Data mining, data warehousing, and OLAP in strategic information management

role, contributions, and drawbacks of the various business intelligence tools (data mining, data warehousing, OLAP, etc.) to a program of strategic information management

The Role, Contributions, and Drawbacks of the Various Business Intelligence Tools to a Program of Strategic Information Management

Business intelligence is becoming very important for companies today. They know that they must work smarter instead of harder if they want to beat the competition and move forward. To continue to grow, businesses have to use all of the tools at their disposal, and these include data mining, data warehousing, and online analytical processing, or OLAP. All of these and more make up the strategic information management programs that most businesses have, but there are contributions and drawbacks to each one of them. It is important to show this and to take a look at what they are so that the individuals who need to use them in their businesses understand them and so businesses can figure out which ones they need most. They may not be able to implement them all at once due to cost constraints and other factors, so they may need to choose which one to work on first.

If they have to pick only one, they need to know for sure what they are getting into and which one they want to use. They need to know which one will work to their advantage in the easiest way possible, and which one will make the most sense. The only way that they can do that is to know about the role of each one of these business intelligence tools as well as the drawbacks and the contributions. If they are caught unaware they may not make the best choice for their business, and that could be disastrous. Strategic information management has to address the entire organization, because there is more to information than just the data that is stored. So much can be done with it, but only if it is addressed correctly.

Data Mining

Strategic information management is so very vital to the businesses of today because the global environment has given them so much more to do. If they do not learn the right ways to manage the information that they have now and that they will be gaining in the future, it could jeopardize their entire business. With data mining, its primary role is to pull out information that the company has already collected but that it does not realize that it has collected. In other words, there may be many variables and relationships between those variables that are already stored in their databases, but those things do not come out easily. By data mining, a company can find those hidden variables and bring them to light so that they can use them in their strategic management of the information needed to market their products and run their company effectively.

There are, of course, both drawbacks and contributions to be seen with data mining. It can certainly bring a lot to a company in the form of important information that they need to know and that they already possess, but that they might think that they do not actually have. These contributions can be many and various depending on how much data has been collected and how it is mined. However, the main drawback of data mining is that it can quickly become overwhelming in the sense that there is so much data and a lot of relationships that can be pulled from it. Most of those relationships, though, are not actually needed by the company and will not do anything to improve the company's position with competitors and customers. It is easy to get mired down in a flood of information and not be sure which is important and significant and which is not. That can lead to serious problems and poor decision making, so data mining should only be one of the tools used to help manage information and plan company strategy.

Online Analytical Processing

Online analytical processing (OLAP) is an approach that provides answers to multi-dimensional analytic queries much more rapidly and accurately than other types of processes. That is the main role that it plays in strategic information management, because companies need to have quick answers to many of the questions that they have. OLAP is part of business intelligence for almost all larger businesses, and it is generally used for business reporting and forecasting, as well as for budgeting. There are many things that OLAP can do, and that works out to a lot of contributions for the company that uses it. Not all companies do, and some of them are not large enough for it to be necessary, but many companies find that they can address complicated and important issues much more quickly if they work with OLAP and use it for many of their needs. There are also several different types of OLAP system, including multidimensional, relational, and hybrid (MOLAP, ROLAP, and HOLAP). Each one of these has different properties, as well as different drawbacks and different contributions to offer to each company that chooses to use them.

Knowing that, it is up to the company that will be using the OLAP system to determine which one of the different ones would be better to use. The MOLAP system is better for things like account codes, time periods, and locations. ROLAP is a relational database, and HOLAP is a bit of an enigma, because there are no specifics about what constitutes a hybrid. It is usually good for both specialized and relational storage applications. There are problems with all of these, though, because there are things that they cannot do, depending on what a company wants and needs from them. While HOLAP may be the best of the choices for its versatility, each company will have to decide what will work best for them.

Conclusion

When it comes to strategic information management, there are many options that a company has. Data mining, data warehousing, and the various OLAP options are only some of the tools that can be used, but they are three of the most important - if they are used correctly. Because there are several options with OLAP it is very versatile and most companies can find a way to make it work for them so that they can quickly get the answers that they are looking for and help to keep their company moving forward. The other two business intelligence tools, data mining and data warehousing, are also very important, but like any of the other tools there are contributions that they offer and drawbacks that they have. The key to using them all effectively is getting a good understanding of what they can bring to an organization and what they might take away or cause difficulties with so that a company that is considering using any or all of them can make the right decision.

The strategic management of information is something that all companies must work with and be aware of, so it is not something that a company can afford to neglect. Learning about the options is the first step toward ensuring that a company is on the right track and making the best choices for continued growth and development. Without that growth a company will stagnate, and with the economy having trouble already it can make it that much worse for companies that are not on the right track. By using data mining to ensure that they are making the most of the data that they have and the relationships that can be made from it, using data warehousing to ensure that each person in each department can get access to the data that they need, and using OLAP to ensure that questions that they might have are answered, any company can be on the right track. Using all of the tools in the business intelligence arsenal is the best way to see the growth and development that a company is looking for in a changing global society.