DATA: Business Intelligence

 

Data is the key to information systems.  Data are the raw facts collected from various transactions and events throughout an organization.  Individually, the data represents a specific item such as a product code, customer address, invoice amount, etc.  Collectively, information systems transform the data into useful information.  Collecting the totals of all the invoices for a given month lets us know how much was sold.  Therefore, if information is derived from data, it is critical that the data be correct both in content and format.  This accuracy and data integrity will enable the organization to rely on the information to effectively manage, control, plan, and oversee what’s going on in the business.

Chapter 6 – Data: Business Intelligence – is really the foundation of information systems.  The top of p. 208 mentions five characteristics of high-quality information:  accurate, complete, consistent, timely, and unique. While it is not expected that you will become database experts after this class, it is critical that all business majors (as well as IFSM majors) understand the fundamentals of how data is stored, arranged, classified, and linked together for efficiency in providing information.  Appendix C provides information about designing databases if you want to read more.

In today’s business environment, there is tremendous power in linking databases throughout the enterprise to get the right information to the right people at the right time.  In addition, databases can provide strategic business intelligence to effectively support decision making.  However, it’s important to emphasize that ultimately it’s the ability of employees and managers to interpret the information, understand how to apply it effectively, and use their experience and knowledge to maximize the value of the information in their decision making.  Remember at the publisher’s website are self-study quizzes that can help reinforce the content – I encourage you to take advantage of these.

Many of you recommended that the UR UMUC Healthy Fitness Center collect information about its customers.  Think about how this information can be turned into business intelligence:   What classes are the most popular; what equipment is most in demand; what time of year do the most customers come to the fitness center; who are your best customers; who are infrequent customers; what is your customer retention rate; what are the demographics of your customer—this can provide good business intelligence for targeted marketing.  Marketing can be expensive, but if you can increase the return on your advertising dollars by targeting to certain groups with promotions that will particularly appeal to that group, then you can achieve a much higher return on the advertising investment.

As the owner of the UR UMUC Healthy Fitness Center, use what you have learned from Chapter 6 to answer the following questions as they relate to the Fitness Center:

1. List 3 or 4 questions about your customers that you, as manager of the Fitness Center, would want to have answers to.  Label each question as to whether it is strategic or operational/tactical in nature.
2. What data would you gather about your customers to be able to answer those questions?
3. What would be the top two business benefits you could gain from this business intelligence?
4. What would you tell the customers about why you are collecting data about them?