Class Notes 38107
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CSC 127A - 002
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This 52 page Class Notes was uploaded by pauljohnson on Tuesday October 20, 2015. The Class Notes belongs to 38107 at University of Arizona taught by William Neumann in Fall 2015. Since its upload, it has received 100 views. For similar materials see MIS 111 in Computer Science and Engineering at University of Arizona.
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Date Created: 10/20/15
Business and Professional Ethics Legal vs Ethical Issues Legal Issues 0 codi ed for a segment of society 0 sometimes have a de nite answer 0 determination is made by others not you 0 Ethical Issues 0 Determined by a person society or group 0 sometimes have a de nitive answer 0 you determine your course of action 0 Being the law doesn t make it quotrightquot 0 Being quotrightquot doesn t make it legal Ethics in Business and Eller Recognizing ethical situations 0 gut check transparency test ethical drift 0 case study David Myers MCIWorldcom quotwho am iquot ethical dilemmas 0 Who are we Organization ethics consequences 0 testing for integrity in business 0 ETegrity Recognizing Ethical Situations Gut check 0 GI Track Serotonin 0 Ethical Drift o collective impacts of small unethical decisions Transparency Test David Meyer Former Controller WorldCom 0 Ethical Drift quotI still dont know that one point when I started to cross the linewhen I should have acted differentlyquot 1 Year and 1 day in prison 0 Career Ruined nancially ruined Cynthia Cooper CP of internal Audit 0 quotits important to be able to big down and nd your courage which isn t always so easyquot Classic Ethical Dilemma 0 Con ict of personal ethical values 0 Integrity vs Loyalty 0 Short term vs Long term bene ts 0 Speaking out whistleblowing 0 Cynthia Cooper MCI Internal Audit 0 If you have a Character De ning Moment at the University how will you respond Testing for Integrity Commonly used in retail accountingbanking and healthcare sectors Predicts theft fraud workplace hostility and job performance 0 Designed to detect faking providing the expected or desired answers o If faced with a screening test you should respond honestly 0 Consider the choices you make now Normative Theories of Business Ethics Stockholder Theorv Stockholders advance capital to corporate managers who act as agents in advancing their ends 0 Managers are bound to the interest of the shareholders maximize shareholder value 0 Manager s duties 0 Bound to employ lega nonfraudulent means 0 Must take long view of shareholder interest Stakeholder Theory 0 Managers are entrusted with a responsibility duciary or other to all those who hold a stake in or a claim on the rm 0 Stakeholders are 0 any group that vitally affects the corporation survival and success 0 Any group whose interests the actions of the corporation vitally affects Management must enact and follow policies that balance the right of all stakeholders without impinging upon the rights of any one particular stakeholder Social Contract Theory 0 Corporations are expected to create more value to society that it consumes 0 Social Contract 0 Social Welfare corporations must produce greater bene ts than their associated costs 0 Justice Corporations must pursue pro ts legally without fraud or deception and avoid actions that harm society Plagiarism Why do students plagiarize procrastinationtime management 0 easy way out dont have to do the work 0 weak research and critical thinking skills 0 new learning culture 0 educational background 0 language skills 0 Design of assessment it s not clearly de ned what you are and are not allowed to do Entrepreneurship and Innovation The power of entrepreneurship Video Case Study 1 in 6 of us are unemployed 4 billion of us live on less than 10 a day entrepreneur someone who starts their own business 0 people start businesses to sell make invent build grow or make the world a better place 0 technology is everywhere today 0 with technology comes information with information people can open doors and take the rst steps Exploring the meaning of Entrepreneurship and Innovation De ning Entrepreneurship in the context of innovation 0 Entrepreneurship is the marketoriented mechanism for advancing the value proposition of innovation Forms of innovation 4 P s 0 Product 0 medical products ex catscans Process 0 Assembly Line 0 repositioning 0 Military Jeeps Redbox Mechanism 0 Paradigm shifts Radical thru incremental o lphones lpads What is innovation Video Case Studv something new something useful 0 Ideas imagination risk focus exibility curiosity etc 0 you can t use up creativity 0 logic will take you from A to B quotfall seven times stand up eightquot Creativity is contagious Types of Innovation 0 Product Leadership True Entrepreneurs Ideas that nobody else has Product Innovation Platform innovation disruptive innovation Application innovation OWU39lbULJNl l 0 Customer intimacy 1 Line extension innovation 2 Enhancement innovation 3 marketing innovation 4 experimental innovation 0 Operational excellence 1 Value Engineering innovation 2 Integration innovation 1 Apple iCIoud Apple iwatch 3 Process innovation 4 Value Migration Innovation 0 Category Renewal 1 Organic renewal 1 Reused old materials in the consumer market 2 Acquisition renewal 1 Microsoft windows form platform 3 Harvest amp Exit 1 Doesn t make sense to manufacture the product 2 Shut it down to go into a new product The McGuire Center for Entrepreneurship The McGuire Center for Entrepreneurship is committed to enabling and advancing entrepreneurial goals of all university populations and to advancing the understanding of the in uence and role of entrepreneurship in both business and academic communities 0 For more information contact Jeff Burrows assistant director of the McGuire Center for Entrepreneurship at burrowselerarizonaedu eGovernment and Digital Citizenship What is eGovernment Government to citizen G20 Examples include tax filing driver s license renewal permits licenses etc Government to Government G2G Examples include child support filing criminal offender information homeland security reporting etc Government to business G28 Examples include UCC filing tax filing permits professional Government to employee G2E or intra Government efficiency and effectiveness IEF Examples include intranets and employee portals EGovernment Strategy Report OMB2002 An effective EGovernment strategy will result in 1 quotsimplifying delivery of services to citizens 2 eliminating layers of government management 3 simplifying agencies business processes and reducing costs through integrating and eliminating systems 4 streamlining government operations to guarantee rapid response to citizens needsquot 5 Reduced calls and visits to government offices thus increasing the value of those services that must still be made available in that way 6 better evidencebased policymaking Ten practical online steps for Government Support of Democracy Access to information meeting announcements online hearings Decision making Data Access to Elected Officials email and contact information Access to online services Permitted and licensing Democracy Online Future Democracy Online with an interactive Public Commons Government Provide extensive information online with userfocused systems and public access points Make Democracy information fully available Open Governmentquot Email tofrom public email information dissemination use interactivity and collaboration externallyinternally regulatory factors and support local more direct involvement Private Sector Provide user connectivity increase bandwidth lower costs and bring more users provide and develop user tools provide technical support embrace open standards Make information tools beyond the WWW like email lists push channels WWW Conferencing available to community organizations citizen based online democracy efforts and individuals Provide funding to Civic efforts as should the other sectors Political Organizations Provide information about positions candidates advocacy efforts involvement opportunities Use tools strategically to further your cause involve organization and supporters directly in online interactive spaces Don t use IT to only increase the Level of Political Protest aimed at Representative Democracy Enhance Participatory Democracy Citizens in the online commons Commit Time to participate Use and Analyze information Produce and Share own information ideas and opinions communicate respectfully and responsibly Help others learn Startvolunteer with citizen based online democracy efforts and community networks Work with others to use tools for public good at all levels Building Trust in Government EDemocracy in Minnesota On Air legislative Coverage 1 Floor Sessions and Committee Hearings Minnesota Legislature Online 1 Bills Proceedings and Reports Local Arizona Perspective 1 Live proceedings on ACTV Arizona Capital Television and httpwwwazleggov Engaging Citizens Gainesville Police Department Enggles Citizens and Enhances Public Safety Demystify Law Enforcement Operations Motivate Community Groups Enable citizens to protect themselves 1 P2C Mapping of Police Incidents UALERT UA Alert delivers alert during a campus emergency Classroom emergency notification system Public Comment California Budget Challenge 1 Httpwwwnext10orgchallenge Decision process for 1 spending priorities Education Healthcare Criminal Justice etc 2 Revenue Options Taxation income corporate property gas etc Next Generation eDemocracy Representation Personalization and Notification email notices Decision Making and Leadership Consultation and ERulemaking Accountability US Farm Support Payments Lookup Policy Implementation Citizen Participation and Online Dialogue Visit Httpwwwedemocracyorg Localization Personalization based on geography interests MW Democratic National Committee DNC Election Strategy 2008 In all 50 States Identify and Motivate Democratic Voters Identify Independent Voters who could support Democratic Ideals Identify Republicans Target Persuadable and GOTV voters Voter Identification Matrix Voter Activation Network VAN a Blockwalking List Report Used by Political organizations What the Blockwalking list includes Name Age Gender Phone Precinct convention participant 1 Xwhichever criterion has been selected for report Voting History 1 Y Election Day EEarly Voting MMailinballot DDemocratic Primary RRepublican Primary Pew Study Reports Going online for news about politics the candidates or campaign issues 60 of internet users did this in 2008 Communicating with other about politics using the internet 38 of internet users talking about the politics online with others over the course of the campaign Sharing or receiving campaign information using specific tools such as email internet messaging text messages or twitter 59 of the internet users use one or more of these tools to send or receive political messages Personal Financial Management Financial Literacy The ability to effectively evaluate and manage one s finances in order to make prudent decisions toward reaching life s goals The understanding of 0 Money 0 Cash Flow 0 Basic EconomicFinancial Concepts 0 DebtRisk Management America s Finance Literacy The average american family spends 122 for every 1 it earns 1 in 5 american families with annual household income of less than 50000 is spending 40 of aftertax income to service its debts Credit Card Debt has tripled in past two decades and the average American household owes more than 9000 2600 in 1989 2 out of 3 households will probably fail to realize life goals Financial literacy is passed to the next generation average high school senior failed 2006 financial knowledge surgery Key Areas of personal finance money and income savings and debt savings and investments risk management life s mistakes Choices college students face how much to work how much to spend and the value of budgeting how to manage credit cards how to use a bank or credit union account how to manage household finances Choices recent college Graduates face How to effectively manage student loan debt how to manage salary and benefits and plan for the future pursuing additional postsecondary education Personal Finance vs Accounting Just like in business there is a difference between personal finance and person accounting 1 Accounting includes keeping track of budgets accounts taxes etc 2 Finance involves managing earnings savings debt setting goals etc 3 Both are important and are best when used together It s all about Goals If you don t know where you want to go you ll have a hard time getting there 0 Short Term Goals 1 to 6 months pay the rent eat pay tuition some RampR 0 Medium Term Goals 2 to 5 years finish college house in 5 years travel rainy day funds 0 Long Term Goals gt 5 years Comfortable retirement second house pay for kids college Budgeting or Do you know where you arequot Budgeting is a fundamental skill There are many tools pe0ple use to set and stick to a budget the best one is the one you will actually use 1 Excel is always an option Some budgeting Fundamentals Balance your budget 0 Spend less or earn more 0 Hard to do when in college Debt 0 Easy to accumulate 0 hard to pay off Prepare for the unexpected 0 Life happens and it usually costs money Know your paycheck There can be many deductions 0 Social Security 62 Medicare 145 FICA 0 Insurance Health Dental Vision Disability 0 Retirement 0 Taxes Feder state Sometimes Local 0 Deductions may pretax or posttax Deductions can be easily 35 of gross pay if your disability insurance is paid with pretax dollars instead of post tax dollars the disability benefits are taxable Personal Finance Resources At the UofA 1 httptakechargecatsorg Other Online Resources 1 httpwwwfeedthepigsorg 91615 Digital Identity and Online Reputation A paradox lies at the heart of American s view on privacy They cherish it as a right and principle 0 80 o95 o say they think it is very important depending on the question framing yet often will act in their daily lives in ways that allow other to monitor and track them 0 50 o70 o do so in their use of credit cards preferred customer cards online activities Privacy Actually Means three things to Americans Anonymity 1 tied to interactions with others Confidentiality 1 control over the use of their personal information by corporations and government 1 Ex Cat card Credit Card etc 2 FERPA Security 1 Protection from data loss and identity theft The Case of the Stacy Snyder Online Drunken Pirate Facts of the case 0 25 year old teacher in training High School 0 Enrolled at Millersville University in a teaching degree program 0 Photo captioned Drunken Pirate posted on her personal myspace page 0 Discovered and reported by a concerned parents to the school principal Outcome 0 Considered unprofessional by high school 0 Her posting promoted drinking in virtual view of her students 0 Stacy was denied teaching certificate awarded a non teaching degree 0 Stacy sued but lost in Federal court because stacy was a public employee and the posting was not considered protected speech What is your online reputation Location based information o Addresses phone numbers schools Social Networking and media sites 0 profiles comments images and friends actions Blogs forums message boards 0 Articles letters to the editor by you and about you PleaseRobMecom Uses location based services such as Fouquuare to show that sharing your location may have unintended consequences When you re at work the bar the club the gym concert or wherever and whenever But mostly thatyou re not at home There is not a Delete Button on the Web The Internet Archive and its Way Back Machine gives you a historical snapshot of a site within seconds The Wayback Machine Browse through over 150 billion web pages archived from 1996 to a few months ago To start surfing the Wayback type in the web address of a site or page where you would like to start and press enter Then select from the archived dates available The resulting pages point to other archived pages at as close a date as possible Keyword searching is not currently supported The New Employment Background Check Employers are using social networks to screen job applicants 91 Employers use your thoughts and judgements that you make available to the public as a reflection of what you will do with clients and team members Social Intelligence Corp scours the Internet for pictures and comments you freely shared and sells that data to your potential employers What are employer s considering A total of 63 candidates are rejected before the interview Your pictures 11 of candidates are rejected due to inappropriate photos Your information 13 of candidates have been rejected due to lying about their qualification and information Your posts and statuses o 11 are rejected for inappropriate comments 0 11 for inappropriate comments about previous jobs 0 11 for poor communication skills 0 11 for discriminatory comments and o 19 for content of alcohol abuse and drug use Social Media Screening socialintelcom Social media screening and investigate services including employment background checks Prevent discrimination claims when company does their own investigation and picks up protected information race religion national origin sexual orientation and disability status Why is your digital footprint important Recruiters look for methods to differentiate between candidates 0 Whos viable candidates 0 who s not a viable candidate Recruiters need evidence to validate their hiring decisions 0 Your digital footprint provides this evidence Impact of being invisible What does it mean when a potential employer college recruiter or client googles your name and does not find anything or much What does it mean NOT to have a digital footprint in these cases Is it positive or does it shed a negative light on your portfolioresume What does it say about you if you do not have a blog a twitter account nor other social network identities Establishing your Digital Footprint Linkedin Populate your profile with keywords o Enhance your chances your chances of being found by recruiters 0 Write recommendationsinclude your nameiob titlecontact info Twitter Secure your full name as a twitter home page Post information related to your field of interest Facebook Presentable Portrait Post resume Keep friend comments and responses upbeat and professional How it s used Recruiters use Facebook to determine compatibility communication skills professionalism Amazoncom Review books related to your job search Blogging Postive not phony upbeat value add How it s used Demonstrates initiatives communication skills passion for subjects Cyber Bullying What is cyber bullying The national Crime Prevention Council s definition of Cuber Bullying is when the internet cell phones or other devices are used to send or post text or images intended to hurt or embarrass another person Basically CyberBullying GB is using technology to harass or intimidate someone Cyber Bullying vs Bullying While Bullying usually happens in person cyber bullying can truly happen anywhere anytime The effects are other carried over to in person interactions The victim typically feels that no place is safe from harassment Examples of Cyber Bullying Posting negative comments or spreading rumors about someone online posting embarrassing photos on websites or sending them by email IM or cell phone Sending threatening or abusive messages via email IM or text messaging Common Forms or Cyber Bullying Harassment Denigration Flaming Impersonation Outing and trickery Cyber Stalking The Key Players Understanding Cyber Bullying o Victims 0 Active Cyberbullying I Initiates actions 0 Passive Cyberbullying I Does not initiate but plays along by forwarding reading etc o Bystanders Step Up Be A leader Make a Difference wwwstepupprogramorg The New Business Environment Web 20 Composed of many different types of websites and contents Social Computing What is social computing Social computing refers to the use of social software a growing trend in IT usage of tools thats support social interaction and communication Social software enables people to rendezvous connect or collaborate through computer mediated communication and to form online communities Examples 0 Social Networks Blogs open source software blogs search engines podcasts C2C Commerce P2P File Sharing Comparison shopping sites tagging WikisCollaboration software user review portals RSS Web 20 Characteristics Rich User experience User participation Dynamic content Metadata Meb standards and scalability Openness Freedom Collective intelligence Web 20 Strategic Lessons Blogging and the wisdom of the crowds Innovation in assembly The Mashups Leverage customerself service and algorithmic data management to reach out to the entire web to the edges and not just the center to the long tail and not just the head Thank syndication not coordination Web 20 Development Lessons The value of the software is proportional to the scale of dynamism of the data it helps to manage Supports lightweight programing models that allow for loosely coulped systems SOAP REST AJAX ETC The perpetual beta Design for hackability and remixability Web 20 Content Lessons Network effects form user participation are the key to market dominance in the Web 20 era Metcalf s Law We the media 1 Citizen Journalists Data is the next Intel Inside Some rights reserved My Taxonomy the science of classification by experts From the greek web 1 Taxis to classifyquot 2 Nomos law science economyquot Hierarchicalenumerative top down tree like structure Hierarchies designed and maintained by experts Repositories cataloged by experts ex libraries Structure imposed on the world of objects Folksonomy Folsonomy social classification The Folks do it Folk Taxonomy meaning that it emerges from the people Open democratic system Constantly evolving based on user interactions and consensus Tags capture the social fabric at that moment in time Structure is an emergent property Well suited to rapidly changing heterogeneous information sources such as the internet and social networks Enterprise 20 Innovative Technology understanding the value to the business 1 Who is empowered and knowledgeable Changing the game by business model innovation 1 Strategic operation decision Applying technology to reduce lT operating costs 1 IT Department decides and approved on cost metrics upgrading Applications to reduce business administration costs 1 Business manager decides and approved on costs metrics Software as a Servicg Service not software User driven adoption Value on demand Low cost of entry Public Infrastructure Simple user interface and data services Easy to use and remix responsive Uls AJAX Feeds Atom RSS Simple extensions Mashups REST APls mmunity Mechanisms Users add value Recommendations Social networking features Tagging user comments community rights management Enterprise 20 E20 This combination of SOA Web 20 patterns and SaaS is the core of the 2010 CIO outlook strategy some analysts call this Enterprise 20 What is the business value for IMB 1 User driven information in search data quality customer insight process improvement etc 2 Simpler more productive solutions for everyone especially mobile employees 3 Integration of user tasks business processes and social awareness to improve quality of results 4 Reduced Cost and higher employee satisfaction 5 Innovate E20 solutions for our clients ECommerce 20 Web 20 opportunities exist in three key areas Capitalizing on New Markets amp Business Models 0 Grab and monetize the Long Tail of demand 0 Get ready Your customers value digital content 0 Jump in Virtual worlds are real business Getting Closer to Your Markets amp Customers 0 Trust the network it really does know more than you o Embrace your customers 0 Use social networks to create solutions Creating New Capabilities 0 Embed flexibility in business models and information systems 0 Foster rapid collaborative innovation in the enterprise Web 20 Social Networks and ECommerce Tenets Web as platform Beyond single device Data as the next Intel Insidequot Lightweight models Rich User Experience Harnessing Collective Intelligence Leveraging the Long Tail Retail more trustworthy transactions review and ratings Entertainment more effective Personalization Recommendations based on your ratings The Long Tail The Long Tail by Chris Anderson WIRED Magazine December 2004 Forget squeezing millions from a few megahits at the top of the charts The future of entertainments is in the millions on niche markets at the shallow end of the bitstream quotWhat percentage of the top 10000 titles in any online media store Netflix iTunes Amazon or any other will rent or sell at least once a month The Power Law demand curve The Long Tail The Long Tail in business Executives at iTunes Amazon and Netflix have discovered that the quotmissesquot usually make money too And because there are so many more of them that money can add up quickly to a huge new market Combine enough nonhits on the Long Tail and you39ve got a market bigger than the hits The average Blockbuster carries fewer than 3000 DVDs Yet a fifth of Netflix rentals are outside its top 3000 titles Google makes most of its money off small advertisers the long tail of advertising and eBay is mostly tail as well niche and oneoff products The Long Tail Three Rules Rule 1 Make everything available 1 In a Long Tail economy it39s more expensive to evaluate than to release Just do it Rule 2 Cut the price in half Now lower it 1 Pull consumers down the tail with lower prices Rule 3 Help me find it 1 Use recommendations to drive demand down to the end of the Long Tail Globalization and Business Relationships How businesses compete with one another in the marketplace What globalization is and how it has evolved and impacted competitive forces How electronically mediated impact a business relationship with its customers Porter s Competitive Forces Model Globalization Simply put globalization is a term to describe our current economic and cultural systems are interconnected Enabling Technologies 1 Digitalization and miniaturization Moore s Law 1 Cost is going down as the power is going up 2 Highspeed networking Gilder s Law 1 Ex Netflix 3 Connectiveness Metcalf s Law 1 NA2 2 Value of the internet is proportional to the number of connections that are on the internet 3 Location Location Location Globalization According to Thomas Friedman Lexus and the Olive Tree Lexus Global Integration Olive Tree Local Culture How has globalization flattened the world Worldwide markets and communities Standardization and Integration Collaboration in Labor Design Production Marketplace and workforce specialization Globalization and Neckties International marketing plan international logistics currency exchange language translation cultural awareness regulations and tariffs plus have the creative and technical skills and materials to make the tie How can we analyze Globalization Economically Open International Trade Direct International Investment NGO S Culturally amp Socially Products International Brands Mass Media CNN Bloggers Language crosscultural vocabulary Values civil liberties work hours Connections traditional roles What Factors creates a globalized business environment Business pressures Economic SocialPoliticalLegal Technology Sears Roebuck and Co 1893 Richard warren Sears founded his business on an shipment of unwanted pocket watches in 1883 railway companies established four times zones to standardize the complex train schedules and watches became a business necessity Sears leveraged his experience with expanded railroad shipping How has Globalization changed 1700 s Countries Explorers amp Trade Routes 1800 s Companies Steam Engines amp Telegraph 1900 s Individuals Jet Travel amp Internet Pace of change has dramatically increased 0 Chili from New World to Asia 100 years 0 McDonald s from Chicago to China 20 years Internet Enabled Globalization Effects Time Loca on Design and Relationships Competitive Time Effects Removes time as a barrier to communication Instantaneous Global Access to news trade and financial markets News travels instantaneously Zero Latency Interactivity Asynchronous BuyerSeller Interactions 247 All Services All The Time Location Effects Removes geography as a barrier to relationships How has Location Location Location changed Communities both business and personal Economics of Distance Transportation Costs Replaced By Economics of Attention Value Business activities work collaboration are not constrained to a physical location New Relationships Removes intermediaries from relationships Removes intermediaries mediapoliticans and lets individuals receive information directly from governments political advocacy organizations businesses and individuals disintermediation Mass Interactivity and collaboration blogs amp Wiki s Trust without facetoface interactions and contact Competitive Effects Removes barriers to new competitors Impact to Porter s Forces for Competition If the world becomes your market the world also becomes your competition Intermediaries can become critical to facilitate effective commerce reintermediation BusinessConsumer Relationships Disintermediation Decreasing added value of physical intermediaries 1 Dell Computers 2 Best Buy 3 Business Consideration Rivalry Reintermediation New added value roles of electronic intermediaries 1 Expedia or Orbitz 1 American Airlines 2 Business Consideration Substitution 3 Could be a factor in Substitution of Porter s Forces introduction to Financial Markets How companies use accounting principles to describe a company how financial markets determine the market value of a company Components of most corporate accounting systems Financial Accounting Accounting and statements 1 Tax accounting External information 1 lntraorganizational Accounting Managerial Accounting External Information 0 lntraorganizational Accounting Management and Control 0 lntraorganizational Accounting Budgeting o lntraorganizational Accounting Financial Statements Balance Sheet 0 Stock holders 0 conditions of the company lncome statements Statement of cash flow 0 Credit Card Bill but are in debt Financial Statement Analysis Short term solvency activity financial leverage profitability value Accounting principles Accounting items are classified into accounts according to their nature translated into monetary units and organized in statements Basic Accounting Formula 1 ASSETS LIABILITIES EQUITY 1 Assets what the company owns Accounting vs Market value Equity ownership of a company is divided in certificates called common shares Account value or book value equity assetsliabilities 0 Accounting value is different from market valuell Market Value share price Number of common shares outstanding Income Statement Reports the economic results of a company over a time period It shows the derivation of earning or losses When does a transaction affect income when it changes the economic value of the company for the owners Some profitability measures 1 Gross margin Gross ProfitSales 2 Operating Margin Operating IncomeSales 3 Return on sales Net incomeSales 4 Return on Equity Net IncomeShareholders39 Equity Other important measures Earnings per Common share EPS Net incomecommon shares Price Earnings Ratio PE Market PriceEarnings per share Balance Sheet It is a financial snapshot of a company at a given point in time Working Capital measure of the amount of cash available in the short term Also indication of the funds needed operate within a given business size 0 Current Assets Current Liabilities Liquidity Ratio measures of the ability to meet short term financial obligations 0 Current ratio Current Assets current liabilities 0 Acid test Cash Accounts receivable Current liabilities Opperational Efficiency Measures 0 Inventory Turnover cost of sales per year current inventory 0 Accounts receivable Collection period accounts receivable sales 0 Accounts payable collection period accounts payable cost of sales Statement of Cash Flow Analysis How is cash flow different from income 0 Income accrual is not necessarily linked to cash transactions ex depreciation sales by credit 0 Some activities affect cash flows but not income Ex investments in fixed assets additional capital from shareholders Growth often absorbs cash flow because of a high need for working capital and fixed investments Entrepreneurial firms with negative income and high growth can have a very fast cash burn rate Statement of Cash Flows The statement of cash flows reports cash receipts and payments over a period separating operational investigating and financing activities Business financial data for publicly traded companies Stock Market Exchanges Company Ticker Symbols Financial reporting Annual quarterly Stocks An introduction Stocks provide a key instrument for holding personal wealth as well as a way to diversify spreading and reducing the risk that we face For companies they are one of several ways to obtain financing Stocks and stock markets indicate the value of the companies that issued the stocks and they allocate scarce investment resources The Stock Market s Role in the Economy Stock Prices tell us the Market value of companies which determines the allocation of resources The total assets of the company are the book value Firms with a high stock market value have an easier time garnering the resources they need to grow while firms whose stock value is low how difficulty financing their operations So long as stock prices accurately reflect fundamental values this resource allocation mechanism works well The Stock Market Every major country in the world has a stock market exchange and each of these markets has an index such as 1 The Down Jones Industrial average 2 The Standard amp Poor s 500 index 3 NASDAQ composite index 4 Financial Times Stock Exchange 100 index 5 Hang Seng 100 6 Nikkei 225 7 The KSE100 The stock market Financial Mood Ring Shifts in investor psychology may history prices both euphoria and depression are contagious When investors become unjustifiany exuberant about the market s future prospects prices rise regardless of the fundamentals such as mass enthusiasm creates bubbles Bubbles are persistent and expanding gaps between actual stock prices and those warranted by the fundamentals These bubbles inevitably burst creating crashes which can destabilize the real economy Stock Basics Stocks are a type of security that signifies ownership in a corporation and represents a claim on part of the corporations s assets and earnings Stockholders are referred to as shareholders or equity owners Dividends are a portion of a company s earnings decided by the board of directors to a class of its shareholders most secure and stable companies offer dividends to their stockholders Investment Categories Growth Stock Price appreciation lncome Stock Stable Dividends Speculative Stock Potential for substantial price appreciation Cyclical Stocks Linked to the general state of the economy Defensive Stock Hold their value in unstable economic times MidCap stocks Market capitalization of 1 5 billion Smalcap stocks market capitalization of less than 1 Billion How are stocks valued chartists believe that they can predict changes in a stock s price by looking at patterns in its past price movements behaviorists estimate the value of stocks basked on their perception of investor psychology and behavior Technical analysts estimate the value based on a detailed study of the fundamentals which can be analyzed by examining the firm s financial statements Technical analysis Studies supply and demand in a market in an attempt to determine what direction or trent will continue in the future In other words technical analysis attempts to understand the emotions in the market by studying the market itself as opposed to its components Technical analysis is the belief that important information about the future stock price movements can be obtained by studying the historical price movements Assumptions made by technical analysts The market discounts everything 1 Value analysis of financial data The market moves in trends 1 Charting and predictive forecasting History tends to repeat itself 1 Regression analysis Historical Forecasting Business Value Chains ERP and SCM The challenges of managing and coordinating multiple levels of suppliers when producing goods Methods and processes used to manage and assess performan ce Business Value Chains Managing the Value Chains ERP Enterprise Resource Management 1 Inside the walls Management SCM Supply Chain Management 1 Vendorfacing Management Upstream CRM Customer Relationship Management 1 Customerfacing Management Downstream MultiProduct Value Chain Management Collaboration Metrics Effectiveness The degree to which a goal is achieved Efficiency The relationship between resources expended and benefits gai ned in achieving a goal Productivity efficiency of the human resources expended when achieving a goal SCM Issue Bullwhip Effect Large variations in demand in the supply chain 0 Assume flat consumer demand 0 Increasing amplitude fluctuations in frequency size and composition in the supply chain Impact of the Bullwhip Effect 0 Excessive inventory increased safety stock 0 Poor customer service service levels stock outs o Ineffective transportation use lot sizes 0 Misused manufacturing capacity productivity 0 Lost revenues marginal cost Responding to Customer Demand Can Lead to the Bullwhip effect Understanding the Bullwhip Effect Causes of the Bullwhip Effect Price promotions 1 Analysis of the cost of money demand management Batch Purchasing 1 Discounting for consolidated orders logistical efficiency ForecastingTrend Analysis 1 Anticipated increased demand modeling Shortage gaming 1 Known shortages encourage customers to inflate order quantities allocation of inventory Managing the Bullwhip Effect Reduce Variability and Uncertainty 1 Sharing POS Information 2 Yearround low pricing level demand Reduce Lead Times 1 EDI more effective communication 2 Cross Docking reduce material handling Alliance Arrangements 1 Vendor managed inventory operational efficiency 2 Onsite vendor product stocking merchandisers Supply Chain improvement Methodologies There is no shortage of tools and methodologies from which to choose that deliver supply chain improvement Business Process Mapping KaizenContinuousImprovement Six Sigma Kanban Pull systems Enterprise Resource Planning Visual Management Total Quality Mgt Lean Toyota Production System TPS Quality Function Deployment Value Add Analysis Service Value Analysis Affinity Diagram Problem Solving Just in Time Reverse Logistics Mgt Value stream mapping distribution resource planning Manufacturing process mgt 5S Workplace Organization Supply Chain Operations Reference SCOR Production Leveling Voice of Customer VOC Benchmaking Process Capability Assessment Cause and Effect Analysis Fault tree analysis Improving the efficiency and Effectiveness of the supply chain CFAR Collaborative Planning Forecasting and Replenishment SCOR Model Supply Chain Operations Reference Model Efficiency Lean Manufacturing CostQuality Six Sigma Quality CFAR CFAR Traditional Procurement Process Collaborative Planning Forecasting and replenishment Convergence Methodologies SCOR Model Supply Chain Operations Reference Model SCORE Model Scope Lean Manufacturing Lean takes the handoff of project priorities identified by the SCOR Model and makes them happen Driven by Value as Defined by the customer Focused on Implementation and getting it donequot Hands on emphasis Unleashed creativity in problem solving Mindset of Relentless and Never ending continuous improvement Targeted on attaining future value stream delivers supply chain improvement quicker than SCOR alone leveraging existing skills and tools that exist in many companies Lean Process Lean principles reflect a more tactical and implementation focus as compared to the SCOR model s more strategic approach Focus on Customer Value Zero tolerance for waste Quick problem solving and team Workpace organization Visual Management Kaizen continuous improvement39 Standardized work error proofing Total Productive Maintenance Quick Changeover Kanban puw Constrains management The key to successful supply chain performance improvement is in knowing which lean tools to apply to a specific situation Toyota Production System Case Lean Process Tools Waste Identification Overproduction Inventory Transportation Waiting Motion Over Processing Correction Lean techniques allow you to identify how to close performance gaps that are identified by the SCOR model Lean Proces g Tools Value Steam Mapping Mm Six Sigma Benefits Drives higher levels of quality 0 improves productivity 0 Lowers scrapwaste 0 drives reliability and repeatability Data and Statistical Focus 0 Reinforces hands on improvement from Lean 0 Confirms SCORcard gap improvement Structured and Methodical Problem Solving o encourages logical thinking and causeeffect evaluation Addressing complex problems 0 SCOR and Lean do not have the same level of analytical rigor Leverages skills that exist In many organizations Six Sigma Process Define who are the customers and what are their priorities Measure How is the process performing and how is it measured Analyze What are the important causes of the defects Improve How do we remove the causes of the defects Control How can we maintain the improvements Higher quality lower costhigher profitability Six Sigma Tools Process Mapping Failure Mode and effect analysis Measurement system evaluation Statistical Tests Design of experiments Control Plans Quality function Development QFD Activity based management Business Process Modeling What is a model In the physical world 0 a small object built to scale representing a larger more complex object In the mathematical world 0 a set of assumptions and relationships that describe the workings of a system In the business world 0 a description of a structure or process used in a business that explains how it will work in the real world Types of models used in business In general every aspect of a business can be modeled in multiple ways for a variety of purposes Financial Models Cashflow Analysis Production Models Factory Layout Sales Models Product Promotions Organizational Models Staffing Plans Business Model Definition of a business model 0 the method of doing business by which a company can sustain itself Value proposition 0 how a product or service fulfills the needs of a customer eg personalization customization reduction of search costs discount Revenue model 0 how the firm will earn revenue and make a profit eg sales transaction fees subscriptions Business Process Design A Business Process Design describes element of tasks or ac ons 0 Organizational Relationships 0 Temporal Relationships of Activities 0 Business Decisions 0 Troubleshooting o Leadership and Management 0 Process Improvement Connecting a Conceptual Model to the User s Mental Model Design Model DM 1 how the system should work from the designer s point of view Mental Model MM 1 How the system should work from the user s point of view Design Model and User Model Users gets their MM from their background experiences and the design elements of the user interface Ul What if design amp user models don t match MlS 111 Lab Problem Sets As Planned Designer Watch online lesson 0 Refer to textbook 0 Confirm in Excel Begin Problem Set 0 Refer to textbook 0 Review online lesson 0 Confirm in Excel As Used User Begin the Problem Set 1 Already know the answer 2 Search the textbook pdf for keywords in the question Find the answer 1 Try the problem in Excel 2 Search online lesson 3 Guess What s the correct method Depends on the learning outcome and the current competencies of the student Reward value proposition 0 Score on the problem set 0 Skills development How is the strategy affected by the fact that problem sets are not timed Simple Business Process Model for Order Fulfillment Before Laying out the Model Have a General Description and Actors or Roles General Task Description 0 Given a customer order who takes what action and when is it done Task Roles 0 Person Customer 0 Person Salesperson 0 System Warehouse Dispatch Then Based on the Description and the Roles Specify Key Action Items amp Decisions Action Items when 0 Customer who enters an item what 1 st 0 Salesperson who adds the item to the customer s order what 2 nd 0 Warehouse who ships the item what 3 rd 0 Customer who receives the item what 4th Decision Points Are there any more items to order CFD Guidelines and Conventions Decisions can loop back up if you need to try something again The business process includes all action and decision points listed earlier The process should always starts at the top and ends at the bottom with a vertical layout Basic Flowcharting Symbols Begin amp End 0 Start Stop Process 0 Do this action Decision 0 A or B Connection 0 Line Business Process Modeling Layout Columns for Each Actor or Role these are often called swimlanes Actors or roles can include people or information systems In a vertical diagram you start at the top and proceed down How to shape communicates Modeling Cause and Effect for Business Analysis Fishbone Diagram Dr Kaoru lshikawa a Japanese quality control statistician invented the fishbone diagram so these diagrams are also known as lshikawa diagrams The fishbone diagram is an analysis tool that provides a systematic way of looking at effects and the causes that create or contribute to those effects Analyze the problems Select major categories 1 Policy Plant People Procedures Identify key issues in each category 1 Parking Pricing Training Channels Organize Issues by category and relationship to the root problem Identifying Problem Cause and Effect Databases and Database Management Data Databases and Database Management What is the value of a database Organize o Helps us manage large quantities of information Analysis and Decision Making 0 Helps us understand more about our data Communicate and Collaborate o Helps us share information with others Database as a real world model A database captures realworld relationships between people or objects Facebook as an example allows you to see information related to your friends and their connections with one another What informationrelated issues does a database solve Eliminate problems Data Redundancy Data Isolation Data Inconsistency Enhance Data Value Data Security Data Integrity Data Independence Data Modeling Entity Relationship Diagram as a model of data and relationships 1 In 1976 Peter Chen from Louisiana State University developed a very effective way of conceptualizing data What does an ER diagram tell us Actors in the design Entities Relationships among actors Links Organizational Structure Entity Relationships Diagram Modeling Actors Entity and Entity Classes Entity a person place thing or event about which information is maintained Entity Class an abstract representation of ALL of a particular type of entity Attributes Attribute a characteristic or quality of a particular entity class Primary Key an attribute that uniquely identifies an entity class always underlined Ex Students 1 Student ID 2 Students name 3 Students Email Relationships connect entities 1 Students gtenrolI gt courses Constraints define business rules Ex Teachers We want to represent all teachers and keep track of their names email addresses and salaries 1 Teachers ID 2 Teachers Name 3 Teachers Email 4 Teachers Salary Ex Courses We want to represent all courses and keep track of course numbers and course names 1 Course Number 2 Course name Database Management Systems DBMS Implementing the ERD Relational Tables We can use the entity relationship diagrams we design to create relational tables that can be stored in a database NOTE A relational database is not just a table of information It consists of multiple tables that reference one another Relational Databases You said relational tables what does that mean I thought data was stored in folders and files Most data is organized hierarchically 0 like the file system you know and possibly love on your computer Tedd Codd was unimpressed In the 1960s a man working for IBM decided that he could improve upon hierarchical data storage He knew that the hierarchical model led to data redundancy and confusion 0 We always have to start at the top node That makes looking for the data I need take forever 0 Sometimes I end up with the same data saved in different places If I need to update that data I need to do it in multiple places Lets Try Something New The concept of the ERD was developed shortly after Ted Codd s formulation of the relational model In order to see what Codd developed we are going to see how ERDs can be converted into a set of relational tables used in a DBMS The tables we develop will be an example of Codd s relational database model The relational Data model Primary key attribute that uniquely identifies a record Foreign key shared field that allows relational tables to link to one another and minimizes data redundancy 0 Teacher ID is now a foreign Key in the Courses Table Managing your marketing with databases Multiple Sales Channels Web amp Email Retail amp Wholesale Fax Phone amp Mail Data Stored in separate silos Web database 1 Web amp Email Retail POS database 1 Retail amp Wholesale Telesales Database 1 Fax phone amp Mail Result No one understands the customers Emails sent based on email response alone not on overall purchases Gold customers are seldom recognized Long time customers treated as strangers Customers feel unappreciated You may lose your best supporters Solution Build a Central Marketing Database Data cleaning amp Consolidating Consolidated Marketing Database Updated weekly daily or more often What is kept in the database record Transactions Appended data Web Behavior amp cookies LTV RFM Model Scores Segment Status Level Promotion Responses How is the database used Email campaigns Phone campaigns Direct mail campaigns Customer segmentation Status level rewards Models and analytics Website Recognition Defection Prediction How is the database accessed Through the web 1 Marketing staff 2 Analytics staff 3 Website Through the database 1 Data center for updating and maintenance Segments and Status Levels Gold 1 Business Customers 2 Affluent retired Silver 1 Business Customers 2 Affluent Retired 3 Young Slngles 4 Families with kids Bronze 1 Young Singles 2 Families with kids 3 Bargain Shoppers 4 Occasional Buyers Skill Search Application Demo Case Study The geographic location of a given asset has a direct impact on its value to an organization This premise underlies an application we developed for a large construction firm specializing in heavy industrial projects across a dozen states employing a staff of nearly 2500 The geographic extent of operations provide many staffing challenges Old methods resulted in increased travel costs as personnel might be assigned to projects many hours from home even when qualified workers were available nearby No tools existed to make fast reliable evaluations about the proximity of skilled workers to a given job site Staffing personnel needed an application that could assist them in finding qualified workers for jobs that were within a reasonable drive of the job site Furthermore this application needed to be available to staffing personnel at job sites around the country not just in the home office Skill Search Skill Search is a Webbased application that empowers staffing decision makers to make optimal use of any organizations geographically diverse workforce Skill Search begins by prompting the user for the skills training education and geographic proximity required for an assignment Skill Search then creates a list of qualified candidates 1 locates each candidate on the map 2 locates the job site on the map 3 The user can interact with the map to explore associated business data about each worker or job site A worker information page displays the associated business data to assist in that staffing decision A map illustrates the best route from the employee s home to the job site To reduce confusion tardiness and worker frustration the map also includes turn by turn directions from their home to the job site with mileage and estimated travel time Data Management and Administration as a career Business Applications Top Types Run on Oracle 1 Financial 2 Enterprise Data warehouse 3 Business intelligence 4 Human Resources 5 CRM 6 ERP Top Types run on SQL Server 1 Business intelligence 2 Financial 3 Enterprise Data warehouse 4 CRM 5 Human Resources 6 Knowledge Management Planning for the future It s the perfect time to be in this industry DBMSs remain at the heart of the IT supporting critical business operations in companies of all sizes Securing DBs will remain a high priority as will improving availability and disaster recovery Need to handle unstructured data will grow 0 Emails Web pages calltracking data reports images voice o Forrester estimates that 90 of all business data is unstructured o Searchable easytoaccess new requirements So what does all this mean to you Importance of data management to business has escalated over time yielding a robust career path Hottest technology jobs 0 1 tie Networking amp Help deskenduser support 0 2 Applications development 0 3 Datadatabase management ABP2 amp Concepts in Business Security Data Analysis Networks Virtual Private Networks VPNs amp Network Addresses Business home organizational and personal networks typically connect to each other through Internet Service Providers lSPs and Telecom Company connections Telecom Companies connect to each other In some countries the Telecom infrastructure is government ow ned Data is exchanged in chunks called packets Packets include a copy of their destination address Packets can carry all types of data but they aren t that big sot hey only carry data for one specific purpose If more data is required then fits into a packet it is broken up an d put into many packets The receiving computer puts all the packets back together agai n Packets just keep getting forwarded towards their destination u ntil they arrive Virtual Private Networks We have no control over the path internet traffic takes It is possible for people or organizations along the path want to see what we are doing and use that data for their own use or modify it some lSPs are now inserting their own ads into webp ages 0 Hackers Corporations 0 Government agencies Network Security If we encrypt our data then it can t be looked at or modified 0 We can encrypt data from a web browser to a web server This is done using SSL or comparable newer technologie s such as TLS That little lock in your browser indicates a secure web connection 0 We can encrypts all traffic from a computer or site to anot her computer or site This is called a Virtual Private Netwo rk of VPN Why VPNs We need security for applications beyond web sited Web site security SSL TLS is very good but NOT perfect do n t access your bank account over public wifi in LAX Dedicated leased lines cost too much VPN is an overlay network built on top of public network especi ally lnternet It is totally transparent to applications Virtual Private Networks a A leasedline private network b A sitetosite virtual private network It is also possible to have computer to site and computer to co mputer VPN connections What do VPNs have to do with the UofA The UofA allows all students faculty and staff to VPN into the university from their home and laptop computers Some secure applications can only be accesses from on campu s or through a VPN such as financial systems or grades The UofA Library website checks whether a computer is on ca mpus before giving access to paid resources and a VPN make s a computer look like it is on campus Why does that matter Anyone ANYWHERE IN THE WORLD who can VPN into the U ofA can then conduct activities as if they were sitting at a comp uter at the UofA This used to only require capturing a student s NetlD and Pass word There were a growing number of compromised Netle being us ed from around the world What is the UofA doing about it This year the UofA implemented a NetlD system Using the VPN originally required the NetlD and Password Using the VPN now also required a code number which can be generated from a phone app that connects to the UofA This two factor authentication makes it far more difficult for hac kers or other entities to access the UofA VPN Ne D App on your smartphone or sms text message httpsecurityarizonaedunetidplusenrollmentusing smartphone Internet Addresses Every computer on the Internet has an Address 0 Some are public and visible from any computer anywher e in the world 0 Some are private 1 Like your room number in a Hotel messages coming in ar e filtered be the front desk or concierge who can forward t 0 you as appropriate 2 Computers with Private addresses can access the lnterne t through a shared public address The Original Internet lP Addressing Scheme Four numbers each ranging from 1 to 255 each separated by penods Some addresses reserved and unusable All the fancy internet names wwwgooglecom are just translat ed into these addresses Using a system called DNS which is what the computers really use to communicate 1 wwwgooglecom 216582194 ABP2 We have some data yes used fake data on IP addresses th at were accessing the UofA s VPN system early December 201 4 0 We have a list showing what address ranges were assign ed to what country 0 We you need to use Vlookup to figure out what countrie s were the source of these connections 0 We then need to tally connections by country remember Sumifrange value range 0 Finally we need a graph of the top 10 Passwords o NetlD s are compromised through Magic well not usually 0 There are things pe0ple do that lead to compromise in A BP2 we want you to analyze three areas where password managementsecurity can go wrong 1 Things pe0ple do that aren t computer related 2 Things pe0ple do while working on their computer 3 Things done to one s computer that they didn t intend or k now could happen ex starts with h rhymes with ack ABP2 Process Diagram There will be a business process diagram sometimes called a cross functional flowchart 1 Four swim lanes These are NOT optional 2 Using Visio is HIGHLY recommended Library has it 3 Virtual Box 4 Go to OSCR lab park student union Additional Hints ln Vlookup you will need to set the final attribute to TRUE Ap proximate Match When using country names or abbreviations both provided be consistent always use the full name or the same type of abbrev iation Business Analytics and Decision Support Decision support for business Success of an organization depends on the quality of its information and decisions Decisions must be made when more than one possible action is available Often difficult to make decisions when many reasonable alternatives present The Three Phase Decision Making process Intelligence phase Scoping 1 Collect and translate data into information and knowledge Design phase Algorithm 1 Select a method for considering data Choice phase Execution 1 Select an alternative Structured and Unstructured Problems A Structured problem is an optimal solution can be reached through single set of steps by using an algorithm 0 Algorithm sequence of steps 0 Parameters categories of data considered in algorithm 0 Most mathematical and physical problems are structured An Unstructured problem exists when an algorithm doesn t exist the options are very complex or the calculation requires an impractical amount of time to solve 0 Common Characteristics are many potential factors Complex relationships 0 Predicting the Stock market or weather Case Study UA Planner Decision support system for course planning and academic advising Features include the ability to 0 Adjust and personalize course schedule 0 Changing the order of courses 0 Double major requirements Executive Dashboards Business Data Visualization for Decision Making intuitive interactive displays of information including dials gauges sliders check boxes and traffic lights These displays indicate the status of an item or the state of a performance metric compared with a goal or target value Dashboard information visualization between the tool and decision maker 1 Resembles a car dashboard 2 Contains visual images familiar icons 3 Designed represent data in a format that s readily recognizable and easily understood Important Terms KPI Key Performance Indicator 1 Business metric Drill Down 1 Accessing the supporting detailed data CSF Critical Success Factor 1 Issue central to the success of a task Exception Reporting 1 Identifies metrics outside tolerance Executive Dashboard Case Study Ruby Tuesday s Management Performance Review How do you make your decision Possible analysis techniques 0 Fishbone analysis rootcause analysis 0 Business process modeling compliance 0 Multidimensional sales analysis crossregion What might explain why the total items sold varies so dramatically Between Regions same period 1 Number of outlets normalized Within a region yeartoyear 1 Product Quality and Sourcing 2 Owner s Waitstaff Experience 3 Consumer Demographics 4 Local Competition Problems solved by Decision Support Systems Food production and retailing 0 Forecast number of patrons 0 Amount of ingredients to purchase Agriculture 0 Pesticide selection 0 Crop rotation plans Yield revenue management 0 Maximize revenue 0 Airline trips 0 Lodging Financial services Credit history 0 Loan amounts and Interest Rates Types of Business Management Decisions Different tiers of management use different types of knowledge to make different types of decisions Decisions in Transportation CEO of an airline Strategic Capability 0 Operating routes and aircraft Management Execution o Boarding passes vs queues 0 Services in ticket classes Operational Process 0 Methods and practices 0 Staffing for gates vs checkin counter Data Mining and Business intelligence Mg Data mining is the detection characterization and exploitation of actionable patterns in business data Data Mining problems What does your domain look like How well is the problem understood How quotbigquot is the problem What kind of data do we have What question are we answering How deeply buried in the data is the answer How must the answer be presented to the user Common reasons Data Mining projects fail Mistakes can occur in each major element of data mining 1 Specification of Enterprise Objectives What is success 2 Creation of the DM Environment Data Preparation 3 Data Mining Management 4 Descriptive Modeling and Predictive Modeling 5 Model Evaluation 6 Model Deployment 7 Model Maintenance Anticipating and understanding your customers expectations Major effort of business is BI collection Datamining and OLAP tools are often directly integrated into CRM applications Web becoming popular for transactions Targeted marketing better than mass marketing 0 Data from customer not complete 0 Third party companies are hired to study consumer behaviors such as Doubleclick and Engage Data warehouse Large Multidimensional Datasets Integrates Information from Independent Standalone Applications Characteristics 0 Organization Relevance and Context 0 Consistency Encoded Data Standards 0 Nonvolatile Consistent Information Events 0 Relational Defined Associations Online Analytical Processing OLAP Multidimensional Analysis What is OLAP OnLine Analytical Processing Set of functionalities that facilitate multidimensional data analysis for faster more informed decision making Data Mining Legal and Ethical Issues Privacy Concerns 1 Will impact the way that data can be analyzed 2 Ownership intellectual property issues 3 European data laws will have implications on US Often data included in a data warehouse cannot legally be used in decision making process 1 Possibly discriminatory factors Race Gender Age Data contamination will be critical 1 Is the information we re using accurate Filtering Data amp Presenting Information Integrating data into large repositories of information data warehouses o The data processing needs to be limited and focused boiling the ocean 0 Managers need to filter the total information available into what information is pertinent to the decision at hand information overload Data Mining and Business Intelligence STRATEGIES BIDM Strategy 1 Casebased Reasoning Identify a similar problem with a known BIDM Strategy 2 Neural Computing Nonlinear predictive model that is defined using training and observed behaviors BIDM Strategy 3 Nearest neighbor technique Finds data with characteristics that are similar to a new record BIDM Strategy 4 Rule Induction Based on IFTHEN rules statistical significance and probability Data mining and business intelligence METHODS Method 1 Classification Metric Use of demographic characteristics eg sex age race income education Example Indentifying common characteristics of the audiences for a special television program or network MTV PBS and ESPN Outcome more effective placements of media buys advertisements in a market Method 2 Clustering Metric Identifying data with geographic physical or temporal time proximity Example Identifying physical clusters of events eg crime illness mortgage defaults or customer response eg sales following an advertisement Outcome shapes public policy or determines the effectiveness of an advertising campaign Method 3 Association Metric Identifying instances where one event is closely associated with another Formally implication in that A implies B A gt B Example Amazon determines which books are associated with one another and uses that to intelligently suggest other purchases eg People that purchased Taxes for Dummies also purchased the EampY Tax Guide Outcome creates awareness and possible follow on sales of products with customers Method 4 Sequencing Metric Identifying instances where one event is closely followed with another Example Landscaping major appliance dealers and window tinting companies focus advertising to purchasers of new homes Outcome identifies customers that commonly require a product or service as a consequence of a related purchase from another source Method 5 Forecasting Metric Using historical information to predict future events based on statistical models such as regression analysis Example Estimating the number of customers who will default on their mortgage in the next 12 months based on anticipated interest rates Outcome allows an economist to predict the behavior of the economy ie how will the price of housing change in the next year Data Mining and Business Intelligence Business Example Web Marketing Data Mining Example Association Rules Support is the percentage of rows containing the item combination compared to the total number of rows 1 User 1 frontpage news travel travel 2 User 3 frontpage news frontpage news frontpage 3 User 5 frontpage news news travel travel travel 4 User 8 frontpage sports sports sports weather Assertion If a customer begins on our frontpage then they will also visit our news page In this case there is 75 support for our assertion Application setting advertising rates profiling customers planning for future content
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