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Business Intelligence and Knowledge Management Systems

28 August, 2015 - 10:06

There is a popular saying that the amount of information in the world doubles every ten years. That’s a lot of information! How can the average manager or decision maker expect to keep up with the flood of data that is so easily accessible? How can this decision maker determine what data is useful, which is believable, and how much of it is even relevant to a current problem or opportunity? Information technology turns out to be both the enabler of this flood of data and a tool for sorting through and analyzing it all. When used creatively, information technology can tease out trends and opportunities from data collected for entirely different purposes.

Take, for example, is known for being the most successful “dot-com” company doing business solely over the Internet. It is heralded for its competitive pricing, efficient transactions, and speedy delivery. What it is less well known for is its ability to collect, analyze, and reuse marketing data. keeps a database of every sale it makes to a customer. The company knows when and what you order, and will send you an e-mail coupon to prod you to order again if it has been a while since you last ordered anything. The coupon may be for an entirely different product line. If you bought a computer book, you might get a coupon to order some computer equipment. Buy Harry Potter, and get a discount on toys or video games.

When you look at a book on the site, you will also see a list of other books bought by customers who bought the book you are considering, which may entice you to expand your purchase. had been publishing a list of books bought by customers at different large employers but stopped when companies objected on the grounds of privacy. (Of course, this change doesn’t mean can’t follow trends internally to help its marketing staff.) can also analyze pricing, occasionally experimenting with varying purchase prices to different customers to increase revenues on its current volume of sales.

How does accomplish all of this? It relies on high-quality data in its database and uses business intelligence tools to analyze the data in support of business decisions. This chapter introduces several types of business intelligence tools to give you an idea of how a company combines the data that it collects with publicly available data to support decision making throughout the layers of management.

Learning Objectives

  • To recognize how information is used for different types of decisions at various levels in the organization
  • To become familiar with the support that management receives from decision aids such as Business Intelligence systems, OLAP, groupware, expert systems, and intelligent agents
  • To understand the importance and challenges of formally managing organizational knowledge, and to recognize the technologies that enable successful knowledge management