MIS Terms Chapter 2

Three Primary 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 decisions.

Six-Step Decision-Making Process

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

Neural Network

A category of AI that attempts to emulate the way the human brain works. They analyze large quantities of information to establish patterns and characteristics in situations where the logic or rules are unknown.

Business Process Model

A graphic description of a process, showing the sequence of process tasks, which is developed for a specific purpose and from a selected viewpoint.

Business Process Patent

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

Benchmarking

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

Model

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

Sensitivity Analysis

A special case of what-if analysis, its the study of the impact on other variables when one variable is changed repeatedly. Useful when users are uncertain about the assumptions made in estimating the value of certain key variables.

Intelligent Agent

A special-purpose knowledge-based information system that accomplishes specific tasks on behalf of its users.

Executive Information System (EIS)

A specialized DSS that supports senior-level executives and unstructured, long-term, nonroutine decisions requiring judgment, evaluation, and insight. There is no right or wrong answer, only effective and efficient answers.

Digital Dashboards

A tool that supports visualization, which tracks KPIs and CSFs by compiling information from multiple sources and tailoring it to meet user needs.

Market Share

An external KPI. The proportion of the market that a firm captures. Calculated by dividing the firm's sales by the total market sales for the entire industry.

Return On Investment (ROI)

An internal KPI. The earning power of a project. Measured by dividing the profitability of a project by the costs.

Generic Algorithm

Artificial Intelligence system that mimics the evolutionary, survival-of-the-fittest process to generate increasingly better solutions to a problem.

Business Process Improvement

Attempts to understand and measure the current process and make performance improvements accordingly.

Core Processes

Business processes, such as manufacturing goods, selling products, and providing service, that make up the primary activities in a value chain.

What-If Analysis

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

Virtual Reality

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

Expert Systems

Computerized advisory programs that imitate the reasoning processes of experts in solving difficult problems. Include a knowledge base containing various accumulated experience and a set of rules for applying the knowledge base to each particular situation.

Managers must apply sophisticated analysis techniques, such as Porter's strategies or forecasting, to make strategic decisions

Due to the intensely competitive global business environment, companies must offer far more than just a great product to succeed.

Managerial Level

Employees are continuously evaluating company operations to hone the firm's abilities to identify, adapt to, and leverage change. Employee Types: Middle Management, managers, directors Focus: Internal, cross-functional, (sometimes external) Time Frame: Short term, daily, monthly, yearly Decision Types: Semistructured, ad hoc (unplanned) reporting. MIS Requirements: Business Intelligence Metrics: Key Performance Indicators focusing on efficiency, and critical success factors focusing on effectiveness.

Operational Level

Employees develop, control, and maintain core business activities required to run the day-to-day operations. Employee Types: Lower management, department managers, analysts, staff Focus: Internal, Functional Time Frame: Short term, day-to-day operations Decision Types: Structured, recurring, repetitive MIS Type: Information Metrics: Key Performance Indicators focusing on efficiency.

Drill-down

Enables users to view details, and details of details, of information. The reverse of consolidation.

Analytical Information

Encompass all organizational information, and its primary purpose is to support the performance of managerial analysis or semistructured decisions.

Transactional Information

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

Optimization Analysis

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

Goal-Seeking Analysis

Finds the inputs necessary to achieve a goal such as a desired level of output. The reverse of what-if and sensitivity analysis. Sets a target value (a goal) for a variable then repeatedly changes other variables until the target value is achieved.

Business Process Management (BPM) Systems

Focus on evaluating and improving processes that include both person-to-person workflow and system-to-system communications.

Streamlining

Improves business process efficiencies by simplifying or eliminating unnecessary steps.

Workflow

Includes the tasks, activities, and responsibilities required to execute each step in a business process.

Managers need to analyze large amounts of information

Innovations in communication and globalization have resulted in a dramatic increase in the variables and dimensions people need to consider when making a decision, solving a problem, or appraising an opportunity.

Business-Facing Processes

Invisible to the external customer but essential to the effective management of the business.

Swim Lane

Layout that arranges the steps of a business process into a set of rows depicting the various elements.

Semistructured Decisions

Managerial decisions that cover short and medium-range plans, schedules, and budgets along with policies, procedures, and business objectives for the firm. They allocate resources and monitor the performance of organizational sub-units, including departments, divisions, process teams, project teams, and other work groups. They occur in situations in which a few established processes help to evaluate potential solutions, but not enough to lead to a definite recommended decision.

Strategic Level

Managers develop overall business strategies, goals, and objectives as part of the company's strategic plan. They also monitor the strategic performance of the organization and its overall direction in the political, economic, and competitive business environment. Employee Types: Senior Management, Presidents, Leaders, Executives Focus: External, Industry, Cross company Time Frame: Long term - yearly, multi-year Decision Types: Unstructured, nonrecurring, one time MIS Requirement: Knowledge Metrics: Critical success factors focusing on effectiveness

Fuzzy Logic

Mathematical method of handling imprecise or subjective information Basic approach is to assign values between 0 and 1 to vague or ambiguous information.

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 achieving its goals and objectives.

Efficiency MIS Metrics

Measure 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.

Metrics

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

Decision Support Systems (DSSs)

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

Bottlenecks

Occur when resources reach full capacity and cannot handle any additional demands; they limit throughput and impede operations.

Redundancy

Occurs when a task or activity is unnecessarily repeated.

Structured Decisions

Operational decisions that arise in situations where established processes offer potential solutions. They are made frequently and are almost repetitive in nature; they affect short-term business strategies.

Visualization

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

As-Is Process Models

Represent the current state of the operation that has been mapped, without any specific improvements or changes to existing processes.

Customer-Facing Processes

Result in a product or service received by an organization's external customer.

To-Be Process Models

Show the results of applying change improvement opportunities to the current (As-Is) process model.

Artificial Intelligence (AI)

Simulates human thinking and behavior, such as the ability to reason and learn. 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.

Unstructured Decisions

Strategic decisions that occur in situations in which no procedures or rules exist to guide decision makers toward the correct choice. They are infrequent, extremely important, and typically related to long-term business strategy.

Slice-And-Dice

The ability to look at information from different perspectives.

Business Process Modeling or Mapping

The activity of creating a detailed flowchart or process map of a work process that shows its inputs, tasks, and activities in a structured sequence.

Consolidation

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

Business Process Reengineering (BPR)

The analysis and redesign of workflow within and between enterprises.

Transaction Processing System (TPS)

The basic business system that serves the operation level (analysts) and assists in making structured 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 the information, and (3) update existing information to reflect the new information.

Critical Success Factors (CSFs)

The crucial steps companies perform to achieve their goals and objectives and implement their strategies.

Granularity

The level of detail in the model or the decision-making process. The greater it is, the deeper the level of detail or fineness of data.

Online Analytical Processing (OLAP)

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

Best Practices

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

Source Documents

The original transaction record.

Automation

The process of computerizing manual tasks, making them more efficient and effective and dramatically lowering operational costs.

Mutation

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

Key Performance Indicators (KPIs)

The quantifiable metrics a company uses to evaluate progress toward critical success factors. Far more specific than CSFs.

Analytics

The science of fact-based decision making

Cycle Time

The time required to process an order.

Augmented Reality

The viewing of the physical world with computer-generated layers of information added to it.

Managers must make decisions quickly

Time is of the essence and people simply do not have time to sift through all the information manually.

Intelligent Systems

Various commercial applications of artificial intelligence. Include sensors, software, and devices that emulate and enhance human capabilities, learn or understand from experience, make sense of ambiguous or contradictory information, and even use reasoning to solve problems and make decisions effectively.