Ch.9 Full Powerpoint Notes Flashcards
What is Data Warehouses?
A data warehouse is a collection of information gathered from an assortment of external and operational (that is, internal) databases to facilitate reporting for decision making and business analysis.
Data warehouses often serve as the main repository of the firm’s historical data, or in other words, its corporate memory and will often serve as an archive of past firm performance.
What are the other details about data warehouses?
Data warehouses are kept separate from the operational database.
-Information in the warehouse can be stored safely for extended periods of time and data warehouses can run data queries without slowing down the performance of the company’s operational systems.
Data warehouses do work together with operational systems to provide necessary insight, particularly in the case of customer relationship management (C R M) and supply chain management (S C M) systems.
- What are customers buying?
- What did they buy in a recession?
- What did they buy after a natural disasters?
- What do they buy as their income goes up?
Data warehouses are often designed to facilitate decision making such as those often used in managerial accounting.
- Output might include variance reports, trend reports, variance analysis reports, and reports that show actual performance are compared to budgeted information.
What is business intelligence?
Business Intelligence is a computer-based technique for accumulating and analyzing data from databases and data warehouses to support managerial decision making.
How can firms gather business intelligence?
One way that firms may gather business intelligence is by use of a web crawler, which systematically browses the World Wide Web in a systematic way, collecting information.
The process of Business Intelligence
Gather information (either internal information, external information or both) from a variety of sources.
Analyze the data to discern patterns and trends from that information to gain understanding and meaning.
Make decisions, hopefully better-informed ones, based on the information gained.
What are examples of Business Intelligence?
How would Tesla (hub in Dallas) use business intelligence to find indicators of quality issues?
How would Dunkin’ Donuts use business intelligence to track information on potential franchise locations?
How would Morgan Stanley use business intelligence to price an initial public offering of stock for a firm in the Internet retail industry?
-They may use business intelligence to assess current economic and stock market conditions, assess how other Internet retail firms are performing in the stock market and assess how initial public offerings have recently performed.
What is data mining?
Data mining is one technique used to analyze data for business intelligence purposes. Data mining is a process using sophisticated statistical techniques to extract and analyze data from large databases to discern patterns and trends that were not previously known.
Data mining is often used to find patterns in stock prices to assist technical financial stock market analysts, or in commodities or currency trading.
- Data mining is used by credit card companies to find usage patterns which are indicative of fraud.
- It can also find trends in sales data which can be used in future marketing promotions.
What will data mining find?
Data mining will only find statistical relationships and some of them represent spurious correlations.
These do not have a plausible relationship in the real world
How can data mining be coupled?
Data mining must be coupled with common sense to interpret the statistical relationships found.
(There is a classic example that ice cream sales are correlated with drowning’s suggesting that as ice cream sales increase, the number of drownings also increase. That does not mean that ice cream sales cause drownings or that drownings cause more ice cream sales, but rather that warm weather caused (or had an effect on) both. )
What is digital Dashboard?
A digital dashboard is designed to track the firm process or performance indicators or metrics to monitor critical performance.
- Orders month to date, days that receivables are outstanding, budget variances, and days without an accident on the assembly line, etc. are all examples of what might be tracked continuously.
What is XBRL(Financial Reporting)?
X B R L stands for eXtensible Business Reporting Language and is based on the X M L language, a standard for Internet communication between businesses.
The X B R L database is available for various uses, including reporting on the firm’s web site, filing to regulators (S E C, I R S, etc.) and providing information to other interested parties such as financial analysts, loan officers and investors.
Additional Information on XBRL
Each interested X B R L user can either access standard reports (that is, 10-K going to the S E C or the corporate tax return going to the I R S) or specialized reports (that is, accessing only specific data for a financial analyst, etc.).
In 2009, the SEC published rule “Interactive Data to Improve Financial Reporting” which required all large and foreign accelerated filers (issuers/public companies) to format their financial statements using XBRL.
What is extensible markup language(XML)?
Similar to HTML
Users define their own tags
XML tags describe the data
What is the eXtensible Business Reporting Language?
Tags are standardized for business reporting purposes
What are some other important characteristics of XBRL and financial reporting?
Open source Extensible Required for SEC reporting Can also be used for internal information, such as journal entries Language—not a new set of GAAP Overseen by XBRL International
