Foundations of Business Intelligence: Databases and Information Management │ Case Study │ BBA Notes │ MIS │ 3rd Semester │ TU │ Digital Firm

Foundations of Business Intelligence: Databases and Information Management




Management Decision Problems


1. Emerson Process Management, a global supplier of measurement, analytical, and monitoring instruments and services based in Austin, Texas, had a new data warehouse designed for analyzing customer activity to improve service and marketing that was full of inaccurate and redundant data. The data in the warehouse came from numerous transaction processing systems in Europe, Asia, and other locations around the world. The team that designed the warehouse had assumed that sales groups in all these areas would enter customer names and addresses the same way, regardless of their location. In fact, cultural differences combined with complications from absorbing companies that Emerson had acquired led to multiple ways of entering quotes, billing, shipping, and other data. Assess the potential business impact of these data quality problems. What decisions have to be made and steps taken to reach a solution?


--> A data warehouse is a collection of multiple heterogeneous data sources organized under a unified schema at a single site to facilitate management decision-making. The data originate in many core operational transaction systems, such as systems for sales, customer accounts, and manufacturing, and may include data from Web site transactions.

The data warehouse consolidates and standardizes information from different operational databases so that the information can be used across the enterprise for management analysis and decision making.


Emerson Process Management’s data quality problems are as follows:

  • A new data warehouse designed for analyzing customer activity to improve service and marketing that was full of inaccurate and redundant data.

  • The data in the warehouse came from numerous transaction processing systems in Europe, Asia, and other locations around the world.

  • The designer team of the warehouse had assumed that sales groups in all these areas would enter customer names and addresses the same way, regardless of their location.

  • Cultural differences combined with complications from absorbing companies that Emerson had acquired led to multiple ways of entering quotes, billing, shipping, and other data.


The potential business impact of these data quality problems are as follows:

  1. Financial Impacts: Increased operating costs, decreased revenues, reduction or delays in cash flow, increased penalties, fines, and other charges.

  2. Confidence and Satisfaction Based Impacts: Customer, employee, or supplier as well as decreased organizational trust, low confidence in forecasting, inconsistent operational and management reporting, and delayed or improper decisions.

  3. Productivity Impacts: Increased workloads, decreased output, increased processing time, and decreased end-product quality.

  4. Risk and Compliance Impacts: Associated with credit assessment, investment risk, and competitive risk, reduction on capital investment and development, fraud, etc.


The decisions that have to be made and steps are taken to reach a solution are as follows:

  •  Department feels it is responsible for the problem.

  • It requires cross-functional cooperation.

  • It requires the organization to recognize that it has significant problems.

  • It requires discipline.

  • It is perceived to be extremely manpower-intensive.

  • Must have a regular evaluation of the performance of new technology.

  • Conduct maintenance function of warehousing software.


Also, they can use Online Analytical Processing (OLAP), which supports multidimensional data analysis that enables the users to view the same data in different ways using multiple dimensions.





2. Your industrial supply company wants to create a data warehouse where management can obtain a single corporate-wide view of critical sales information to identify best-selling products in specific geographic areas, key customers, and sales trends. Your sales and product information is stored in several different systems: a divisional sales system running on a UNIX server and a corporate sales system running on an IBM mainframe. You would like to create a single standard format that consolidates this data from both systems. The following format has been proposed.

Management Decision Problems │ Case Study

The following are sample files from the two systems that would supply the data for the data warehouse:

CORPORATE SALES SYSTEM

Management Decision Problems │ Case Study

MECHANICAL PARTS DIVISION SALES SYSTEM

Management Decision Problems │ Case Study



A) What business problems are created by not having these data in a single standard format?


--> Industrial supply company scenario:

  • The company wants to create a data warehouse where management can obtain a single corporate-wide view of critical sales information to identify best-selling products in specific geographic areas, key customers, and sales trends.

  • The sales and product information are stored in both a divisional sales system running on a UNIX server and a corporate sales system running on an IBM mainframe.

  • The desire is to create a single standard format that consolidates this data from both systems.


The business problems that are created by not having these data in a single standard format are as follows:

  • It will be difficult to identify key customers.

  • A company can’t distribute the optimal level of products in an individual location.

  • They can’t focus on a market niche.

  • They can’t evaluate sales trends and fluctuate on demand and supply.

  • It will be difficult to specify products on the local market.



B) How easy would it be to create a database with a single standard format that could store the data from both systems? Identify the problems that would have to be addressed.


--> It will be a lot easier to work in a database with a single standard format that could store the data of the two systems containing different products.

The product should be defined under the different categories which makes it easier for the employees to search particular data under a particular heading.


Some of the problems that would be addressed are:

  • There is much data that does not fall under any categories that have to be given a separate heading that captures more space.

  • Sometimes the system is overloaded with the data which is stored monthly.



C) Should the problems be solved by database specialists or general business managers? Explain.


--> The problems which are faced in the above situations is not a severe problem which requires any teamwork or any superficial officer, it can be solved through the specialist of that area or sector and the business managers.

But now, it depends on the problem which is faced as it could be technical or problems related to the management.


So, the technical problem could be solved by the Data specialist as he/she would be having a greater knowledge of the problem instead of the manager who is mostly having knowledge regarding the management field as they can handle the workforce working in any sector or area.



D) Who should have the authority to finalize a single company-wide format for this information in the data warehouse?


--> many people have the authority to finalize the single company-wide format but most of the time there is a discussion or meeting which is held to discuss the advantages and disadvantages of the format and the result which comes out of the discussion applies to the working system as it is the outcome of the great minds working together.

So, mainly the power is with the CEOs of the company but for the sake of safety, there is a discussion that is necessary to be performed.


-- 𓐴𓐴𓐴 --



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Extracted From:

Laudon, K. C., & Laudon, J. P. (2012). Management Information Systems: Managing the Digital Firm (Twelfth). Pearson.



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