
2
Q
BI
A
Business intelligence (BI): information gleaned with information analysis tools - Also called business analytics
- BI software is becoming easier to use
Intelligent interfaces accept queries in free form - BI software is integrated into Microsoft’s SQL Server database software
3
Q
Data mining
A
The process of selecting, exploring, and modeling large amounts of data
- Used to discover relationships that can support decision making
- Data-mining tools may use complex statistical analysis applications
- Data-mining queries are more complex than traditional queries
- Data-warehousing techniques and data-mining tools facilitate the prediction of future outcomes
- Data mining techniques are applied to various fields, including marketing, fraud detection, and targeted marketing to individuals
- Predicting customer behavior
- Banking: help find profitable customers, detect patterns of fraud, and predict bankruptcies
- Mobile phone services vendors: help determine factors that affect customer loyalty
- Customer loyalty programs ensure a steady flow of customer data into data warehouses
- Many industries utilize loyalty programs, e.g., frequent-flier programs and consumer clubs
- Huge amounts of data about customers amassed
- UPS’ Customer Intelligence Group
- Analyzes customer behavior
- Predicts customer defections so that a salesperson can intervene to resolve problems
- Identifying profitable customer groups
- Financial institutions dismiss high-risk customers
- Companies attempt to define narrow groups of potentially profitable customers
- Utilizing loyalty programs
- Companies develop customized email newsletters targeted to individual customers
- Targeted special offers and partner specials provided are tailored to each customer
- Inferring demographics
- Predict what customers are likely to purchase in the future
- Amazon.com
- Determines a customer’s age range based on his or her purchase history
- Attempts to determine customer’s gender
- Advertises for appropriate age groups based on the inferred customer demographics
- Infers holiday gift selections
4
Q
Objectives of data mining
A
- Sequence or path analysis: finding patterns where one event leads to another
- Classification: finding whether certain facts fall into predefined groups
- Clustering: finding groups of related facts not previously known
- Forecasting: discovering patterns that can lead to reasonable predictions
5
Q
Identifying profitable customer groups
A
- Financial institutions dismiss high-risk customers
- Companies attempt to define narrow groups of potentially profitable customers
6
Q
Utilizing loyalty programs
A
- Companies develop customized email newsletters targeted to individual customers
- Targeted special offers and
7
Q
nferring demographics
A
- Predict what customers are likely to purchase in the future
- Amazon.com
- Determines a customer’s age range based on his or her purchase history
- Attempts to determine customer’s gender
- Advertises for appropriate age groups based on the inferred customer demographics
- Infers holiday gift selections
- Amazon.com
8
Q
OLAP
A
Online analytical processing (OLAP): a type of application used to exploit data warehouses
- Provides extremely fast response times
- Allows a user to view multiple combinations of two dimensions by rotating virtual “cubes” of information
- Application composes tables “on the fly” based on the desired relationships
- Can use relational or dimensional databases designed for OLAP applications
- OLAP applications are usually installed on a special server
- OLAP applications are faster than relational applications
- increasingly used by corporations to gain efficiencies
- Office Depot used OLAP on a data warehouse to determine cross-selling strategies
- Ben & Jerry’s tracks the popularity of ice cream flavors
9
Q
Drilling down
A
the process of starting with broad information and then retrieving more specific information as numbers or percentages
10
Q
Dimensional database
A
data is organized into tables showing information summaries
- Also called multidimensional databases
11
Q
More Customer Intelligence
A
- A major effort of business is collecting business intelligence about customers
- Data-mining and OLAP software are often integrated into CRM systems
- Web has become popular for transactions, making data collection easy
- Targeted marketing is more effective than mass marketing
- Clickstream software: tracks and stores data about every visit to a website
- Data from customer activity on a website may not provide a full picture
- Third-party companies, e.g., DoubleClick and Engage Software, may be hired to study consumer activity
- These companies compile billions of consumer clickstreams to create behavioral models
- Can determine consumers’ interests
- Capture where, what, when, and how often web pages are visited; ads clicked; etc.
- Drugstore.com: a Web-based drugstore
- Wanted to reach more customers
- Razorfish, Inc., to perform customer profiling
- Razorfish compiles anonymous information about customers continuously, and also collected and analyzed data from Drugstore.com
- Information used by Drugstore.com to develop a marketing strategy to reach new customers
12
Q
Clickstream software
A
tracks and stores data about every visit to a website
13
Q
Dashboard
A
an interface between BI tools and the user
- Resembles a car dashboard
- Contains visual images to quickly represent specific business metrics of interest to management
- Helps management monitor revenue and sales, monitor inventory levels, and pinpoint trends and changes over time
- It is important to compare captured real data to benchmark or historical values
- KPIs
14
Q
Key performance indicators (KPIs)
A
a business’ strategic initiatives evaluated to determine the costs, savings, and benefits to be derived from their implementation
15
Q
Knowledge management (KM)
A
gathering, organizing, sharing, analyzing, and disseminating knowledge to improve an organization’s performance
- focuses on knowing where to find information about the subject
- Storage costs continue to decrease, making it cost effective to store more information
- The challenge is to develop tools that can quickly find the most relevant information for solving problems
16
Q
purposes of KM
A
- Transfer individual knowledge into databases
- Filter and separate the most relevant knowledge
- Organize knowledge to provide easy access to it, or to push it to employees based on needs
17
Q
Knowledge workers
A
research, prepare, and provide information
- There is much overlap in the work they do
18
Q
Capturing and Sorting Organizational Knowledge
A
Money can be saved by collecting and organizing knowledge gained by workers
- Avoid having workers solve the same problem that has already been solved by others
- The biggest challenge for employees is how to find answers to specific questions
- Some software tools can help
- Bank of Montreal implemented application software providing information to its corporate credit card managers and sales force
- Replaced multiple reports with only a few dashboards
- Provides purchase volume and number of transactions over a series of months by region/city
19
Q
To support KM, organizations should require
A
- Workers to create reports of findings
- Reports about sessions with clients
20
Q
Employee Knowledge Networks
A
a tool that facilitates knowledge sharing through intranets
- In addition to building knowledge bases, some tools direct employees to other employees who have the required expertise
- Such experts can provide non-recorded expertise
- No need to waste money hiring experts in every department
- Learning from past mistakes can save money
- Tacit Systems’ ActiveNet tool
- AskMe’s software detects and captures keywords from e-mail and documents created by employees
- Creates a knowledge base with names of employees and their interests
- Allows free-form search queries on Web
- A search returns the names of employees who have created documents, e-mail, or presentations on the subject
21
Q
Tacit Systems’ ActiveNet tool
A
- Continually processes business communications (e-mail, documents, etc.) to build a profile of each employee’s topics, expertise, and interests
- Profiles are accessible by other employees, but the private information used to create the profiles is not accessible to others
- Helps ensure uninhibited brainstorming and communication
22
Q
Knowledge from the Web
A
- Consumers post opinions of products on web at various locations, such as:
- On the vendor’s site
- At product evaluation sites such as epinions.com
- In blogs
- Distilling consumer opinions
- Could aid a company’s market research, e.g., learning about their own products and those of their competitors
- Some companies have developed software to search for this information
- Factiva: a software tool that gathers online information from over 10,000 sources
- Collects information from newspapers, journals, market data, and newswires
- Screens all new information for information specified by a subscribing organization
- Helps an organization know what others say about their products and services
23
Q
Factiva
A
a software tool that gathers online information from over 10,000 sources
- Collects information from newspapers, journals, market data, and newswires
- Screens all new information for information specified by a subscribing organization
- Helps an organization know what others say about their products and services
24
Q
Autocategorization
A
or automatic taxonomy:
- automates classification of data into categories for future retrieval
- Used by companies to manage data
- Used by most search engines
- Constantly improved to yield more precise and faster results
- U.S. Robotics (USR) wanted to reduce its customer support labor
- A survey showed that most clients visited their website before calling support personnel
- USR purchased autocategorization software
- Accuracy and response was improved, allowing a higher number of support issues to be resolved by the web visit
25
Q
Summary
A
- Business intelligence (BI) is any information about organization, its customers, or its suppliers that can help firms make decisions
- Data mining is the process of selecting, exploring, and modeling large amounts of data to discover previously unknown relationships
- Data mining is useful for predicting customer behavior and detecting fraud
- Online analytical processing (OLAP) puts data into two-dimensional tables
- OLAP either uses dimensional databases or calculates desired tables on the fly
- Drilling down means moving from a broad view to a specific view of information
- Dashboards interface with BI software tools to provide quick information such as business metrics
- Knowledge management involves gathering, organizing, sharing, analyzing, and disseminating knowledge
- The main challenge of knowledge management is identifying and classifying useful information from unstructured sources
- Most unstructured knowledge is textual
- Employee knowledge networks are software tools to help employees find other employees with specific expertise
- Autocategorization is the automatic classification of information
26
Q
The main challenge of knowledge management
A
is identifying and classifying useful information from unstructured sources
