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Chapter 6 Foundations of Business Intelligence: Databases and Information Management 269

5. Why are information policy, data administration, and data quality assurance essential for managing the
firm’s data resources?
Developing a database environment requires policies and procedures for managing organizational data as
well as a good data model and database technology. A formal information policy governs the maintenance,
distribution, and use of information in the organization. In large corporations, a formal data administration
function is responsible for information policy, as well as for data planning, data dictionary development, and
monitoring data usage in the firm.
Data that are inaccurate, incomplete, or inconsistent create serious operational and financial problems for
businesses because they may create inaccuracies in product pricing, customer accounts, and inventory data,
and lead to inaccurate decisions about the actions that should be taken by the firm. Firms must take special
steps to make sure they have a high level of data quality. These include using enterprise-wide data standards,
databases designed to minimize inconsistent and redundant data, data quality audits, and data cleansing soft-
ware.

Key Terms

Analytic platform, 256 Entity-relationship diagram, 253
Attribute, 241 Field, 241
Big data, 254 File, 241
Bit, 241 Foreign key, 247
Byte, 241 Hadoop, 255
Data administration, 265 In-memory computing, 256
Data cleansing, 267 Information policy, 265
Data definition, 249 Key field, 247
Data dictionary, 249 Non-relational database management systems, 247
Data governance, 266 Normalization, 252
Data inconsistency, 243 Online analytical processing (OLAP), 257
Data manipulation language, 250 Primary key, 247
Data mart, 255 Program-data dependence, 244
Data mining, 258 Record, 241
Data quality audit, 267 Referential integrity, 253
Data redundancy, 243 Relational DBMS, 246
Data warehouse, 255 Sentiment analysis, 260
Database, 244 Structured Query Language (SQL), 250
Database administration, 266 Text mining, 260
Database management system (DBMS), 244 Tuple, 247
Database server, 263 Web mining, 260
Entity, 241

Review Questions

1. What are the problems of managing data resources • Define a database and a database management
in a traditional file environment and how are they system and describe how it solves the
solved by a database management system? problems of a traditional file environment.
• List and describe each of the components in 2. What are the major capabilities of DBMS and why
the data hierarchy. is a relational DBMS so powerful?
• Define and explain the significance of entities, • Name and briefly describe the capabilities of a
attributes, and key fields. DBMS.
• List and describe the problems of the • Define a relational DBMS and explain how it
traditional file environment. organizes data.

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