Chapter 3

Data and
knowledge management

Mustafa Ally
University of Southern Queensland
 Chapter outline

3.1 Managing data

3.2 The database approach
3.3 Database management systems
3.4 Data warehouses and data marts
3.5 Knowledge management
 Learning objectives

1. Discuss ways that common challenges in managing data

can be addressed using data governance.
2. Explain how to interpret relationships depicted in an
entity-relationship diagram.
3. Discuss the advantages and disadvantages of relational
databases.
4. Explain the elements necessary to successfully
implement and maintain data warehouses.
5. Describe the benefits and challenges of implementing
knowledge management systems in organisations.
 Introduction

• Opening Case: Loyalty New Zealand – reaping the big

data rewards
• The amount of digital data increases every year.
• Data provides information, creating knowledge that
is used in decision making.
• How does IT contribute to the large amount of data?
 3.1 Managing data

• High quality data are:

– Accurate
– Complete
– Timely
– Consistent
– Accessible
– Relevant
– Concise
• Explain and give examples of each of the quality data
dimensions.

Source: Media Bakery

 The difficulties of managing data

• Amount of data is increasing exponentially

• Data are scattered throughout organisations and
collected by many individuals using various methods
and devices
• Data come from many sources
• Data degrade over time (outdated data)
• Data are subject to data rot (outdated, destroyed
storage media)
 The difficulties of managing data cont.

• Data security, quality, and integrity are critical, yet

easily jeopardised
• Inconsistent, conflicting data due to non-integrated
information systems
• Government regulations (Australia’s Privacy Act
1988)
• Companies are drowning in unstructured data
 Data governance

• Data governance
– An approach to managing information across an
entire organisation
• Master data management
– A strategy for data governance
– A process that spans all of an organisation’s
business processes and applications
– Allows companies to store, maintain, exchange,
and synchronise a consistent, accurate, and timely
 Data governance cont.

– “single version of the truth” for the company’s

core master data
– Master data: A set of core data that covers a
complete enterprise information system
 3.2 The database approach

• 1950s–1970s: File management environment

• 1970s–present: Database management approach
• Databases minimise the following problems:
– Data redundancy: The same data are stored in
many places
– Data isolation: Applications cannot access data
associated with other applications
– Data inconsistency: Various copies of the data do
not agree
 3.2 The database approach cont.

• And help maximise

– Data security: Keeping the organisation’s data safe
from theft, modification, and/or destruction
– Data integrity: Data must meet constraints and be
reliable
– Data independence: Applications and data are
independent of one another
 Database management systems

• Database management system (DBMS): Specific type of

software for creating, storing, organising, and accessing
data from a database

Figure 3.1
 The data hierarchy

• Digital data are organised in a hierarchy from the

smallest to the largest
• Figure 3.2 Hierarchy of data for a computer-based file
 Designing the database

• Data model: A diagram that represents the entities in

the database and their relationships
• Entity-relationship (ER) modeling
– Entity
• A person, place, thing, or event about which
information is maintained
• Entity classes: Groups of entities of a certain
type (group of records)
• Entity instance: The representation of a
 Designing the database cont.

• particular entity (a record)

– Attribute
• A particular characteristic or quality of a particular
entity
• Primary key (or identifier): A field that uniquely
identifies a record
• Secondary keys: Other fields that have some identifying
information (e.g., major, state)
• Foreign key: Established relationships between tables
– Relationship
• Types: One-to-one, One-to-many, Many-to-many
• Minimum and maximum cardinality
 ER diagram

Figure 3.3

Figure 3.4
 3.3 Database management systems

• Database management system (DBMS)

– A set of programs that provides users with tools to
add, delete, access, modify, and analyse data
stored in one location
• Relational database
– The most popular database architecture
– Widely used by organisational employees
– Examples: Microsoft Access and Oracle
 Relational database model

• Data represented as two-dimensional tables with

columns and rows

Figure 3.5
 Query languages

• Query languages are used to request information from a

database.
• Structured query language (SQL)
– The most popular query language
– Allows users to perform complicated searches using
relatively simple statements or key words
• SELECT (specifies a desired attribute)
FROM (specifies the table to be used)
WHERE (specifies conditions to apply in the query)
• Query by example (QBE)
– Allows users to fill out a grid or template to construct
a sample or description of the needed data
 Data dictionary and normalisation

• Data dictionary
– Defines the format necessary to enter the data
into the database
– Creates standard definitions for all attributes
– Provides organisational data resource inventory
for effective data management
• Normalisation
– A process of improving the database design
structure by putting it into its most streamlined
 Data dictionary and normalisation cont.

– form
– When data are normalised, attributes in the table
depend only on the primary key
– Streamlines complex groupings of data
– Minimises redundant data
– Maximises data integrity
– Provides best processing performance
 3.4 Data warehouses and data marts

• Data warehouse
– A repository of historical data organised by subject
to support decision makers in the organisation
• Data mart
– A low-cost, scaled-down version of a data
warehouse designed for the end-user needs in a
strategic business unit (SBU) or a department
 Characteristics of data warehouse

• Organised by business dimension or subject

• Use Online analytical processing (OLAP)
– Involves the analysis of accumulated data by end
users
– Not the same as Online transaction processing
(OLTP) where data from business transactions are
processed online as soon as they occur
 Characteristics of data warehouse cont.

• Integrated
– Collects data from multiple systems that are
integrated around subjects
• Time variant
– Contains historical data used to detect deviations,
trends, and long-term relationships
• Nonvolatile
– Only IT professionals, not users, can change or update
the data
• Multidimensional structure
– Unlike two-dimensional relational databases
 A generic data warehouse environment

• Source systems
– Provide data to the warehouse or mart
• Data integration (ETL process)
– Utilise IT to Extract data from source systems,
Transform it, and Load it into a warehouse or mart
• Storing the data
– Different architectures are available
• Metadata (data about the data)
– Needed by both IT professionals and end users
 A generic data warehouse environment
cont.

• Data quality
– The quality of the data in the warehouse must
meet users’ needs
• Governance
– Ensures that the systems meet organisational
needs
• Users
– Include information producers (create information
for others) and information consumers
Data warehouse framework and views

Figure 3.9
 3.5 Knowledge management

• Knowledge is information in action

– Contextual, relevant, and useful
– Also called intellectual capital or intellectual assets
• Explicit knowledge
– Objective, rational, technical knowledge that has
been documented and can be distributed or
transformed into a process or a strategy
– Examples: Policies, procedural guides, reports,
products, strategies, goals, core competencies
 3.5 Knowledge management cont.

• Tacit knowledge
– Cumulative store of subjective or experiential
learning
– Highly personal, imprecise, and costly to transfer
– Examples: Experiences, insights, expertise, know-
how, trade secrets, understanding, skill sets,
learning, and organisational culture
 Knowledge management systems

• Knowledge management (KM)

– A process that helps organisations manipulate
important knowledge that is part of the organisation’s
memory, usually in an unstructured format
• Knowledge management systems
– Use information technologies to systematise,
enhance, and expedite intrafirm and interfirm
knowledge management
– Utilise best practices as the most effective and
efficient ways of doing things
Knowledge management system cycle

Figure 3.13
 What’s in IT for me?

• Accounting
– Use databases to keep track of the transactions
and internal controls of an organisation
• Finance
– Use external databases to obtain financial data
• Marketing
– Access marketing data and transactions
– Contribute to an organisation’s knowledge base
• Production/Operations Management
 What’s in IT for me? cont.

– Use databases to perform optimisation analysis

• Human Resources Management
– Utilise databases to keep track of employee
records
– Compensate employees who contribute to
knowledge base
• MIS
– Manage databases, maintain data dictionary, and
help users access needed data and generate
reports with query tools
 Chapter summary

• This chapter focused on

– Managing data through data governance
– How to interpret relationships in an ER diagram
– The advantages and disadvantages of relational
databases
– Implementing and maintain data warehouses
– Implementing knowledge management systems