History proves that data is the most valuable resource available in corporate America? Why do you think so? Where in a historical context do you think these roots come from? 

C H A P T E R 1

DATA: THE NEW
CORPORATE RESOURCE

T he development of database management systems, as well as the development of
modern computers, came about as a result of society’s recognition of the crucial

importance of storing, managing, and retrieving its rapidly expanding volumes of business
data. To understand how far we have come in this regard, it is important to know where
we began and how the concept of managing data has developed. This chapter begins
with the historical background of the storage and uses of data and then continues with a
discussion of the importance of data to the modern corporation.

OBJECTIVES

■ Explain why humankind’s interest in data dates back to ancient times.
■ Describe how data needs have historically driven many information technology

developments.
■ Describe the evolution of data storage media during the last century.
■ Relate the idea of data as a corporate resource that can be used to gain a

competitive advantage to the development of the database management systems
environment.

CHAPTER OUTLINE

Introduction
The History of Data

The Origins of Data

Data Through the Ages

Early Data Problems Spawn

Calculating Devices

Swamped with Data

Modern Data Storage Media

Data in Today’s Information Systems
Environment

Using Data for Competitive
Advantage

Problems in Storing and
Accessing Data

Data as a Corporate Resource

The Database Environment

Summary

2 C h a p t e r 1 Data: The New Corporate Resource

INTRODUCTION

What a fascinating world we live in today! Technological advances are all around
us in virtually every aspect of our daily lives. From cellular telephones to satellite
television to advanced aircraft to modern medicine to computers—especially
computers—high tech is with us wherever we look. Businesses of every description
and size rely on computers and the information systems they support to a degree that
would have been unimaginable just a few short years ago. Businesses routinely use
automated manufacturing and inventory-control techniques, automated financial
transaction procedures, and high-tech marketing tools. As consumers, we take
for granted being able to call our banks, insurance companies, and department
stores to instantly get up-to-the-minute information on our accounts. And everyone,
businesses and consumers alike, has come to rely on the Internet for instant
worldwide communications. Beneath the surface, the foundation for all of this
activity is data: the stored facts that we need to manage all of our human endeavors.

This book is about data. It’s about how to think about data in a highly
organized and deliberate way. It’s about how to store data efficiently and how to
retrieve it effectively. It’s about ways of managing data so that the exact data that
we need will be there when we need it. It’s about the concept of assembling data
into a highly organized collection called a ‘‘database’’ and about the sophisticated
software known as a ‘‘database management system’’ that controls the database
and oversees the database environment. It’s about the various approaches people
have taken to database management and about the roles people have assumed in
the database environment. We will see many real-world examples of data usage
throughout this book.

Computers came into existence because we needed help in processing and
using the massive amounts of data we have been accumulating. Is the converse true?
Could data exist without computers? The answer to this question is a resounding
‘‘yes.’’ In fact, data has existed for thousands of years in some very interesting, if
by today’s standards crude, forms. Furthermore, some very key points in the history
of the development of computing devices were driven, not by any inspiration about
computing for computing’s sake, but by a real need to efficiently handle a pesky data
management problem. Let’s begin by tracing some of these historical milestones in
the evolution of data and data management.

THE HISTORY OF DATA

The Origins of Data

What is data? To start, what is a single piece of data? A single piece of data is a
single fact about something we are interested in. Think about the world around you,
about your environment. In any environment there are things that are important to
you and there are facts about those things that are worth remembering. A ‘‘thing’’
can be an obvious object like an automobile or a piece of furniture. But the concept
of an object is broad enough to include a person, an organization like a company, or
an event that took place such as a particular meeting. A fact can be any characteristic
of an object. In a university environment it may be the fact that student Gloria
Thomas has completed 96 credits; or it may be the fact that Professor Howard Gold
graduated from Ohio State University; or it may be the fact that English 349 is being

The History of Data 3

C O N C E P T S

I N A C T I O N

1-A AMAZON.COM

When one thinks of online shopping,
one of the first companies that comes to mind is certainly
Amazon.com. This highly innovative company, based in
Seattle, WA, was one of the first online stores and has
consistently been one of the most successful. Amazon.com
seeks to be the world’s most customer-centric company,
where customers can find and discover anything they
might want to buy online. Amazon.com and its sellers list
millions of unique new and used items in categories such
as electronics, computers, kitchen products and house-
wares, books, music, DVDs, videos, camera and photo
items, toys, baby and baby registry, software, computer
and video games, cell phones and service, tools and
hardware, travel services, magazine subscriptions, and
outdoor living products. Through Amazon Marketplace,
zShops and Auctions, any business or individual can sell
virtually anything to Amazon.com’s millions of customers.
Demonstrating the reach of the Internet, Amazon.com
has sold to people in over 220 countries.

‘‘Photo Courtesy of Amazon.com’’

Initially implemented in 1995 and continually
improved ever since, Amazon.com’s ‘‘order pipeline’’
is a very sophisticated, information-intensive system that
accepts, processes, and fulfills customer orders. When
someone visits Amazon.com’s Web site, its system tries
to enhance the shopping experience by offering the
customer products on a personalized basis, based on
past buying patterns. Once an order is placed, the system
validates the customer’s credit-card information and sends
the customer an email order confirmation. It then goes
through a process of determining how best to fulfill the
order, including deciding which of several fulfillment sites
from which to ship the goods. When the order is shipped,
the system emails the customer a shipping confirmation.
Throughout the entire process, the system keeps track of
the current status of every order at any point in time.

Amazon.com’s order pipeline system is totally built
on relational database technology. Most of it uses Oracle
running on Hewlett Packard Unix systems. In order to

4 C h a p t e r 1 Data: The New Corporate Resource

achieve high degrees of scalability and availability, the
system is organized around the concept of distributed
databases, including replicated data that is updated
simultaneously at several domestic and international
locations. The system is integrated with the Oracle Finan-
cials enterprise resource planning (ERP) system and the
transactional data is shared with the company’s account-
ing and finance functions. In addition, Amazon.com
has built a multiterabyte data warehouse that imports its
transactional data and creates a decision support system
with a menu-based facility system of its own design.

Programs utilizing the data warehouse send personally
targeted promotional mailers to the company’s customers.

Amazon.com’s database includes hundreds of
individual tables. Among these are catalog tables listing
its millions of individual books and other products,
acustomer table with millions of records, personalization
tables, promotional tables, shopping-cart tables that
handle the actual purchase transactions, and order-history
tables. An order processing subsystem that determines
which fulfillment center to ship goods from uses tables that
keep track of product inventory levels in these centers.

held in Room 830 of Alumni Hall. In a commercial environment, it may be the fact
that employee John Baker’s employee number is 137; or it may be the fact that one
of a company’s suppliers, the Superior Products Co., is located in Chicago; or it
may be the fact that the refrigerator with serial number 958304 was manufactured
on November 5, 2004.

Actually, people have been interested in data for at least the past 12,000 years.
While today we often associate the concept of data with the computer, historically
there have been many more primitive methods of data storage and handling.

In the ancient Middle East, shepherds kept track of their flocks with pebbles,
Figure 1.1. As each sheep left its pen to graze, the shepherd placed one pebble in
a small sack. When all of the sheep had left, the shepherd had a record of how
many sheep were out grazing. When the sheep returned, the shepherd discarded one
pebble for each animal, and if there were more pebbles than sheep, he knew that
some of his sheep still hadn’t returned or were missing. This is, indeed, a primitive
but legitimate example of data storage and retrieval. What is important to realize
about this example is that the count of the number of sheep going out and coming
back in was all that the shepherd cared about in his ‘‘business environment’’ and
that his primitive data storage and retrieval system satisfied his needs.

Excavations in the Zagros region of Iran, dated to 8500 B.C., have unearthed
clay tokens or counters that we think were used for record keeping in primitive

F I G U R E 1.1
Shepherd using pebbles to
keep track of sheep

The History of Data 5

F I G U R E 1.2
Ancient clay tokens used to
record goods in transit

forms of accounting. Such tokens have been found at sites from present-day Turkey
to Pakistan and as far afield as the present-day Khartoum in Sudan, dating as long
ago as 7000 B.C. By 3000 B.C., in the present-day city of Susa in Iran, the use
of such tokens had reached a greater level of sophistication. Tokens with special
markings on them, Figure 1.2, were sealed in hollow clay vessels that accompanied
commercial goods in transit. These primitive bills of lading certified the contents
of the shipments. The tokens represented the quantity of goods being shipped and,
obviously, could not be tampered with without the clay vessel being broken open.
Inscriptions on the outside of the vessels and the seals of the parties involved
provided a further record. The external inscriptions included such words or concepts
as ‘‘deposited,’’ ‘‘transferred,’’ and ‘‘removed.’’

At about the same time that the Susa culture existed, people in the city-state
of Uruk in Sumeria kept records in clay texts. With pictographs, numerals, and
ideographs, they described land sales and business transactions involving bread,
beer, sheep, cattle, and clothing. Other Neolithic means of record keeping included
storing tallies as cuts and notches in wooden sticks and as knots in rope. The former
continued in use in England as late as the medieval period; South American Indians
used the latter.

Data Through the Ages

As in Susa and Uruk, much of thevery early interest in data can be traced to the rise
of cities. Simple subsistence hunting, gathering, and, later, farming had only limited
use for the concept of data. But when people live in cities they tend to specialize
in the goods and services they produce. They become dependent on one another,
bartering and using money to trade these goods and services for mutual survival.
This trade encouraged record keeping—the recording of data—to track how much
somone has produced and what it can be bartered or sold for.

6 C h a p t e r 1 Data: The New Corporate Resource

F I G U R E 1.3
New types of data with the
advance of civilization

BILL OF LADING

MARCH 2005

1 2 3 4 5

6 7 8 9 10 11 12

13 14 15 16 17 18 19

20 21 22 23 24 25 26

27 28 29 30 31

S M T W T F S

Family Tree

As time went on, more and different kinds of data and records were kept.
These included calendars, census data, surveys, land ownership records, marriage
records, records of church contributions, and family trees, Figure 1.3. Increasingly
sophisticated merchants had to keep track of inventories, shipments, and wage
payments in addition to production data. Also, as farming went beyond the
subsistence level and progressed to the feudal manor stage, there was a need
to keep data on the amount of produce to consume, to barter with, and to keep as
seed for the following year.

The Crusades took place from the late eleventh to the late thirteenth centuries.
One side effect of the Crusades was a broader view of the world on the part of the
Europeans, with an accompanying increase in interest in trade. A common method of
trade in that era was the establishment of temporary partnerships among merchants,
ships captains, and owners to facilitate commercial voyages. This increased level of
commercial sophistication brought with it another round of increasingly complex
record keeping, specifically, double-entry bookkeeping.

Double-entry bookkeeping originated in the trading centers of fourteenth-
century Italy. The earliest known example, from a merchant in Genoa, dates to the
year 1340. Its use gradually spread, but it was not until 1494, in Venice (about
25 years after Venice’s first movable type printing press came into use), that
a Franciscan monk named Luca Pacioli published his ‘‘Summa de Arithmetica,
Geometrica, Proportioni et Proportionalita’’ a work important in spreading the use
of double-entry bookkeeping. Of course, as a separate issue, the increasing use of
paper and the printing press furthered the advance of record keeping as well.

As the dominance of the Italian merchants declined, other countries became
more active in trade and thus in data and record keeping. Furthermore, as the use
of temporary trading partnerships declined and more stable long-term mercantile
organizations were established, other types of data became necessary. For example,
annual as opposed to venture-by-venture statements of profit and loss were needed.
In 1673 the ‘‘Code of Commerce’’ in France required every businessman to draw up
a balance sheet every two years. Thus the data had to be periodically accumulated
for reporting purposes.

The History of Data 7

Early Data Problems Spawn Calculating Devices

It was also in the seventeenth century that data began to prompt people to take
an interest in devices that could ‘‘automatically’’ process their data, if only in
a rudimentary way. Blaise Pascal produced one of the earliest and best known
such devices in France in the 1640s, reputedly to help his father track the data
associated with his job as a tax collector, Figure 1.4. This was a small box containing
interlocking gears that was capable of doing addition and subtraction. In fact, it was
the forerunner of today’s mechanical automobile odometers.

In 1805, Joseph Marie Jacquard of France invented a device that automatically
reproduced patterns used in textile weaving. The heart of the device was a series
of cards with holes punched in them; the holes allowed strands of material to
be interwoven in a sequence that produced the desired pattern, Figure 1.5. While
Jacquard’s loom wasn’t a calculating device as such, his method of storing fabric
patterns, a form of graphic data, as holes in punched cards was a very clever
means of data storage that would have great importance for computing devices to
follow. Charles Babbage, a nineteenth-century English mathematician and inventor,
picked up Jacquard’s concept of storing data in punched cards. Beginning in 1833,
Babbage began to think about an invention that he called the ‘‘Analytical Engine.’’
Although he never completed it (the state of the art of machinery was not developed
enough), included in its design were many of the principles of modern computers.
The Analytical Engine was to consist of a ‘‘store’’ for holding data items and a
‘‘mill’’ for operating upon them. Babbage was very impressed by Jacquard’s work
with punched cards. In fact, the Analytical Engine was to be able to store calculation
instructions in punched cards. These would be fed into the machine together with
punched cards containing data, would operate on that data, and would produce the
desired result.

F I G U R E 1.4
Blaise Pascal and his
adding machine Photo courtesy of IBM Archives

8 C h a p t e r 1 Data: The New Corporate Resource

F I G U R E 1.5
The Jacquard loom recorded
patterns in punched-cards Photo courtesy of IBM Archives

Swamped with Data

In the late 1800s, an enormous (for that time) data storage and retrieval problem and
greatly improved machining technology ushered in the era of modern information
processing. The 1880 U.S. Census took about seven years to compile by hand. With
a rapidly expanding population fueled by massive immigration, it was estimated that
with the same manual techniques, the compilation of the 1890 census would not be
completed until after the 1900 census data had begun to be collected. The solution
to processing census data was provided by a government engineer named Herman
Hollerith. Basing his work on Jacquard’s punched-card concept, he arranged to
have the census data stored in punched cards. He built devices to punch the holes
into cards and devices to sort the cards, Figure 1.6. Wire brushes touching the
cards completed circuits when they came across the holes and advanced counters.
The equipment came to be classified as ‘‘electromechanical,’’ ‘‘electro’’ because
it was powered by electricity and ‘‘mechanical’’ because the electricity powered
mechanical counters that tabulated the data. By using Hollerith’s equipment, the
total population count of the 1890 census was completed a month after all the data
was in. The complete set of tabulations, including data on questions that had never
before even been practical to ask, took two years to complete. In 1896, Hollerith
formed the Tabulating Machine Company to produce and commercially market his
devices. That company, combined with several others, eventually formed what is
today the International Business Machines Corporation (IBM).

Towards the turn of the century, immigrants kept coming and the U.S.
population kept expanding. The Census Bureau, while using Hollerith’s equipment,
continued experimenting on its own to produce even more advanced data-tabulating
machinery. One of its engineers, James Powers, developed devices to automatically
feed cards into the equipment and automatically print results. In 1911 he formed the
Powers Tabulating Machine Company, which eventually formed the basis for the

The History of Data 9

F I G U R E 1.6
Herman Hollerith and his
tabulator/sorter, circa 1890

UNIVAC division of the Sperry Corporation, which eventually became the Unisys
Corporation.

From the days of Hollerith and Powers through the 1940s, commercial data
processing was performed on a variety of electromechanical punched-card-based
devices. They included calculators, punches, sorters, collators, and printers. The data
was stored in punched cards, while the processing instructions were implemented as
collections of wires plugged into specially designed boards that in turn were inserted
into slots in the electromechanical devices. Indeed, electromechanical equipment
overlapped with electronic computers, which were introduced commercially in the
mid-1950s.

In fact, the introduction of electronic computers in the mid-1950s coincided
with a tremendous boom in economic development that raised the level of data
storage and retrieval requirements another notch. This was a time of rapid
commercial growth in the post-World War II U.S.A. as well as the rebuilding
of Europe and the Far East. From this time onward, the furious pace of new data
storage and retrieval requirements with more and more commercial functions and
procedures were automated and the technological advances in computing devices
has been one big blur. From this point on, it would be virtually impossible to
tie advances in computing devices to specific, landmark data storage and retrieval
needs. And there is no need to try to do so.

Modern Data Storage Media

Paralleling the growth of equipment to process data was the development of new
media on which to store the data. The earliest form of modern data storage was
punched paper tape, which was introduced in the 1870s and 1880s in conjunction
with early teletype equipment. Of course we’ve already seen that Hollerith in the
1890s and Powers in the early 1900s used punched cards as a storage medium. In

10 C h a p t e r 1 Data: The New Corporate Resource

Y O U R

T U R N

1.1 THE DeVELOPMENT OF DATA

The need to organize and store data
has arisen many times and in many ways throughout
history. In addition to the data-focused events presented in
this chapter, what other historical events can you think of
that have made people think about organizing and storing
data? As a hint, you might think about the exploration
and conquest of new lands, wars, changes in type of
governments such as the introduction of democracy, and

the implications of new inventions such as trains, printing
presses, and electricity.

QUESTION:
Develop a timeline showing several historical events that

influenced the need to organize and store data. Include
a few noted in this chapter as well as a few that you
can think of independently.

fact, punched cards were the only data storage medium used in the increasingly
sophisticated electromechanical accounting machines of the 1920s, 1930s, and
1940s.They were still used extensively in the early computers of the 1950s and
1960s and could even be found well into the 1970s in smaller information systems
installations, to a progressively reduced degree.

The middle to late 1930s saw the beginning of the era of erasable magnetic
storage media, with Bell Laboratories experimenting with magnetic tape for sound
storage. By the late 1940s, there was early work on the use of magnetic tape for
recording data. By 1950, several companies, including RCA and Raytheon, were
developing the magnetic tape concept for commercial use. Both UNIVAC and
Raytheon offered commercially available magnetic tape units in 1952, followed by
IBM in 1953, Figure 1.7. During the mid-1950s and into the mid-1960s, magnetic

F I G U R E 1.7
Early magnetic tape drive,
circa 1953

The History of Data 11

tape gradually became the dominant data-storage medium in computers. Magnetic
tape technology has been continually improved since then and is still in limited use
today, particularly for archived data.

The original concept that eventually grew into the magnetic disk actually
began to be developed at MIT in the late 1930s and early 1940s. By the early 1950s,
several companies including UNIVAC, IBM, and Control Data had developed
prototypes of magnetic ‘‘drums’’ that were the forerunners of magnetic disk
technology. In 1953, IBM began work on its 305 RAMAC (Random Access
Memory Accounting Machine) fixed disk storage device. By 1954 there was a
multi-platter version, which became commercially available in 1956, Figure 1.8.

During the mid-1960s a massive conversion from tape to magnetic disk as
the preeminent data storage medium began and disk storage is still the data storage
medium of choice today. After the early fixed disks, the disk storage environment
became geared towards the removable disk-pack philosophy, with a dozen or more
packs being juggled on and off a single drive as a common ratio. But, with the
increasingly tighter environmental controls that fixed disks permitted, more data per
square inch (or square centimeter) could be stored on fixed disk devices. Eventually,
the disk drives on mainframes and servers, as well as the fixed disks or ‘‘hard
drives’’ of PCs, all became non-removable, sealed units. But the removable disk
concept stayed with us a while in the form of PC diskettes and the Iomega Corp.’s
Zip Disks, and today in the form of so-called external hard drives that can be easily
moved from one computer to another simply by plugging them into a USB port.
These have been joined by the laser-based, optical technology compact disk (CD),
introduced as a data storage medium in 1985. Originally, data could be recorded
on these CDs only at the factory and once created, they were non-erasable. Now,
data can be recorded on them, erased, and re-recorded in a standard PC. Finally,
solid-state technology has become so miniaturized and inexpensive that a popular
option for removable media today is the flash drive.

F I G U R E 1.8
IBM RAMAC disk
storage device, circa 1956

12 C h a p t e r 1 Data: The New Corporate Resource

DATA IN TODAY’S INFORMATION SYSTEMS ENVIRONMENT

Using Data for Competitive Advantage

Today’s computers are technological marvels. Their speeds, compactness, ease of
use, price as related to capability, and, yes, their data storage capacities are truly
amazing. And yet, our fundamental interest in computers is the same as that of the
ancient Middle-Eastern shepherds in their pebbles and sacks: they are the vehicles
we need to store and utilize the data that is important to us in our environment.

Indeed, data has become indispensable in every kind of modern business
and government organization. Data, the applications that process the data, and
the computers on which the applications run are fundamental to every aspect of
every kind of endeavor. When speaking of corporate resources, people used to
list such items as capital, plant and equipment, inventory, personnel, and patents.
Today, any such list of corporate resources must include the corporation’s data. It
has even been suggested that data is the most important corporate resource because
it describes all of the others.

Data can provide a crucial competitive advantage for a company. We
routinely speak of data and the information derived from it as competitive weapons
in hotly contested industries. For example, FedEx had a significant competitive
advantage when it first provided access to its package tracking data on its Web
site. Then, once one company in an industry develops a new application that takes
advantage of its data, the other companies in the industry are forced to match it to
remain competitive. This cycle continually moves the use of data to ever-higher
levels, making it an ever more important corporate resource than before. Examples
of this abound. Banks give their customers online access to their accounts. Package
shipping companies provide up-to-the-minute information on the whereabouts of
a package. Retailers send manufacturers product sales data that the manufacturers
use to adjust inventories and production cycles. Manufacturers automatically send
their parts suppliers inventory data and expect the suppliers to use the data to keep
a steady stream of parts flowing.

Problems in Storing and Accessing Data

But being able to store and provide efficient access to a company’s data while also
maintaining its accuracy so that it can be used to competitive advantage is anything

Y O U R
T U R N

1.2 DATA AS A COMPETITIVE WEAPON

Think about a company with which
you or your family regularly does business. This might be
a supermarket, a department store, or a pharmacy, as
examples. What kind of data do you think they collect
about their suppliers, their inventory, their sales, and their
customers? What kind of data do you think they should
collect and how do you think they might be able to use it
to gain a competitive advantage?

QUESTION:
Choose one of the companies that you or your family

does business with and develop a plan for the kinds
of data it might collect and the ways in which it might
use the data to gain a business advantage over its
competitors.

Data in Today’s Information Systems Environment 13

but simple. In fact, several factors make it a major challenge. First and foremost,
the volume or amount of data that companies have is massive and growing all
the time. Walmart estimates that its data warehouse (a type of database we will
explore later) alone contains hundreds of terabytes (trillions of characters) of data
and is constantly growing. The number of people who want access to the data is
also growing: at one time, only a select group of a company’s own employees were
concerned with retrieving its data, but this has changed. Now, not only do vastly
more of a company’s employees demand access to the company’s data but also so
do the company’s customers and trading partners. All major banks today give their
depositors Internet access to their accounts. Increasingly tightly linked ‘‘supply
chains’’ require that companies provide other companies, such as their suppliers and
customers, with access to their data. The combination of huge volumes of data and
large numbers of people demanding access to it has created a major performance
challenge. How do you sift through so much data for so many people and give them
the data that they want in an acceptably small amount of time? How much patience
would you have with an insurance company that kept you on the phone for five or
ten minutes while it retrieved claim data about which you had a question? Of course,
the tremendous advances in computer hardware, including data storage hardware,
have helped—indeed, it would have been impossible to have gone as far as we have
in information systems without them. But as the hardware continues to improve,
the volumes of data and the number of people who want access to it also increase,
making it a continuing struggle to provide them with acceptable response times.

Other factors that enter into data storage and retrieval include data security,
data privacy, and backup and recovery. Data security involves a company protecting
its data from theft, malicious destruction, deliberate attempts to make phony changes
to the data (e.g. someone trying to increase his own bank account balance), and even
accidental damage by the company’s own employees. Data privacy implies assuring
that even employees who normally have access to the company’s data (much less
outsiders) are given access only to the specific data they need in their work. Put
another way, sensitive data such as employee salary data and personal customer
data should be accessible only by employees whose job functions require it. Backup
and recovery means the ability to reconstruct data if it is lost or corrupted, say in
a hardware failure. The extreme case of backup and recovery is known as disaster
recovery when an information system is destroyed by fire, a hurricane, or other
calamity.

Another whole dimension involves maintaining the accuracy of a company’s
data. Historically, and in many cases even today, the same data is stored several,
sometimes many, times within a company’s information system. Why does this
happen? For several reasons. Many companies are simply not organized to share
data among multiple applications. Every time a new application is written, new data
files are created to store its data. As recently as the early 1990s, I spoke to a database
administration manager (more on this type of position later) in the securities industry
who told me that one of the reasons he was hired was to reduce duplicate data
appearing in as many as 60–70 files! Furthermore, depending on how database files
are designed, data can even be duplicated within a single file. We will explore this
issue much more in this book, but for now, suffice it to say that duplicate data, either
in multiple files or in a single file, can cause major data accuracy problems.

Data as a Corporate Resource

Every corporate resource must be carefully managed so that the company can
keep track of it, protect it, and distribute it to those people and purposes in the

14 C h a p t e r 1 Data: The New Corporate Resource

company that need it. Furthermore, public companies have a responsibility to
their shareholders to competently manage the company’s assets. Can you imagine
a company’s money just sort of out there somewhere without being carefully
managed? In fact, the chief financial officer with a staff of accountants and financial
professionals is responsible for the money, with outside accounting firms providing
independent audits of it. Typically vice presidents of personnel and their staffs are
responsible for the administrative functions necessary to manage employee affairs.
Production managers at various levels are responsible for parts inventories, and so
on. Data is no exception.

But data may just be the most difficult corporate resource to manage. In data,
we have a resource of tremendous volume, billions, trillions, and more individual
pieces of data, each piece of which is different from the next. And it has the
characteristic that much of it is in a state of change at any one time. It’s not as if
we’re talking about managing a company’s employees. Even the largest companies
have only a few hundred thousand of them, and they don’t change all that frequently.
Or the money a company has: sure, there is a lot of it, but it’s all the same in the
sense that a dollar that goes to payroll is the same kind of dollar that goes to paying
a supplier for raw materials.

As far back as the early to mid-1960s, barely ten years after the introduction
of commercially viable electronic computers, some forward-looking companies
began to realize that storing each application’s data separately, in simple files, was
becoming problematic and would not work in the long run, for just the reasons
that we’ve talked about: the increasing volumes of data (even way back then), the
increasing demand for data access, the need for data security, privacy, backup,
and recovery, and the desire to share data and cut down on data redundancy.
Several things were becoming clear. The task was going to require both a new
kind of software to help manage the data and progressively faster hardware to
keep up with the increasing volumes of data and data access demands. And
data-management specialists would have to be developed, educated, and made
responsible for managing the data as a corporate resource.

Out of this need was born a new kind of software, the database management
system (DBMS), and a new category of personnel, with titles like database
administrator and data management specialist. And yes, hardware has progressively
gotten faster and cheaper for the performance it provides. The integration of these
advances adds up to much more than the simple sum of their parts. They add up to
the database environment.

The Database Environment

Back in the early 1960s, the emphasis in what was then called data processing was on
programming. Data was little more than a necessary afterthought in the application
development process and in running the data-processing installation. There was a
good reason for this. By today’s standards, the rudimentary computers of the time
had very small main memories and very simplistic operating systems. Even relatively
basic application programs had to be shoehorned into main memory using low-level
programming techniques and a lot of cleverness. But then, as we progressed further
into the 1960s and beyond, two things happened simultaneously that made this
picture change forever. One was that main memories became progressively larger
and cheaper and operating systems became much more powerful. Plus, computers

Summary 15

progressively became faster and cheaper on a price/performance basis. All these
changes had the effect of permitting the use of higher-level programming languages
that were easier for a larger number of personnel to use, allowing at least some of
the emphasis to shift elsewhere. Well, nature hates a vacuum, and at the same time
that all of this was happening, companies started becoming aware of the value of
thinking of data as a corporate resource and using it as a competitive weapon.

The result was the development of database management systems (DBMS)
software and the creation of the ‘‘database environment.’’ Supported by ever-
improved hardware and specialized database personnel, the database environment
is designed largely to correct all the problems of the non-database environment.
It encourages data sharing and the control of data redundancy with important
improvements in data accuracy. It permits storage of vast volumes of data with
acceptable access and response times for database queries. And it provides the tools
to control data security, data privacy, and backup and recovery.

This book is a straightforward introduction to the fundamentals of database
in the current information systems environment. It is designed to teach you the
important concepts of the database approach and also to teach you specific skills, such
as how to design relational databases, how to improve database performance, and
how to retrieve data from relational databases using the SQL language. In addition,
as you proceed through the book you will explore such topics as entity-relationship
diagrams, object-oriented database, database administration, distributed database,
data warehousing, Internet database issues, and others.

We start with the basics of database and take a step-by-step approach to
exploring all the various components of the database environment. Each chapter
progressively adds more to an understanding of both the technical and managerial
aspects of the field. Database is avery powerful concept. Overall it provides ingenious
solutions to a set of very difficult problems. As a result, it tends to be a multifaceted
and complex subject that can appear difficult when one attempts to swallow it in
one gulp. But database is approachable and understandable if we proceed carefully,
cautiously, and progressively step by step. And this is an understanding that no one
involved in information systems can afford to be without.

SUMMARY

Recognition of the commercial importance of data, of storing it, and of retrieving
it can be traced back to ancient times. As trade routes lengthened and cities grew
larger, data became increasingly important. Eventually, the importance of data led
to the development of electromechanical calculating devices and then to modern
electronic computers, complete with magnetic and optical disk-based data storage
media.

While the use of data has given many companies a competitive advantage in
their industries, the storage and retrieval of today’s vast amounts of data holds many
challenges. These include speedy retrieval of data when many people try to access
the data at the same time, maintaining the accuracy of the data, the issue of data
security, and the ability to recover the data if it is lost.

The recognition that data is a critical corporate resource and that managing data
is a complex task has led to the development and continuing refinement of specialized
software known as database management systems, the subject of this book.

16 C h a p t e r 1 Data: The New Corporate Resource

KEY TERMS

Balance sheet
Barter
Calculating devices
Census
Compact disk
Competitive advantage
Corporate resource
Data
Data storage

Database
Database environment
Database management system
Disk drive
Double-entry bookkeeping
Electromechanical equipment
Electronic computer
Flash drive
Information processing

Magnetic disk
Magnetic drum
Magnetic tape
Optical disk
Punched cards
Punched paper tape
Record keeping
Tally
Token

QUESTIONS

1. What did the Middle Eastern shepherds’ pebbles and
sacks, Pascal’s calculating device, and Hollerith’s
punched-card devices all have in common?

2. What did the growth of cities have to do with the
need for data?

3. What did the growth of trade have to do with the
need for data?

4. What did Jacquard’s textile weaving device have to
do with the development of data?

5. Choose what you believe to be the:
a. One most important
b. Two most important
c. Three most important landmark events in the

history of data. Defend your choices.

6. Do you think that computing devices would have
been developed even if specific data needs had not
come along? Why or why not?

7. What did the need for data among ancient Middle
Eastern shepherds have in common with the need
for data of modern corporations?

8. List several problems in storing and accessing data
in today’s large corporations. Which do you think is
the most important? Why?

9. How important an issue do you think data accuracy
is? Explain.

10. How important a corporate resource is data com-
pared to other corporate resources? Explain.

11. What factors led to the development of database
management systems?

EXERCISES

1. Draw a timeline showing the landmark events in
the history of data from ancient times to the present
day. Do not include the development of computing
devices in this timeline.

2. Draw a timeline for the last four hundred years
comparing landmark events in the history of data to
landmark events in the development of computing
devices.

3. Draw a timeline for the last two hundred years
comparing the development of computing devices
to the development of data storage media.

4. Invent a fictitious company in one of the following
industries and list several ways in which the
company can use data to gain a competitive
advantage.

a. Banking
b. Insurance
c. Manufacturing
d. Airlines

5. Invent a fictitious company in one of the following
industries and describe the relationship between
data as a corporate resource and the company’s
other corporate resources.
a. Banking
b. Insurance
c. Manufacturing
d. Airline

Minicases 17

MINICASES

1. Worldwide, vacation cruises on increasingly larger ships
have been steadily growing in popularity. People like the
all-inclusive price for food, room, and entertainment, the
variety of shipboard activities, and the ability to unpack
just once and still visit several different places. The
first of the two minicases used throughout this book is
the story of Happy Cruise Lines. Happy Cruise Lines
has several ships and operates (begins its cruises) from
a number of ports. It has a variety of vacation cruise
itineraries, each involving several ports of call. The
company wants to keep track of both its past and future
cruises and of the passengers who sailed on the former
and are booked on the latter. Actually, you can think of
a cruise line as simply a somewhat specialized instance
of any passenger transportation company, including
airlines, trains, and buses. Beyond that, a cruise line
is, after all, a business and like any other business of any
kind it must be concerned about its finances, employees,
equipment, and so forth.
a. Using this introductory description of (and hints

about) Happy Cruise Lines, make a list of the things
in Happy Cruise Lines’ business environment about
which you think the company would want to maintain
data. Do some or all of these qualify as ‘‘corporate
resources?’’ Explain.

b. Develop some ideas about how the data you identified
in part a above can be used by Happy Cruise Lines to
gain a competitive advantage over other cruise lines.

2. Sports are universally enjoyed around the globe.
Whether the sport is a team or individual sport, whether
a person is a participant or a spectator, and whether

the sport is played at the amateur or professional
level, one way or another this kind of activity can be
enjoyed by people of all ages and interests. Furthermore,
professional sports today are a big business involving
very large sums of money. And so, the second of
the two minicases to be used throughout this book is
the story of the professional Super Baseball League.
Like any sports league, the Super Baseball League
wants to maintain information about its teams, coaches,
players, and equipment, among other things. If you are
not particularly familiar with baseball or simply prefer
another sport, bear in mind that most of the issues
that will come up in this minicase easily translate to
any team sport at the amateur, college, or professional
levels. After all, all team sports have teams, coaches,
players, fans, equipment, and so forth. When specialized
equipment or other baseball-specific items come up, we
will explain them.
a. Using this introductory description of (and hints

about) the Super Baseball League, list the things in
the Super Baseball League’s business environment
about which you think the league would want to
maintain data. Do some or all of these qualify as
‘‘corporate resources,’’ where the term is broadened
to include the resources of a sports league? Explain.

b. Develop some ideas about how the data that you
identified in part a above can be used by the Super
Baseball League to gain a competitive advantage
over other sports leagues for the fans’ interest and
entertainment dollars (Euros, pesos, yen, etc.)