Chapter 9 Enabling the organization-Decision making

Office Automation Systems (OAS)

1. Communication: facilitate communication email, fax, etc. -> MS Outlook 2. Data Capture & Recording -> MS Office 3. Collaboration: supporting group work -> groupware

AI Systems

1. Expert System 2. Neural Networks 3. Genetic Algorithms 4. Intelligent Agents 5. Virtual Reality

Managerial Decision-Making Challenges

1. Managers need to analyze large amounts of information. 2. Managers must make decisions quickly. 3. Managers must apply sophisticated analysis techniques, such as Porter's strategies or forecasting, to make strategic decision.

Operational Sub-levels

1. Operational II (top half): refers to previous operational level 2. Operational I (bottom half): Office Automation Systems (OAS)

Decision-Making Process

1. Problem Identification 2. Data Collection 3. Solution Generation 4. Solution Test 5. Solution Selection 6. Solution Implementation

Digital Dashboard

A common tool that supports visualization. Tracks KPIs and CSFs by compiling information from multiple sources and tailoring it to meet user need.

Virtual Reality

A computer-simulated environment that can be a simulation of the real world or an imaginary world.

Fuzzy Logic

A mathematical method of handling imprecise or subjective information. The basic approach is to assign values between 0 and 1 to vague or ambiguous information.

Benchmarking

A process of continuously measuring system results, comparing those result to optimal system performance (benchmark values), and identifying steps and procedures to improve system performance.

Sensitivity Analysis

A special case of what-if analysis, is the study of the impact on other variables when one variable is changed repeatedly.

Intelligent Agent

A special-purpose knowledge-based information system that accomplishes specific tasks on behalf if it's users.

Executive Information System (EIS)

A specialized DSS that supports senior-level executives and unstructured, long-term, non routine decisions requiring judgment, evaluation, and insight.

Project

A temporary activity a company undertakes to create an unique product, service, or result.

Operational Analysis

An extension of goal-seeking analysis, finds the optimum value for a target variable by repeatedly changing other variables subject to specific constraints.

Structured Decisions

Arise in situations where established processes offer potential solutions. Made frequently, are repetitive, and affect short-term business strategies. Are considered operational decisions.

Neural Network

Attempts to emulate the way the human brain works. Analyze large quantities of information to establish patterns and characteristics in situations where the logic or rules are unknown. Examples: credit card companies checking for fraud.

Benchmarks

Baseline values the system seeks to attain.

What-If Analysis

Checks the impact of a change in a variable or assumption on the model.

Expert Systems

Computerized advisory programs that imitate the reasoning processes of experts in solving difficult problems. Examples: playing chess, assisting in medical diagnosis.

Critical Success Factors (CSFs)

Crucial steps companies perform to achieve their goals and objectives and implement their strategies. - Create high-quality products - Retain competitive advantages - Reduce product costs - Increase customer satisfaction - Hire and retain the best business professionals

Managerial Level

Employees are continuously evaluating company operations to hone the firm's ability to identify, adapt to, and leverage change. Covers short to medium-range plans, schedules, and budgets along with policies, procedures, and business objectives for the firm.

Operational Level

Employees develop, control and maintain core business activities required to run the day-to-day operations. Very structured decisions.

Drill-Down

Enables users to view details, and details of details, of information

Analytical Information

Encompasses all organizational information, and it's primary purpose is to support the performance of managerial analysis or semi structured decisions. Includes: transactional information along with other information such as market and industry information.

Transactional Information

Encompasses all the information contained within a single business process or unit of work, and it's primary purpose is to support the performance of daily operational or structured decisions.

Goal-Seeking Analysis

Finds the inputs necessary to achieve a goal such as a desired level of output. Sets a target value for a variable and then repeatedly changes other variables until the target value is achieved.

Return on Investment (ROI)

Indicates the earning power of a project. Internal KPI. = profitability of project/costs

____ decisions cover short- and medium-range plans, schedules, and budgets along with policies, procedures, and business objectives for a firm and also allocate resources and monitor the performance of organizational subunits.

Managerial

Strategic Level

Managers develop overall business strategies, goals, and objectives as part of the company's strategic plan. They monitor strategic performance of the organization and its overall direction in the political, economic, and competitive business environment.

Effectiveness MIS Metrics

Measure the impact MIS has on business processes and activities, including usability, customer satisfaction, conversion rate am and financial.

Efficiency MIS metrics

Measure the performance of MIS itself, such as throughput, transaction speed, system availability, information accuracy, and response time.

Metrics

Measurements that evaluate results to determine whether a project is meeting its goals. 1. Critical Success Factors (CSFs) 2. Key Performance Indicators (KPIs)

Genetic Algorithms

Mimics the evolutionary, survival-of-the-fittest process to generate increasingly better solutions to a problem. It finds the combination of inputs that gives the best outputs.

Decision Support Systems (DSS)

Model information using OLAP, which provides assistance in evaluating and choosing almond different courses of action.

Semistructured Decisions

Occur in situations in which few established processes help to evaluate potential problems, solutions, but not enough to lead to a definite recommended decisions.

Unstructured Decisions

Occurring in situations in which no procedures or rules exist to guide decision makers toward the correct choice. Infrequent, extremely important, and typically related to long-term business strategies.

Market Share

Portion of the market that a firm captures. External KPI. = firm's sakes/total market sales

List the steps in the decision-making process.

Problem Identification Data collection Solution generation Solution Generation Solution test Solution Selection Solution Implementation

Match the step in the decision-making process on the left with the correct definition on the right.

Problem identification: Define the problem as clearly and precisely as possible. Data collection: Gather problem-related data, including who, what, where, when, why, and how. Be sure to gather facts, not rumors or opinions about the problem. Solution generation: Detail every solution possible, including ideas that seem farfetched. Solution test: Evaluate solutions in terms of feasibility (can it be completed?), suitability (is it a permanent or a temporary fix?), and acceptability (can all participants form a consensus?).

Visualization

Produces graphical displays of patterns and complex relationships in large amounts of data.

Key Performance Indicators (KPIs)

Quantifiable metrics a company uses to evaluate progress toward critical success factors. Focus on internal (return on investment) & external (market share) measurements. - Turnover rates of employees - Percentage of help desk calls answered in the first minute - Number of product returns - Number of new customers - Average customer spending

Granularity

Refers to the level of detail in the model or the decision-making process.

Model

Simplified representation or abstraction of reality.

Artificial Intelligence (AI)

Simulates human thinking and behavior, such as the ability to reason and learn. It's ultimate goal is to build a system that can mimic human intelligence.

Shopping Bot

Software that will search several retailer websites and provide a comparison of each retailer's offerings including price and availability. Handle majority of a company's internet buying and selling and complete such processes as finding products, bargaining over prices and executing transactions.

Operational decisions are considered __________ decisions, which arise in situations where established processes offer potential solutions.

Structured

Which decisions arise in situations where established processes offer potential solutions?

Structured

Slice-and-Dice

The ability to look at information from different perspectives.

Consolidation

The aggregation of data from simple roll-ups to complex grouping of interrelated information.

Transaction Processing System (TPS)

The basic business system that serves the operational level (analysts) and assists in making structures decisions.

Online Transaction Processing (OLTP)

The capture of transaction and event information using technology to: 1. Process the information according to defined business rules 2. Store information 3. Update existing information to reflect the new information (During this process, the organization must capture every detail of transactions and events)

Online Analytical Processing (OLAP)

The manipulation of information to create business intelligence tin support of strategic decision making.

Best Practices

The most successful solution or problem-solving method that have been developed by a specific organization or industry.

Source Documents

The original transaction record

Mutation

The process within the genetic algorithm of randomly trying combinations and evaluating the success (or failure) of the outcome.

Decision-Making Essentials

The structure of a typical organization is similar to a pyramid, and the different levels require different types of information to assist in decision making, problem solving, and opportunity capturing. 1. Strategic (top of pyramid) 2. Managerial (middle of pyramid) 3. Operational (base of pyramid)

Decisions range from routine choices, such as how many items to order or how many people to hire, to unexpected ones such as what to do if a key employee suddenly quits or needed materials do not arrive. Today, with massive volumes of information available, managers are challenged to make highly complex decisions—some involving far more information than the human brain can comprehend—in increasingly shorter time frames.

True

Intelligent Systems

Various commercial applications of artificial intelligence.

Augmented Reality

Viewing if the physical world with computer-generated layers of information added to it.

At the _________ level, employees are continuously evaluating company operations to hone the firm's abilities to identify, adapt to, and leverage change.

managerial

Deep Learning

process that employs specialized algorithms to model and study complex datasets; the method is also used to establish relationships among data and datasets.

The structure of a typical organization is similar to a __________, and the different levels require different types of information to assist in decision making, problem solving, and opportunity capturing.

pyramid