Chapter 12 Business Analytics
Three basic roles that all mangers perform
1. Interpersonal roles: Figurehead, leader, liaison 2. Informational roles: Monitor, disseminator, spokesperson, analyzer 3. Decisional roles: Entrepreneur, disturbance handler, resource allocator, negotiator.
Three major phases of decision making
1. intelligence: phase in which managers examine a situation and then identify and define the problem or opportunity. 2. design: decision makers construct a model for addressing the situation. 3. choice: involves selecting a solution or course of action that seems best suited to resolve the problem.
nature of decisions
1. operational control: executing specific tasks efficiently and effectively 2. management control: acquiring and using resources efficiently in accomplishing organizational goals 3. strategic planning: the long-range goals and policies for growth and resource allocation
Trends that make decision making difficult
1. the number of alternatives is constantly increasing because of innovations in technology, improved communications, the development of global market, and the use of the internet and e-business. 2. most decisions must be made under time pressure. It is often not possible to manually process information fast enough to be effective. 3. because of increased uncertainty in the decision environment, decisions are becoming more complex. It is usually necessary to conduct a sophisticated analysis to make a good decision. 4. It often is necessary to rapidly access remote information, consult with experts, or conduct a group decision-making session, all without incurring major expenses. information can also be situated in different locations. Bringing everything together quickly and inexpensively represents a serious challenge.
business intelligence (BI)
A broad category of applications, technologies, and processes for gathering, storing, accessing, and analyzing data to help business users make more informed decisions.
dashboard
A business analytics presentation tool that provides rapid access to timely information and direct access to management reports.
decision
A choice that individuals and groups make among two or more alternatives.
geographic information system (GIS)
A computer-based system for capturing, integrating, manipulating, and displaying data using digitized maps.
management
A process by which organizational goals are achieved through the use of resources.
online analytical processing (OLAP)
A set of capabilities for "slicing and dicing" data using dimensions and measures associated with the data.
predictive analytics
A type of business analytics that examines recent and historical data in order to detect patterns and predict future outcomes and trends.
prescriptive analytics
A type of business analytics that recommends one or more courses of action and shows the likely outcome of each decision.
descriptive analytics
A type of business analytics that summarize what has happened in the past and allow decision makers to learn from past behaviors.
decision support systems (DSSs)
Business intelligence systems that combine models and data in an attempt to solve semi-structured and some unstructured problems with extensive user involvement.
multi-dimensional data analysis
See online analytical processing (OLAP).
business analytics (BA)
The process of developing actionable decisions or recommendations for actions based on insights generated from historical data.
data mining
The process of searching for valuable business information in a large database, data warehouse, or data mart.
productivity
The ratio between the inputs to a process and the outputs form that process.
affinity analysis
affinity analysis is a data mining application that discovers co-occurrence relationships among activities performed by specific individuals or groups.
what-if analysis
attempts to predict the impact of changes in the assumptions (input data) on the proposed solution.
security analysis
examines how sensitive an output is to any change in an input while keeping other inputs constant.
market basket analysis
market basket analysis is when retailers seek to understand the purchase behavior of customers.
data visualization
organizations use presentation tools to present the results of analyses to users in visual formats such as charts, graphs, figures, and tables. this process, known as data visualizations, makes results more attractive and understandable to users.
goal-seeking analysis
represents a "backward" solution approach. goal seeking attempts to calculate the value of the inputs necessary to achieve a desired level of output.
problem structure
structured decisions deal with routine and repetitive problems for which standard solutions exist, such as inventory control. unstructured decisions are intended to deal with "fuzzy," complex problems for which there are no cut-and-dried solutions. semi-structured decisions require a combination of standard solution procedures and individual judgment.
data reduction
the transformation of numerical or alphabetical digital information derived empirically or experimentally into a corrected, ordered, and simplified form.