What is Data Mining? Chapter 11 Knowledge Management

Transcription

1 Chapter 11 Management Jason C. H. Chen, Ph.D. Professor of MIS School of Business Administration Gonzaga University Spokane, WA What is Data Mining? Data mining the process of analyzing data to extract information (unknown patterns) not offered by the raw data alone To perform data mining users need data-mining tools Data-mining tool uses a variety of techniques to find patterns and relationships in large volumes of information and infers rules that predict future behavior and guide decision making A wide range of data mining techniques are being used by organization to gain a better understanding of their customers and their operations and to solve complex organizational problems. An example Grocery Store in UK CRM and BI Example A Grocery store in U.K. with the following patterns found: Every Thursday afternoon Young Fathers (why?) shopping at store Two of the followings are always included in their shopping list and What other decisions should be made as a store manager (in terms of store layout)? Short term vs. Long term This is an example of cross-selling Other types of promotion: up-sell, bundled-sell IT (e.g., BI) helps to find valuable information then decision makers make a timely/right decision for improving/creating competitive advantages. Process Management Customer Relations Project Delivery Model Accounting and other functional areas Resource Management Project Management From Old World to E-World of Business: Management for Paradigm Shifts Old World of Business IT-Intensive Radical Redesign Streamlining Bottlenecks E-World of Business for Paradigm Shifts Radical Rethinking of the Business and Organization for a World of Re-everything Database vs. Datawarehouse DBMS??? Database Datawarehouse Replacing humans with machines 1

2 Business Analytics Business Analytics (cont.) Business Analytics (BA) is an term including data, business, enterprise information management, enterprise performance management, analytic applications, and governance, risk, and compliance. Business Intelligence (BI) is a set of and used to describe business performance. Companies find success through better use of analytics. Many companies offer similar products and user comparable technologies. Business processes are among the last remaining points of differentiation. Focus on -based management to drive decision making. Davenport and Harris suggest that companies who are successful competing with business analytics have these five capabilities: Hard to Uniqueness Better than competition Characteristics of strategic resources are:,, non-, non-transferable, non-substitutable, combinable, and To successfully build B.A. capabilities in the enterprise, companies make a significant investment in their: 1), 2), and 3) strategic decision-making Component Definition Example Data Repository Software Tools Analytics Environment Skilled Work Force Servers and software used to store data Applications and processes for statistical analysis, forecasting, predictive modeling and optimization. Forecasting software package Organizational environment that creates and sustains the use of analytics tools that encourages the use of the analytics tools; willingness to test or experiment Work force that has the training, experience and capability to use the analytics tools Harrahs and Capital One have such work forces management vs. technology projects Management Project Emphasizes information for users Support organization improvement and innovation Adds value to content by filtering, interpretation, and synthesis Require on-going user contributions Balanced focus on both technology and culture Variety of inputs often precludes automated capture of knowledge Technology Project Emphasizes of information for users Support existing operations Delivers content only Emphasizes one-way transfer of information Primary focus on technology Assumes capture of all information inputs can be automated Figure 11.6 Components of Business Analytics Then, is there a general rule to determine a project is a KM project or a IT project? KM Project vs. IT Project According to Davenport and Prusak point out in their %rule, if more than one-third of the time and money spent on a project is spent on technology, the project becomes an IT project rather than a KM project. Real-Time, Relational DB ot Real-Time Online Transaction Process vs. Online Analytic Process Data Base (copied to) OLTP (Daily operations) OLAP Data Warehouse (on-daily operations) (for quick and easy access) Business Business 12 2

3 Economic reliance on knowledge workers is increasing Customers and businesses want a more integrated approach. Best to say you are in the knowledge business Working Smarter, ot Harder Overlapping / / factors in KM: Why Management? Business evolve from competing on, to competing on, to competing on. Effectively managing knowledge as a strategic asset will enable companies to adapt to, to respond to change quickly and easily, and to adopt a when defining products and services. What is Management? management is defined as the processes needed to generate, capture, codify and transfer knowledge across the organization to achieve competitive advantage Pearlson and Saunders. Technology plays a significant role in managing knowledge. and are essential to knowledge management. In short, KM is a process (practice) of capturing a corporation s collective experiences. Intellectual Capital and KM capital is defined as knowledge that has been identified, captured, and leveraged to produce higher-value goods. Intellectual capital is a synonym of KM KM is related to IS in three ways: 1. IT makes up the for KM systems 2. KM systems make up the for many IS applications 3. KM is often referred to as an of IS Figure 12.1 The relationships between data, information, and knowledge. Data Data Simple observation of Data endowed with Valuable information states of the world relevance and purpose from the human mind; includes reflection, Easily captured synthesis, context Easily structured Easily transferred Compact, quantifiable Requires unit of analysis eeds consensus on meaning Human mediation necessary Often garbled in transmission More human contribution Greater value Hard to capture electronically Hard to structure Often tacit Hard to transfer Highly personal to the source 3

4 W S E The Content of Human Mind According to Russell Ackoff, a systems theorist and professor of organizational change, the content of the human mind can be classified into five categories: Data: symbols or : data that are processed to be useful; provides answers to "who", "what", "where", and "when" questions : application of data and information; answers " questions Intelligence/Understanding: appreciation of Wisdom: evaluated understanding. Value Chain Data of the Enterprise Data Intelligence Tacit vs. Explicit knowledge is personal, context-specific and hard to formalize and communicate knowledge can be easily collected, organized and transferred through digital means. Types of What we Know What we don t know We Know We know what we know ( knowledge) We know what we don t know We don t know We don t know what we know ( knowledge) We don t know what we don t know Tacit and Explicit KOWLEDGE Request Feedback Oral Communication Tacit 50-95% Explicit Base 5-50 % Explicit FROM The Four Modes of Conversion TO Tacit Explicit Tacit A. (Sympathized ) Transferring tacit knowledge through shared experiences, apprenticeships, mentoring relationships, on the-job training, Talking at the water cooler C. (Operational ) Converting explicit knowledge into tacit knowledge; learning by doing; studying previously captured explicit knowledge (manuals, documentation) to gain technical know-how Explicit B. (Conceptual ) Articulating and thereby capturing tacit knowledge through use of metaphors, analogies, and models D. (Systematic ) Combining existing explicit knowledge through exchange and synthesis into new explicit knowledge Which mode is the one for classroom processes? John Wiley & Sons, Inc. & Dr. Chen, Systems Source: Theory Ikujiro and onaka Practices and Hirotaka Takeuchi, The -Creating Company, 1995 From Managing to BI Managing knowledge is not a new concept, but one reinvigorated by. KM is still an emerging discipline (BI) is a set of technologies and processes used to describe business performance. BI is a component of KM. Business Analytics use of quantitative and predictive models, and fact based management to drive decisions. An organization s only sustainable competitive advantage lies with how its employees apply knowledge to business problems KM is not a magic bullet. Key to Success: A Learning Organization need to have four characteristics critical to successful Management In general, a successful KM effort requires leadership with,, and an organizational culture that facilitates collaboration. STRUCTURES AD PROCESSES AS ASSETS 4

5 Capital Wellspring of Skill Experience Explicit, Codified Methods Learning Core Competency Learning Manage Core Competency derivative Communication Industries Intellectual & Assets Partnership Patents Data bases Figure: From Organizational to Core Competency Crystallize Core Competence Competence Generalize Best Practice for Reuse Quality Improve quality of information 1 Raw Produce Best Practice Contextualize Organizational 4 Organizational & Comm. John Wiley & Sons, Inc. & Dr. Chen, Systems Theory Technology and PracticesInfrastructure 5 Practice 3 Know-what Know-how Know-why [ knowledge] Hunting Hardening Create Organizational Explicit 2 Tacit Make tacit knowledge explicit THE WORLD OF RE- EVERYTHIG is productive OLY when. requires decentralized intelligence. We need to empower workers Top performers can be a problem; they are not the most. Sustainable Competitive Advantages Any sustainable competitive advantages? How can an organization sustain its competitive advantage? Firms may create/improve their competitive advantages only if they: have to learn, employ management approach, learning to and learning to (life-long learning environment) 28 Conclusion + + = Opportunity for ew Societal Infrastructure A wise CEO will make better decisions and inspire greater loyalty and trust than just a knowledgeable CEO. -- Schrage, 1996 Imagination is more important than. -- Albert Einstein is the beginning of practice; doing is the completion of. (relevant to Buck Lab Case) -- Wang Yang Ming, 1498 (one of great Chinese philosophers) 5

6 From Data to : How Can Organization Gain Competitive Advantage? (Survive and Prosper in the Digital Economy) Data process D. B. D.B.: Structured: R-DBMS Unstructured: Document Mgt. Systems -As a product OT byproduct Organizational Accessible context, Useable experience Sharable Collaborative -As core intellectual capital OT merely a few smart employers Available Reusable Decision Making CRM Accounting Finance Operations Manufacturing External a i i customers Summary KM is related to information systems in three ways: IT makes up its infrastructure, KM makes up the data infrastructure for many IS and apps, and KM is often referred to as an app of IS. Data, information, and knowledge should not be seen as interchangeable. The 2 kinds of knowledge are tacit and explicit. Manage knowledge carefully, there are many valid and of course legal reasons. KM projects can be measured using project-based measures. 6