MODULE 2

DATA AND KNOWLEDGE MANAGEMENT

Dr Nikhilesh Joshi
Importance of Data Organization
• Confidential customer information
• Intellectual property
• Financial transactions
• Social media posts
• Organizations possess massive amounts of data that are
critical to their success.
• To benefit from these data, they need to manage them
effectively.
• This type of management, however, comes at a huge
cost
Importance of Data Organization
• Organizations store data in databases. Data and
knowledge management are vital to modern
organizations

• The structure and content of your organization’s

database depend on how users define your business
activities
Importance of Data Organization
• When database developers in the firm’s MIS group
build a database, they use a tool called entity-
relationship (ER) modeling.
• This tool creates a model of how users view a business
activity.
• When you understand how to create and interpret an
ER model, then you can evaluate whether the
developers have captured your business activities
correctly.
Knowledge Management System
• Knowledge is a vital asset as well. Successful managers
have always valued and utilized intellectual assets.
• Knowledge management (KM) is a process that helps
organizations manipulate important knowledge that
comprises part of the organization’s memory, usually
in an unstructured format.
• For an organization to be successful, knowledge, as a
form of capital, must exist in a format that can be
exchanged among persons. In addition, it must be able
to grow.
Knowledge Management System
• Knowledge is information that is contextual, relevant,
and useful. Simply put, knowledge is information in
action. Intellectual capital
• The distinction between explicit knowledge and tacit
knowledge.
Explicit Knowledge
• Explicit knowledge deals with more objective, rational,
and technical knowledge.
• In an organization, explicit knowledge consists of the
policies, procedural guides, reports, products,
strategies, goals, core competencies, and IT
infrastructure of the enterprise.
• Explicit knowledge is the knowledge that has been
codified (documented) in a form that can be distributed
to others or transformed into a process or a strategy.
Tacit Knowledge
• Tacit knowledge is the cumulative store of subjective
or experiential learning.
• In an organization, tacit knowledge consists of an
organization’s experiences, insights, expertise, know-
how, trade secrets, skill sets, understanding, and
learning.
• Tacit knowledge is generally imprecise and costly to
transfer. It is also highly personal. Finally, because it is
unstructured, it is difficult to formalize or codify
Knowledge Management System
• Knowledge management systems (KMSs) refer to the
use of modern information technologies—the Internet,
intranets, extranets, databases—to systematize, enhance,
and expedite intrafirm and interfirm knowledge
management.
• KMSs are intended to help an organization cope with
• Turnover
• Rapid change
• Downsizing by making the expertise of the organization’s
human capital widely accessible. IT’s About Business
Knowledge Management System
• A functioning KMS follows a cycle that consists of six steps
• The reason the system is cyclical is that knowledge is
dynamically refined over time
Knowledge Management System
• The cycle works as follows:
1. Create knowledge. Knowledge is created as people
determine new ways of doing things or develop know-
how. Sometimes external knowledge is brought in.
2. Capture knowledge. New knowledge must be
identified as valuable and be represented in a
reasonable way.
3. Refine knowledge. New knowledge must be placed
in context so that it is actionable. This is where tacit
qualities (human insights) must be captured along
with explicit facts.
Knowledge Management System
4. Store knowledge. Useful knowledge must then be
stored in a reasonable format in a knowledge
repository so that other people in the organization can
access it.
5. Manage knowledge. Like a library, the knowledge
must be kept current. It must be reviewed regularly to
verify that it is relevant and accurate.
6. Disseminate knowledge. Knowledge must be made
available in a useful format to anyone in the
organization who needs it, anywhere and anytime.
Business Analytics
• Business analytics (BA) is the process of developing
actionable decisions or recommendations for actions
based on insights generated from historical data.
• Business analytics examines data with a
• variety of tools and techniques,
• formulates descriptive, predictive, and prescriptive
models
• and communicates these results to organizational
decision makers.
Business Analytics
• Business analytics can answer questions such as:
• What happened,
• how many,
• how often,
• where the problem is, what actions are needed,
• why is this happening,
• what will happen if these trends continue,
• what will happen next, what is the best (or worst) that
can happen, and
• what actions should the organization take to achieve
various successful business outcomes?
Business Intelligence
• Business intelligence (BI) has been defined as a broad
category of applications, technologies, and processes
for
• gathering,
• storing,
• accessing,
• and analyzing data to help business users make better
decisions.
Decision Making (Managers)
• Management is a process by which an organization achieves
its goals through the use of resources (people, money,
materials, and information).
• These resources are considered to be inputs.
• Achieving the organization’s goals is the output of the
process.
• Managers oversee this process in an attempt to optimize it.
• A manager’s success often is measured by the ratio between
the inputs and outputs for which he or she is responsible.
• This ratio is an indication of the organization’s productivity.
Decision Making (Managers)
• A decision refers to a choice among two or more
alternatives that individuals and groups make.
Decisions are diverse and are made continuously

• Managers do many things, depending on their

position in the organization, the type and size of the
organization, the organization’s policies and culture,
and the personalities of the managers themselves.
Decision Making (Managers)
• All managers perform three basic roles
• Interpersonal roles: Figurehead, leader, liaison
• Informational roles: Monitor, disseminator,
spokesperson, analyser
• Decisional roles: Entrepreneur, disturbance handler,
resource allocator, negotiator
Why Manager need IT Support
• Information is vital for each phase and activity in the
decision-making process.
• Even when information is available, however, decision
making is difficult due to the following trends:
• The number of alternatives is constantly increasing,
due to
• innovations in technology,
• improved communications,
• the development of global markets, and
• the use of the Internet and e-business.
Why Manager need IT Support
• A key to good decision making is to explore and
compare many relevant alternatives.
• Most decisions must be made under time pressure.
• It often is not possible to manually process information
fast enough to be effective.
• Due to increased uncertainty in the decision
environment, decisions are becoming more complex.
• It is usually necessary to conduct a sophisticated
analysis in order to make a good decision.
Why Manager need IT Support
• To better understand business analytics, various types
of decisions can be placed along two major dimensions:
problem structure and the nature of the decision
Decision Support Framework
BA Tools
• A variety of BA tools for analyzing data are available.
• Excel,
• Multidimensional analysis (also called Online
Analytical Processing (OLAP)),
• data mining, and
• decision-support systems.
Multidimensional Analysis or OLAP
• OLAP involves “slicing and dicing” data stored in a
dimensional format, drilling down in the data to
greater detail, and aggregating the data
Data Mining
• Data mining refers to the process of searching for valuable
business information in a large database, data warehouse, or
data mart.
• Data mining can perform two basic operations: (1)
predicting trends and behaviors and (2) identifying
previously unknown patterns.
• the first operation , data mining automates the process of
finding predictive information in large databases.
• Questions that traditionally required extensive hands-on
analysis now can be answered directly and quickly from the
data
Data Mining
• Data mining can also identify previously hidden
patterns in a single step.
• One significant predictive analytics operation is
detecting fraudulent credit card transactions.
• Predicting sales, preventing theft and fraud, and
determining correct inventory levels and distribution
schedules among outlets
Decision Support System
• Decision support systems (DSSs) combine models and
data to analyze semistructured problems and some
unstructured problems that involve extensive user
involvement.
• Models are simplified representations, or abstractions,
of reality.
• Decision support systems enable business managers
and analysts to access data interactively, to manipulate
these data, and to conduct appropriate analyses. .
BA Models
• Organizations must analyze huge amounts of raw data
in order to make sense out of them.
• This overall process is known as data reduction.
• Data reduction is the conversion of raw data into a
smaller amount of more useful information.
• Descriptive,
• predictive, and
• prescriptive analytics are essentially steps in data
reduction.
Descriptive Analytics
• Descriptive analytics are the first step in data reduction.
• Industry analysts estimate that the majority of business
analytics are descriptive.
• Descriptive analytics summarize what has happened
in the past and allow decision makers to learn from
past behaviors.
• Common examples of descriptive analytics are reports
that provide historical insights regarding an
organization’s production, financials, operations, sales,
finance, inventory, and customers.
Predictive Analytics
• Predictive analytics are the next step in data
reduction.
• Predictive analytics utilize a variety of analytics
techniques and tools to examine recent and historical
data in order to detect patterns and predict future
outcomes and trends.
• Predictive analytics provide estimates about the
likelihood of a future outcome.
Predictive Analytics
• The purpose of predictive analytics is not to tell
decision makers what will happen in the future.
• Predictive analytics can only forecast what might
happen in the future, because predictive analytics are
based on probabilities. .
Perspective Analytics
• Prescriptive analytics go beyond descriptive and
predictive models by recommending one or more
courses of action and showing the likely outcome of
each decision.
• Predictive analytics does not predict one possible
future, but rather multiple future outcomes based on
the decision maker’s actions.
• Prescriptive analytics attempt to quantify the effect
of future decisions in order to advise on possible
outcomes before the decisions are actually made.
Predictive Analytics
• The purpose of predictive analytics is not to tell
decision makers what will happen in the future.
• Predictive analytics can only forecast what might
happen in the future, because predictive analytics are
based on probabilities. .