Chapter 2 Management Information Systems

How can a manager use automation, streamlining, and business process reengineering to gain operational efficiency and effectiveness?

1. Business process improvement attempts to understand and measure the current process and make performance improvements accordingly, which obviously will improve operational effectiveness and efficiency. Automation is the process of computerizing manual tasks. This then makes those tasks more effective, efficient and, lowers operating costs. This improves operational effectiveness and efficiency dramatically. Streamlining improves business process efficiencies by simplifying or eliminating unnecessary steps.

Five most common categories of AI

1. Expert System 2. Neural Network 3. Genetic Algorithm 4. Intelligent Agent 5. Virtual Reality

Explain the difference between customer-facing processes and business-facing processes. Which one is more important to an organization?

1. The difference between customer facing processes and business facing processes are that customer facing processes are the processes that customers see when doing business with the company while business facing processes involve everything behind the scenes that goes into providing a good or service to a customer. One isn't more important than the other in every instance but in some companies, one may be more important than another.

Four quantitative models used by DSSs include

1. What-if analysis 2. Sensitivity analysis 3. Goal-seeking analysis 4. Optimization analysis

The six-step decision-making process

1.Problem identification 2.Data collection 3.Solution generation 4.Solution test 5.Solution selection 6.Solution implementation

Explain how finding different ways to travel the same road relates to automation, streamlining, and business process reengineering.

A company could improve the way it travels by changing from foot to horse and then from horse to car. With a BPR mind-set, however, it would look beyond automating and streamlining to find a completely different approach. It would ignore the road and travel by air to get from point A to point B.

Why must business professionals understand how MIS supports decision making and problem solving?

A company will not have a future if it is not cultivating strategies for tomorrow and this will not be possible to do so unless they are using MIS to quickly review information data in the lake with the massive volumes of info available managers are challenged to make highly complex decisions in short time frames and therefore MIS is required.

Define decision support systems and describe the role they play in a business.

A decision support system (DSS) is a computerized program used to support determinations, judgments, and courses of action in an organization or a business. A DSS sifts through and analyzes massive amounts of data, compiling comprehensive information that can be used to solve problems and in decision-making.

Benchmarking

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

Executive information system (EIS)

A specialized DSS that supports senior level executives within the organization

What is a business process?

A standardized set of activities that accomplishes a specific task. This helps managers to envision how a business works.

Project

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

Define transaction processing systems and describe the role they play in a business.

A transaction processing system (TPS) is the basic business system that serves the operational level and assists in making structured decisions. It makes structured decisions faster and more efficient to a business.

Define expert systems and describe the role they play in a business.

An expert system or executive information system (EIS) is a specialized DSS that supports senior-level executives and unstructured, long-term, no routine decisions requiring judgment, evaluation, and insight.

What is artificial intelligence? What are the five types of AI systems? What applications of AI offer the greatest business value?

Artificial intelligence stimulates human thinking and behavior such as the ability to learn and read. Mimics human intelligence. Expert (chess), neural networks (checking for fraud), genetic algorithms (trading decisions), intelligent, virtual reality (working virtually around world).

Transaction processing system (TPS)

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

Online transaction processing (OLTP)

Capturing of transaction and event information using technology to process, store, and update

Most EISs offering the following capabilities

Consolidation, Drill-down, Slice-and-dice, and Pivot

What are the capabilities associated with digital dashboards?

Digital dashboards support visualization, which tracks KPI's and CSF's by compiling information from multiple sources and tailoring it to meet user needs. They are capable of providing a hot list of key performance indicators, refreshed every 15 minutes.

Operational decision making

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

Managerial decision making

Employees evaluate company operations to identify, adapt to, and leverage change

Business facing process

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

How does an electronic spreadsheet program, such as Excel, provide decision support capabilities?

It might contain models that calculate market share or ROI.

Strategic decision making

Managers develop overall strategies, goals, and objectives

Why do managers need to understand business processes? Can you make a correlation between systems thinking and business processes?

Managers need to understand business processes because if they are to make decisions they should really know both the customer facing processes and the business facing processes. Automation is the process of computerizing manual tasks.

Online analytical processing (OLAP)

Manipulation of information to create business intelligence in support of strategic decision making

Efficiency MIS metrics

Measure the performance of MIS itself, such as throughput, transaction speed, and system availability

Metrics

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

Effectiveness MIS metrics

Measures the impact MIS has on business processes and activities, including customer satisfaction and customer conversation rates

What is the relationship between critical success factors and key performance indicators? how can a manager use them to understand business operations?

Metrics are measurements that evaluate results to determine whether a project is meeting it's goals. critical success factors are the crucial steps companies used to perform at their goals/objectives and implement their strategies while key performance indicators are the quantifiable metrics a company uses to evaluate progress towards critical success factors. Key performance indicators are far more specific than critical success factors it is important to understand these metrics, critical success factors are elements crucial for a business strategy a success and koi measures the progress with quantifiable measurements.

Decision support system (DSS)

Models information to support managers and business professionals during the decision-making process

Semistructured decisions

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

Bottleneck

Occur when resources reach full capacity and cannot handle any additional demands

Unstructured decisions

Occurs in situations in which no procedures or rules exist to guide decision makers toward the correct choice

Redundancy

Occurs when a task or activity is unnecessarily repeated

Customer facing process

Results in a product or service that is received by an organization's external customer

Artificial intelligence (AI)

Simulates human intelligence such as the ability to reason and learn

Structured decisions

Situations where established processes offer potential solutions

Business process modeling (or mapping)

The activity of creating a detailed flow chart or process map of a work process showing its inputs, tasks, and activities, in a structured sequence

Critical success factors (CSFs)

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

What is the difference between the ability of a manager to retrieve information instantly on demand using an MIS and the capabilities provided by a DSS?

The difference between the ability of a manager to retrieve information instantly on demand using an MIS and the capabilities provided by a DDS are that MIS systems obtain the data that managers require. ... DDS systems also provide capabilities for a manager to do interactive modeling in order to make informed decisions.

What are the common DSS analysis techniques?

The main techniques that are mostly used in data-based DSS for analyzing the data are online analytical processing (OLAP) and data mining. Online Analytical Processing (OLAP): It is based on queries and can provide fast answers to complex business requests.

Source document

The original transaction record

Market share

The portion of the market that a firm captures (external)

Why would a manager need to review an As-Is and To-Be process model?

The primary goal is to simplify, eliminate, and improve the To-Be processes. ... Customer-facing processes, also called front-office processes, result in a product or service received by an organization's external customer.

Automation

The process of computerizing manual tasks

Key performance indicators (KPIs)

The quantifiable metrics a company uses to evaluate progress toward critical success factors

What are the three levels of management found in a company? what type of decisions are made at each level?

The three levels of management typically found in an organization are low-level management, middle-level management, and top-level management. Top-level managers are responsible for controlling and overseeing the entire organization.

Decision-making and problem-solving occur at each level in an organization

Top: Strategic, Middle: Managerial, Bottom: Operational

Model

a simplified representation or abstraction of reality

Business process reengineering (BPR)

analysis and redesign of workflow within and between enterprises

Business process improvement

attempts to understand and measure the current process and make performance improvements accordingly

Benchmark

baseline values the system seeks to attain

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

Return on investment (ROI)

indicates the earning power of a project (internal)

Business process model

is a graphic description of a process, showing the sequence of process tasks, which is developed for a specific purpose

Intelligent system

various commercial applications of artificial intelligence