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41126-piy-ch11-01.pd - CHAPTER 11 The Data Asset Databases Business Intelligence and Competitive Advantage 1 INTRODUCTION LEARNING OBJECTIVES After

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Business Intelligence (BI) Systems that use data created by other systems to provide reporting and analysis for organizational decision making. Analytics A term describing the extensive use of data, statistical and quantitative analysis, explanatory and predictive models, and fact-based management to drive decisions and actions. CHAPTER 11 The Data Asset: Databases, Business Intelligence, and Competitive Advantage 1. INTRODUCTION LEARNING OBJECTIVES After studying this section you should: 1. Understand how increasingly standardized data, access to third party datasets, cheap, fast computing and easier-to-use software are collectively enabling a new age of decision making. 2. Be familiar with some of the enterprises that have benefitted from data-driven, fact-based de- cision making. The planet is awash in data. Cash registers ring up transactions worldwide. Web browsers leave a trail of cookie crumbs nearly everywhere they go. And with RFID, inventory can literally announce its pres- ence so that firms can precisely journal every hop their products make along the value chain: “I’m ar- riving in the warehouse”, “I’m on the store shelf”, “I’m leaving out the front door”. A study by Gartner Research claims that the amount of data on corporate hard drives doubles every six months [1] , while IDC states that the collective number of those bits already exceeds the num- ber of stars in the universe [2] . Wal-Mart alone boasts a data volume well over 125 times as large as the entire print collection of the U.S. Library of Congress [3] . And with this flood of data comes a tidal wave of opportunity. Increasingly standardized corporate data, and access to rich, third party datasets; all leveraged by cheap, fast computing and easier-to-use software; are collectively enabling a new age of data-driven, fact-based decision making. You’re less likely to hear old-school terms like decision support systems used to describe what’s going on here. The phrase of the day is business intelligence ( BI ), a catchall term combining aspects of reporting, data exploration and ad-hoc queries, and sophisticated data modeling and analysis. Aside Business Intelli- gence in the new managerial lexicon is the phrase analytics , a term describing the extensive use of data, statistical and quantitative analysis, explanatory and predictive models, and fact-based manage- ment to drive decisions and actions [4] . The benefits of all this data and number crunching are very real, indeed. Data leverage lies at the center of competitive advantage we’ve studied in the Zara, Netflix, and Google cases. Data mastery has helped vault Wal-Mart to the top of the Fortune 500 list. It helped Harrah’s Casino Hotels grow to be twice as profitable as similarly-sized Caesar’s, and rich enough to acquire this rival. And data helped Capital One find valuable customers that competitors were ignoring, delivering ten-year financial per- formance a full 10 times greater than the S&P 500. Data-driven decision making is even credited with
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This note was uploaded on 02/02/2012 for the course BMGT 301 taught by Professor Wang during the Spring '08 term at Maryland.

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41126-piy-ch11-01.pd - CHAPTER 11 The Data Asset Databases Business Intelligence and Competitive Advantage 1 INTRODUCTION LEARNING OBJECTIVES After

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