Chapter 2 - Decision Support Systems

3 Managerial Decision-Making challenges

1. Managers need to analyze large amounts of information 2. Managers must make decisions quickly 3. Managers must apply sophisticated techniques (ie porters strategies or forecasting) to make strategic decisions.

Decision making process

1. Problem identification 2. data collection 3. solution generation 4. solution test 5. solution selection 6. solution implementation

Managerial

Employees are continuously evaluating company operations to hone the firm's ability to adapt to and leverage change. These decisons are semi-structured, as they occur in situations which have few established processes.

Operational Decisions

Employees develop, control, and maintain core business activities required to run day to day operations. These decisions are structured decisions, which arise when establishes processes offer potential solutions. Eg. reordering inventory, managing employee shifts.

Strategic

Managers develop overall business strategies, goals, objectives as part of the company strategic plan. These decisions are unstructured, meaning no procedures or rules exist to guide decision makers.

neural network

a catagory of AI that attempts to emulate the way the human brain works

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.

Business process patent

a patent that protects a specific set of procedures for conducting a particular business activity.

Intelligent agent

a special purpose, knowledge based information system that accomplishes specific tasks on behalf of it's users. Ie shopping bot.

executive information system (EIS)

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

project

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

Virtual workplace

a work environment that is not located in any one physical space. Usually in a network of several places.

Customer-facing processes

aka front office processes, result in a product or service received by an organizations external customer. Includes fulfilling orders, communicating with customers, and sending bills.

genetic algorithm

an artificial intelligence system that mimics evolutionary, survival of the fittest process to generate increasingly better solutions to a problem. Essentially an optimizing system

Transaction Processing system (TPS)

basic business system that serves the operational level and assists in making structured decisions.

core processes

business processes (ie manufacturing) that make up primary activites in a value chain

Online transaction Processing (OLTP)

capture of transaction and eventinformation using technology to 1. process information according to defined business rules. 2. store information. 3. update existing information to reflect new info.

market share

common external KPI. The proportion of the market that a firm captures. Sales/Total market sales.

Return on Investment (ROI)

common internal KPI. Indicates the earning power of a project. Profitiablilty/costs.

expert systems

computerized advisory programs that imitate the reasoning processes of experts in solving difficult problems. Include knowledge base containing various accumulated experience and set of rules for applying knowledge base.

dynamic process

continuosuly changing and provides business solutions to ever changing business operations

Analytical information

encompasses all organizational information, and it's primary purpose is to support the performance of managerial analysis or semistructured decision.

Transactional Information

encompasses all the information contaied within a single business process or unit of work. Managers use transactional information when making structured decisions at the operagtional level.

Business-facing processes

invisible to external customers but essential to the effective management of the business. They include goal setting, day to day planning, giving performance feedback and allocating resources.

Online Analytical processing (OLAP)

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

Effectiveness MIS metrics

measure the impact MIS has on business processes and activities, including customer satisfaction and customer conversion rates. Focuses on how well a firm is achiveing its goals and objectives.

metrics

measurements that evaluate results to determine whether a project is meeting its goals.

Efficiency MIS metrics

measures the performance of MIS itself, such as throughput, transaction speed and system availability. Focuses on the extent to which a firm is using its resources in an optimal way.

Decision support system (DSSs)

model information using OLAP which provides assistance in evaluating and choosing among different courses of action.DSSs enable high level managers to examine and manipulate large amounts of detailed data from different internal and external sources.

source documents

original transaction record.

Benchmarking

process of continuously measuring system results, comparing results to optimal system performance, and identifying steps and procedures to improve system performance.

Mutation

process within a genetic algorithm of randomly trying combinations and evaluating the success of the outcome

Visualization

produces graphical displays of patterns and complex relationships in large amounts of data. Deliver info at a glance.

Key Performance Indicators (KPIs)

quantifiable metrics acompany uses to evaluate progress toward critical success factors. More specific than CSF.

Model

simplified representation or abstraction of reality. Help managers calculate risks, understand uncertainty, change variables, and manipulate time to make decisions.

artificial intelligent (AI)

stimulates human thinking and behavior, such as the ability to reason and learn. Goal is to build a system that can mimic human intelligence.

Critical success factors (CSFs)

the crucial steps companies perform to achieve their goals and onjectives and implement their strategy.

Granularity

the level of detail in the model or the decision making process

digital dashboard

tracks KPI's and CSFs by compling information from multiple sources and tailoring it to meet user needs.

static processes

uses a systematic approach in an attempt to improve business effectiveness and efficiency continuously

haptic interface

uses technology allowing humans to interact with a computer through bodily sensations and movements.

intelligent systems

various commercial applications of artificial intelligence

Augmented Reality

veiwing of the physical world with computer-generated laters of information added to it. Ie google glass.