MGMT 382 Chapter 2 Review

Decision-making process

Problem identification, Data collection, Solution generation, Solution test, Solution selection, Solution implementation

Does KPIs differ per organization?

Yes, for example, a KPI for a public company may be its stock price, while a KPI in government might be a low unemployment rate.

Slice-and-Dice

ability to look at info from different perspectives -one slice of information could simply display all product sales during a given promotion -another slice could display a single product's sales for all promotions -this is often performed along a time axis analyze trends and find time-based patterns in the information

Expert systems

are computerized advisory programs that imitate the reasoning processes of experts in solving difficult problems. -Typically, they include a knowledge base containing various accumulated experience and a set of rules for applying the knowledge base to each particular situation. -Most common form of AI in the business arena because they fill the gap when human experts are difficult to find or retain or are too expensive.

Structured decisions

arise when established processes offer potential solutions. Made frequently and are almost repetitive in nature; they affect short-term business strategies. -examples: reordering inventory and creating the employee staffing and weekly production schedules

Business process improvement

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

Problem identification

define the problem as clearly and precisely as possible -ex. customer is unhappy with a purchase and wants to return it after the 30-day return policy expired

Solution generation

detail every solution possible, including ideas that seem farfetched -ex. allow the return, do not allow the return, or offer to switch the product for a new one

How is effectiveness MIS metrics determined?

determined according to an organization's goals, strategies, and objectives.

Natural language understanding

determines a user's intentions based on what the user typed or said. For example, a search engine uses natural language understanding to determine what the user is searching for based on what the user typed or said.

Estimation analysis

determines values for an unknown continuous variable behavior or estimate future value; one of the least expensive modeling techniques

BPMN flows

display the path in which the process flows

Managerial level

employees are continuously evaluating company operations to hone the firm's abilities to identify, adapt to, and leverage change. Includes semistructured decisions

Operational level

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

Analytical information (Managerial Support System)

encompasses all organizational information, and its primary purpose is to support the performance of managerial analysis or semistructured decisions. -Includes transactional information along with other information such as market and industry information. -Examples: trends, sales, product statistics, and future growth projections. -Managers use this when making important semistructured decisions such as whether the organization should build a new manufacturing plant or hire additional sales reps.

What two measurements can KPIs focus on?

external and internal measurements.

Resource scheduling

from hospitals to airports, AI can schedule the use of resources to maximize efficiency

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 -ex. gather details on problem with product and customer

Doing things right addresses efficiency

getting the most from each resource.

What is the operational level MIS type?

information

Infographic

information graphic; which is a representation of information in a graphical format designed to make the data easily understandable at a glance. -People use this to quickly communicate a message, to simplify the presentation of large amounts of data, to see data patterns and relationships, and to monitor changes in variables over time. -Infographics abound in almost any public environment- traffic signs, subway maps, tag clouds, musical scores, and weather charts are just a few examples, among a huge number of possibilities.

What is the managerial level focus?

internal, cross-functional (sometimes external)

Business-facing processes

invisible to the external customer but essential to the effective management for the business -Strategic planning, tactical planning, budget forecasting, training, purchasing raw materials

BPMN activity

is a task in a business process, any work that is being performed in a business process

BPMN event

is anything that happens during the course of a business process

Strategic level

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

What's a common external KPI?

market share

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. -Example: decisions about producing new products or changing employee benefits range from unstructured to semistructured.

Business process

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

What are the common elements of an infographic?

pie chart, bar chart, histogram, sparkline, and time-series chart

Visualization

produces graphical displays of patterns and complex relationships in large amounts of data. -EIS use visualization to deliver specific key information to top managers at a glance, with little or no interaction with the system

As is process models

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

What's a common internal KPI?

return on investment (ROI)

Doing the right things addresses effectiveness

setting the right goals and objectives and ensuring they are accomplished.

What are the common types of efficiency metrics?

throughput, transaction speed, system availability, information accuracy, and response time

What can source documents for a payroll system include?

time sheets, wage rates, and employee benefit reports

What does large increases in productivity cause?

typically result from increases in effectiveness, which focus on CSFs.

Data mining tools

variety of techniques to find patterns and relationships in large volumes of info that predict future behavior and guide decision making

What are examples from an operational level?

-how many employees are out sick? -what are next week's production requirements? -how much inventory is in the warehouse? -how many problems occurred when running payroll? -which employees are on vacation next week? -how many products need to be made today?

Primary Types of MIS Systems for Decision Making

1. Transaction Processing System 2. Decision Support Systems 3. Executive Information Systems

Common DSS Analysis Techniques:

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

What does a company need to do to remain ahead of fast-following competitors?

A company that has a competitive advantage needs to adjust and revise its strategy constantly

Automation

AI is building robots that can operate similar to humans

What is the relationship between critical success factors and key performance indicators?

CSFs are elements crucial for a business strategy's success. KPIs measure the progress of CSFs with quantifiable measurements, and one CSF can have several KPIs. Both categories will vary by company and industry. For example, improve graduation rates as a CSF for a college.

Is operating in the lower-left hand corner ideal?

In general, operating in the lower left-hand corner (minimal efficiency and minimal effectiveness) is not ideal for the operation of any organization.

Example of TPS

Input= TPS, Process= what-if, sensitivity, goal seeking, optimization (feedback), Output= forecasts, simulations, ad hoc reports

Should MIS choices drive business processes?

MIS choices should not drive business processes. Instead, business processes should drive MIS choices and should be based on business strategies and goals.

Pivot

(also known as rotation) rotates data to display alternative presentations of the data -ex. this can swap the rows and columns of a report to show the data in a different format

What are the potential features included in a dashboard designed for a manufacturing team?

-A hot list of key performance indicators, refreshed every 15 minutes. -A running line graph of planned versus actual production for the past 24 hours. -A table showing actual versus forecasted product prices and inventories. -A list of outstanding alerts and their resolution status -A graph of stock market prices

What problems that require optimization techniques does organizations face in decision-making environments?

-Business executives use genetic algorithms to help them decide which combination of projects a firm should invest in, taking complicated tax considerations into account -Investment companies use genetic algorithms to help in trading decisions. -Telecommunication companies use genetic algorithms to determine the optimal configuration of fiber-optic cable in a network that may include as many as 100,000 connection points. The genetic algorithm evaluates millions of cable configurations and selects the one that uses the least amount of cable.

What is the data mining process model?

-Business understanding: gain a clear understanding of the business problem that must be solved and how it impacts the company -Data understanding -Data preparation -Data modeling: apply mathematical techniques to identify trends and patterns in the data -Evaluation -Deployment

What are examples of neural networks in finance?

-Citibank uses neural networks to find opportunities in financial markets -Visa, American Express, and many other credit card companies use a neural network to spot peculiarities in individual accounts and follow up by checking for fraud -insurance companies along with state compensation funds and other carriers use neural network software to identify fraud

What are the three purposes of business process model?

-Focus attention on the process mode interfaces -Expose process detail gradually and in a controlled manner -Encourage conciseness and accuracy in describing the process model

What are the three steps to improve business processes?

-Follow process -Document as-is process -Establish measures

What are the three opportunities managers can identify when focusing on reengineering?

-Is the process broken? -Is it crucial for productivity improvement? -Will savings from automation be clearly visible?

What are Neural networks' features?

-Learning and adjusting to new circumstances on their own -Lending themselves to massive parallel processing -Functioning without complete or well-structured information -Coping with huge volumes of information with many dependent variables -Analyzing nonlinear relationships in information. (They have been called fancy regression analysis systems)

What three primary areas of AI does the text cover?

-Machine learning -Neural networks -Virtual reality

What are the three benefits an organization that can be identified by investigating business processes?

-Remove redundant tasks -Recognize smooth-running processes -Identify bottlenecks

What are the three conditions that indicate the time is right to initiate a business process change?

-The company is markedly below industry benchmarks on its core processes -To regain competitive advantages, the company must leapfrog competition on key dimensions -There has been a pronounced shift in the market the process was designed to serve

Operational decisions

-affect how the firm is run from day to day; they are the domain of operations managers, who are the closest to the customer. -Are considered structured decisions

Managerial decisions

-cover short- and medium-range plans, schedules, and budgets along with policies, procedures, and business objectives for the firm. They also allocate resources and monitor the performance of organizational subunits, including departments, divisions, process teams, project teams, and other work groups. -Concern how the organization should achieve the goals and objectives set by its strategy, and they are usually the responsibility of mid-level management. -Considered semistructured decisions

Method for Defining KPIs

-identify which three to five key performance indicators (KPIs) should be tracked for each employee role or line of business (LOB) -implement automated tools to collect data and present KPIs to company management in a balanced scorecard, performance scorecard, or executive dashboard -evaluate how well the employee or LOB is making progress toward the organization's strategic business goals -re-evaluate how well the KPIs are supporting current business goals -make adjustments as needed

What are the managerial level examples?

-who are our best customers by region, by sales representative, by product? -what are the sales forecasts for next month? How do they compare to actual sales for last year? -what was the difference between expected sales and actual sales for each month -what was the impact of last month's marketing campaign on sales? -what types of ad hoc or unplanned reports might the company require next month?

Managerial decision-making challenges

1. Managers need to analyze large amounts of information -ex. analyze data from 500 hotels to determine when to discount rooms based on occupancy patterns 2. Managers must make decisions quickly -ex. an important customer shows up at a hotel that is fully booked, and the reservation is missing 3. Managers must apply sophisticated analysis techniques, such as Porter's strategies or forecasting, to make strategic decisions -ex. implement a loyalty program across 500 hotels.

What KPIs is used to measure this CSF?

Average grades by course and gender, Student dropout rates by gender and major, Average graduation rate by gender and major, Time spent in tutoring by gender and major

Industry-specific facing processes

Banking - loan processing, insurance - claims processing, government - grant allocation, hotel - reservation handling, airline - baggage handling

What's the interrelationships between efficiency and effectiveness?

Ideally, a firm wants to operate in the upper right-hand corner of the graph, realizing significant increases in both efficiency and effectiveness. However, operating in the upper left-hand corner (minimal effectiveness with increased efficiency) or the lower right-hand corner (significant effectiveness with minimal efficiency) may be in line with an organization's particular strategies.

Does efficiency MIS metrics always guarantee effectiveness?

No

Which company used business process reengineering to create a competitive advantage?

Progressive insurance

Supervised machine learning

Training a model from input data and its corresponding labels. Supervised machine learning is analogous to a student learning a subject by studying a set of questions and their corresponding answers. After mastering the mapping between questions and answers, the student can then provide answers to new (never-before-seen) questions on the same topic. -Compare with unsupervised machine learning.

Unsupervised machine learning

Training a model to find patterns in a data set, typically an unlabeled data set. -The most common use of unsupervised machine learning is to cluster data into groups of similar examples. -For example, an unsupervised machine learning algorithm can cluster songs together based on various properties of the music. The resulting clusters can become an input to other machine learning algorithms (for example, to a music recommendation service). Clustering can be helpful in domains where true labels are hard to obtain. For example, in domains such as anti-abuse and fraud, clusters can help humans better understand the data. -Another example of unsupervised machine learning is principal component analysis (PCA). For example, applying PCA on a data set containing the contents of millions of shopping carts might reveal that shopping carts containing lemons frequently also contain antacids. -Compare with supervised machine learning.

Does KPIs differ for roles people play in the same organization?

Yes, for example, a chief executive officer (CEO) might consider profitability as the most important KPI, while a sales team manager in the same company might consider successful service level agreement (SLA) delivery numbers as the most important KPI.

Bar chart

a chart or graph that presents grouped data with lengths proportional to the values that they represent

Digital dashboard

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

Virtual reality

a computer-simulated environment that can be a simulation of the real world or an imaginary world. -Fast-growing area of artificial intelligence that had its origins in efforts to build more natural, realistic, multisensory human-computer interfaces. -Enables telepresence by which users can be anywhere in the world and use virtual reality systems to work alone or together at a remote site. -This involves using a virtual reality system to enhance the sight and touch of a human who is remotely manipulating equipment to accomplish a task. -Examples: range from virtual surgery, during which surgeon and patient may be on opposite sides of the globe, to the remote use of equipment in hazardous environments such as chemical plants and nuclear reactors.

Histogram

a graphical display of data using bars of different heights. It is similar to a bar chart, but a histogram groups numbers into ranges.

Time-series chart

a graphical representation showing change of a variable over time. Time-series charts are used for data that changes continuously, such as stock prices. They allow for a clear visual representation of change in one variable over a set amount of time.

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. Zero represents information not included, whereas 1 represents inclusion or membership. -For example, this logic is used in washing machines that determine by themselves how much water to use or how long to wash (they continue washing until the water is clean) -In accounting and finance, it allows people to analyze information with subjective financial values (intangibles such as goodwill) that are very important considerations in economic analysis -Fuzzy logic and neural networks are often combined to express complicated and subjective concepts in a form that makes it possible to simplify the problem and apply rules that are executed with a level of certainty.

Variance bias

a mathematical property of an algorithm. This is the only bias not associated with the input or training data. Models with high variance can easily fit into training data and welcome complexity but are sensitive to noise. Models with low variance are more rigid, less sensitive to data variations and noise. Importantly, data scientists are trained to arrive at an appropriate balance between these two properties.

Case-based reasoning

a method whereby new problems are solved based on the solutions from similar cases solved in the past -An auto mechanic who fixes an engine by recalling another car that exhibited similar symptoms is using case-based reasoning

Sample bias

a problem with using incorrect training data to train the machine. -For example, you are training an autonomous vehicle to drive in all weather conditions, but your sample only has driving data on sunny days over 85 degrees. You have now introduced sample bias into your model. Training the algorithm to drive in rain, snow, sleet, hail, etc. would eliminate this source of sample bias

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. -Help assess how an MIS project performs over time. -Example: if a system held a benchmark for response time of 15 seconds, the manager would want to ensure response time continued to decrease until it reached that point. If response time suddenly increased to 1 minute, the manager would know the system was not functioning correctly and could start looking into potential problems. -Continuously measuring MIS projects against benchmarks provides feedback so managers can control the system.

Deep learning

a process that employs specialized algorithms to model and study complex datasets; the method is also used to establish relationships among data and datasets. -Technology mimics the human brain; hence, this model is a form of neural network, consisting of neurons. Similar to the structure of the human brain, neurons in neural networks are also organized in layers. -Deep learning trains from each layer and then uses that learning in the next layer to learn more, until the learning reaches its full stage through cumulative learning in multiple layers. -Models require thousands of data records the models to become good at classification tasks and millions of data records for them to perform at the level of a human.

Prejudice bias

a result of training data that is influenced by cultural or other stereotypes. -For example, you are training a machine vision algorithm, and you have men going to work and women taking care of children in your data images. The algorithm is likely to learn that men work and women stay at home. The primary issue with prejudice bias is that the training data decisions consciously or unconsciously reflected cultural and social stereotypes. The solution to reducing prejudice bias is to ensure the humans gathering the training data are aware of and sensitive to introducing their own societal prejudices or stereotypes into the training data.

Model

a simplified representation or abstraction of reality. -Help managers calculate risks, understand uncertainty, change variables, and manipulate time to make decisions. -MIS support systems rely on models for computational and analytical routines that mathematically express relationships among variables.

Sparkline

a small embedded line graph that illustrates a single trend. Sparklines are often used in reports, presentations, dashboards, and scoreboards. They do not include axes or labels; context comes from the related content.

Sensitivity analysis

a special case of what-if analysis, is 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

Executive information system (EIS) (Strategic Support System)

a specialized DSS that supports senior-level executives and unstructured, long-term, nonroutine decisions requiring judgment, evaluation, and insight. These decisions do not have a right or wrong answer, only efficient and effective answers.

Project

a temporary activity a company undertakes to create a unique product, service, or result. -Example: the construction of a new subway station is a project, as is a movie theater chain's adoption of a software program to allow online ticketing.

Machine learning

a type of artificial intelligence that enables computers to both understand concepts in the environment and also to learn. -Based on the principle that systems can learn from data, identify patterns, and make decisions with minimal human interaction. -Machines are able to act without human programs detailing how to perform tasks. -A type of AI. AI has far more capabilities than just machine learning.

Pie chart

a type of graph in which a circle is divided into sectors that each represent a proportion of the whole

Google glass

a wearable computer with an optical head-mounted display (OHMD). Developed by Google, it adds an element of augmented reality to the user's world by displaying information in a smart phone - like hands-free format.

Virtual workplace

a work environment that is not located in any one physical space. It is usually in a network of several places, connected through the Internet, without regard to geographic borders. Employees can interact in a collaborative environment regardless of where they may happen to be in the world.

Machine vision

ability of a computer to "see" by digitizing an image, processing the data it contains, and taking some kind of action

Neural networks

also called an artificial neural network, is a category of AI that attempts to emulate the way the human brain works. -Are human brains. -You can give a neural network company data and train it to perform the task, generating reports, and it will use that training, new information, and its "work experience" to adapt and improve in much the same way a human worker learns. -Unlike humans, these software robots work at a much faster rate and never sleep, saving both your business money and freeing up employees to work on more creative and exciting tasks. -Analyze massive quantities of data to establish patterns and characteristics when the logic or rules are unknown. These models take inspiration from the brain and are composed of layers (at least one of which is hidden) consisting of simple connected units or neurons.

How does a DSS differ from an EIS?

an EIS requires data from external sources to support unstructured decisions. This is not to say that DSSs never use data from external sources, but typically, DSS semistructured decisions rely on internal data only.

Genetic algorithm

an artificial intelligence system that mimics the evolutionary, survival-of-the-fittest process to generate increasingly better solutions to a problem. -Is essentially an optimizing system: it finds the combination of inputs that gives the best outputs. -Best suited to decision-making environments in which thousands, or perhaps millions, of solutions are possible. -Can find and evaluate solutions with many more possibilities, faster, and more thoroughly than a human.

Optimization analysis

an extension of goal-seeking analysis, finds the optimum value for a target variable by repeatedly changing other variables, subject to specified constraints -by changing revenue and cost variables in this analysis, managers can calculate the highest potential profits -constraints on revenue and cost variables can be taken into consideration, such as limits on the amount of raw materials the company can afford to purchase and limits on employees available to meet production needs

Strategic business process

are dynamic, nonroutine, long-term business processes such as financial planning, expansion strategies, and stakeholder interactions

Managerial business process

are semidynamic, semiroutine, monthly business processes such as resource allocation, sales strategy, or manufacturing process improvements.

Operational business processes

are static, routine, daily business processes such as stocking inventory, checking out customers, or daily opening and closing processes. Improving business processes is critical to staying competitive in today's electronic marketplace

Critical success factors (CSFs)

are the crucial steps companies perform to achieve their goals and objectives and implement their strategies -ex. create high-quality products, retain competitive advantages, reduce product costs, increase customer satisfaction, and hire and retain the best business professionals

Key performance indicators (KPIs)

are the quantifiable metrics a company uses to evaluate progress toward critical success factors. Far more specific than CSFs. -ex. 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

What are area examples of AI?

automation, complex analytics, fraud detection, and resource scheduling

What does decision making at the strategic level require?

both business intelligence and knowledge to support the uncertainty and complexity associated with business strategies.

What is the managerial level MIS type?

business intelligence

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 -a user would be able to observe and evaluate any changes that occurred to the values in the model, especially to a variable such as profits. Users repeat this analysis with different variables until they understand all the effects of various situation

What does transformation include?

common procedures such as create, read, update, and delete (commonly referred to as CRUD) employee records along with calculating the payroll and summarizing benefits

What analytical capabilities does digital dashboards offer?

consolidation, drill-down, slice-and-dice, and pivot

Fraud Detection

credit card companies use AI to determine if the purchase was made by the customer by analyzing and identifying unfamiliar spending patters

Recommendation engine

data mining algorithm that analyzes a customer's purchases and actions on a website and then uses the data to recommend complementary products

Drill-down

enables users to view details, and details of details, of information -this is reverse of consolidation; a user can view regional sales data and then drill down all the way to each sales representative's data at each office -capability lets managers view monthly, weekly, daily, or even hourly information

Transactional information (Operational Support Systems)

encompasses 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. -Is created, for example, when customers are purchasing stocks, making an airline reservation, or withdrawing cash from an ATM. -Managers use this when making structured decisions at the operational level, such as when analyzing daily sales reports to determine how much inventory to carry.

Solution test

evaluate solutions in terms of feasibility (can it be completed?), suitability (is it a permanent or temporary fix?), and acceptability (can all participants form a consensus?)

What industry is a veteran in the use of neural network technology and has been relying on various forms for over two decades?

finance industry; uses it to review loan applications and create patterns or profiles of applications that fall into two categories- approved or denied.

Goal-seeking analysis

finds the inputs necessary to achieve a goal such as a desired level of output -it is reverse of what-if and sensitivity analysis -instead of observing how changes in a variable affect other variables, this analysis sets a target value (a goal) for a variable and then repeatedly changes other variables until the target value is achieved

Business process model and notation

graphical notation that depicts the steps in a business process

What did Peter Drucker do?

he offered a helpful distinction between efficiency and effectiveness: doing things right addresses efficiency and doing the right things addresses effectiveness

How can monitoring KPIs help management?

help them identify deficiencies within an organization; however, it is up to management to decide how to correct them.

What does many managers turn to when measuring MIS projects?

higher-level metrics, such as efficiency and effectiveness

Solution implementation

if the solution solves the problem, then the decisions made were correct. If not, then the decisions were incorrect and the process begins again

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. Understanding workflow, customers' expectations, and the competitive environment provides managers with the necessary ingredients to design and evaluate alternative business processes in order to maintain competitive advantages when internal or external circumstances change

What does AI systems do?

increase the speed and consistency of decision making, solve problems with incomplete information, and resolve complicated issues that cannot be solved by conventional computing.

ROI

indicates the earning power of a project. We measure it by dividing the profitability of a project by the costs. This is easy for departments where the projects are tangible and self-contained. For the projects that are intangible and cross departmental lines (such as MIS projects), ROI is challenging to measure. -For example: Calculating the ROI of a fire extinguisher. If it is never used, the ROI is low. If it puts out a fire that could have destroyed the entire building, its ROI is astronomically high.

What are massive amounts of data used for?

inputs to train AI systems such as billions of images, voice, video, and IoT sensor data. AI is growing exponentially as computer hardware capacity increases, allowing the storage and analysis of petabytes of training data. AI models use the data to self-train and then make predictions on new data.

What is the operational level focus?

internal and functional

Strategic decision

involve higher-level issues concerned with the overall direction of the organization; these decisions define the organization's overall goals and aspirations for the future. -Highly unstructured decisions

Business process model

is a graphic description of a process, showing the sequence of process tasks, which is developed for a specific purpose and from a selected viewpoint. -A set of one or more process models details the many functions of a system or subject area with graphics and text

Dynamic process

is continuously changing and provides business solutions to ever-changing business operations. As the business and its strategies change, so do the dynamic processes. -Examples of dynamic processes include managing layoffs of employees, changing order levels based on currency rates, and canceling business travel due to extreme weather -ex. Throwing a bird in the air

Automation

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

BPMN gateway

is used to control the flow of a process

What happens when you have too many KPIs?

it can be problematic. It not only dilutes employee attention, it also makes it difficult for managers to prioritize indicators and make sure the key indicators get the attention they deserve.

What is the output of transformation?

it includes cutting the paychecks and generating payroll reports.

What is the operational level metrics?

key performance indicators focusing on efficiency

What is the managerial level metrics?

key performance indicators focusing on efficiency, and critical success factors focusing on effectiveness

Swim lane

layout arranges the steps of a business process into a set of rows depicting the various elements

What are operational level employee types?

lower management, department managers, analysts, and staff

What happens with big data?

managers can now turn their measurements into real-time knowledge that directly translates to improved decision making, driving business efficiency and effectiveness.

What happens when moving up through the organizational pyramid?

managers deal less with the details (finer information) and more with meaningful aggregations of information (coarser information)

Regardless of what process is measured, how it is measured, and whether it is performed for the sake of efficiency or effectiveness, what should managers do?

managers must set benchmarks, or baseline values the system seeks to attain.

Algorithms

mathematical formulas placed in software that performs an analysis on a dataset. -Use formulas to solve problems, such as driving cars or playing chess. -In AI, an algorithm tells the machines how to figure out answers to different issues or questions.

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 as 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

Customer satisfaction

measured by satisfaction surveys, percentage of existing customer retained, and increases in revenue dollars per customer

Metrics

measurements that evaluate results to determine whether a project is meeting its goals. Two core metrics are critical success factors and key performance indicators.

What are the managerial level employee types?

middle management, managers, and directors

Decision support systems (DSSs)

model information using OLAP, which provides assistance in evaluating and choosing among different courses of action. -Enable high-level managers to examine and manipulate large amounts of detailed data from different internal and external sources. Analyzing complex relationships among thousands or even millions of data items to discover patterns, trends, and exception conditions is one of the key uses associated with a DSS. -Example: doctors may enter symptoms into a decision support system so it can help diagnose and treat patients. -Insurance companies also use a DSS to gauge the risk of providing insurance to drivers who have imperfect driving records.

Workflow control system

monitor processes to ensure tasks, activities, and responsibilities are executed as specified

What does digital dashboards enable employees to do?

move beyond reporting to using information to increase business performance directly. -With them, employees can react to information as soon as it becomes available and make decisions, solve problems, and change strategies daily instead of monthly.

What are the four areas AI primary overview include?

natural language processing, natural language understanding, knowledge representation, and knowledge planning

Bottlenecks

occur when resources reach full capacity and cannot handle any additional demands; they limit throughput and impede operations. A computer working at its maximum capacity will be unable to handle increased demand and will become a bottleneck in the process. Streamlining removes bottlenecks, an important step if the efficiency and capacity of a business process are being increased

Unstructured decisions

occurring 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 -Examples: include the decision to enter a new market or even a new industry over, say, the next 3 years. -In these types of decisions, managers rely on many sources of information, along with personal knowledge, to find solutions.

Underfitting

occurs when a machine learning model has poor predictive abilities because it did not learn the complexity in the training data. When underfitting occurs, the solution is to try different machine learning algorithms. Many problems can cause overfitting and underfitting, and finding the sweet spot between the two is a difficult task.

Overfitting

occurs when a machine learning model matches the training data so closely that the model fails to make correct predictions on new data. Essentially, the model knows the training data too well and is unable to make future predictions. -Happens when a model learns the details in the training data to the extent that it negatively impacts the performance of the model on new data.

Redundancy

occurs when a task or activity is unnecessarily repeated, for example, if both the sales department and the accounting department check customer credit

Data augmentation

occurs when adding additional training examples by transforming existing examples. -For example, if your model includes images of only 10 people there might not be enough differences to distinguish between males and females. -Can rotate, stretch, and reflect each image to produce many variants of the original images providing enough examples for training. Once you have your training data, you need to watch for two additional learning problems: overfitting and underfitting.

Measurement bias

occurs when there is a problem with the data collected that skews the data in one direction. -For example, if the same camera takes photos of all the training data and there is a problem with the camera's filter, then the images could be distorted. The algorithm would be trained on image data that is incorrect and does not represent reality. -Can be avoided by collecting additional data using different devices.

Market basket analysis

one of the most common forms of association detection analysis; evaluates such items as websites and checkout scanner info to detect customers' buying behavior and predict future behavior by identifying affinities among customers' choices of products and services

Business-process patent

protects a specific set of procedures for conducting a particular business activity

Granularity

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

Customer-facing processes

results in a product or service received by an organization's external customer. -Order processing, customer service, sales process, customer billing, order shipping

Autonomous robotics

robot capable of making its own decisions and perform an action accordingly

What are the four types of bias in machine learning?

sample bias, prejudice bias, measurement bias, and variance bias

Solution selection

select the solution that best solves the problem and meets the needs of the business -ex. allow the customer to return the product

What are the managerial level decision types?

semistructured, ad hoc (unplanned) reporting

What is the managerial level time frame?

short term, daily, monthly, yearly

What is the operational level time frame?

short term, day-to-day operations

To be process models

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

The common systems view of a DSS

shows how TPSs supply transactional data to a DSS. The DSS then summarizes and aggregates the information from the different TPSs, which assist managers in making semistructured decisions.

Artificial intelligence (AI)

simulates human thinking and behavior, such as the ability to reason and learn. AI's ultimate goal is to build a system that can mimic human intelligence. -Examples: Alexa or Siri -Input: Email Output: Determines if the email is spam -Input: Audio clip Output: text transcript -Input: English sentence Output: Chinese sentence

Prediction

statement about what will happen or might happen in the future

Knowledge representation

stores large amounts of data with fast access.

Strong AI

strong refers to the field of artificial intelligence that works toward providing brainlike powers to AI machines; in effect, it works to make machines as intelligent as humans.

What is the operational level decision types?

structured, recurring, repetitive

Financial

such as return on invement (the earning power of an organization's assets), cost-benefit analysis (the comparison of projected revenues and costs, including development, maintenance, fixed, and variable), and break-even analysis (the point at which constant revenues equal ongoing costs)

What are the types of Machine Learning?

supervised machine learning, unsupervised machine learning, and transfer machine learning

Cluster analysis

technique used to divide an info set into mutually exclusive groups such that the members of each group are as close together as possible to one another and the different groups are as far apart as possible (ex. targeting marketing based on zip codes)

What does efficiency MIS metrics focus on?

technology itself

Business process modeling

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 -ex. data for different sales representatives can then be rolled up to an office level, then state level, then regional sales level

Throughput

the amount of information that can travel through a system at any point in time

Transaction speed

the amount of time a system takes to perform a transaction

Business process re-engineering (BPR)

the analysis and redesign of workflow within and between enterprises

Digitization

the automation of existing manual and paper-based processes and workflows to a digital format

Transaction processing system (TPS)

the basic business system that serves the operational level (analysts) and assists in making structured decisions. -Most common example is an operational accounting system such as a payroll system or an order-entry system (such as a cash register at Target)

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. -During OLTP, the organization must capture every detail of transactions and events.

In augmented reality

the computer uses sensors and algorithms to determine the position and orientation of a camera.

Usability

the ease with which people perform transactions and/or find information

Machine vision resolution

the extent to which a machine can differentiate between objects

Information accuracy

the extent to which a system generates the correct results when executing the same transaction numerous times

What are the common DSS analysis techniques forms of?

the first 4 are all forms of predictive analytics and optimization analysis is a form of prescriptive analytics

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. Measuring MIS projects help determine the best practices for an industry.

Conversion rates

the number of customers an organization touches for the first time and persuages to purchase its products or services. this is a popular metric for evaluating the effectiveness of banner, pop-up, and pop-under ads on the Internet

System availability

the number of hours a system is available for users

Data mining

the process of analyzing data to extract information not offered by the raw data alone.

Data profiling

the process of collecting statistics and info about data in an existing source

Data replication

the process of sharing info to ensure consistency between multiple data sources

Mutation

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

Market share

the proportion of the market that a firm captures. Calculate it by dividing the firm's sales by the total market sales for the entire industry. It measures a firm's external performance relative to that of its competitors. -For example: if a firm's total sales (revenues) are $2 million and sales for the entire industry are $10 million, the firm has captured 20% of the total market (2/10=20%) share.

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

Response time

the time is takes to respond to users interactions such as mouse click

Cycle time

the time required to process an order, is a common KPI for operations management. Rush and custom orders tend to create bottlenecks, causing operations to fall below its benchmarked cycle time

Reinforcement learning

the training of machine learning models to make a sequence of decisions. -Model learns to achieve a goal in an uncertain, potentially complex environment, for example, a game-like situation. -The model uses trial and error to find a solution to the problem. To train the model, the programmer uses either rewards or penalties for the actions it performs. The model's goal is to maximise the total reward.

Augmented reality

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

What is the problem with humans building the algorithms and feeding the training data?

there are problems with bias being introduced into the AI models

What are similarities between virtual reality (VR) and augmented reality?

they are two sides of the same coin. AR as a form of virtual reality with one foot in the real world; augmented reality simulates artificial objects in the real environment; virtual reality creates an artificial environment to inhabit.

What is the purpose of using KPIs?

to focus attention on the tasks and processes that management has determined are most important for making progress toward declared goals and targets.

Transfer machine learning

transferring information from one machine learning tasks to another -for example, in multi-task learning, a single model solves multiple tasks, such as a deep model that has different output nodes for different tasks -might involve transferring knowledge from the solution of a simpler task to a more complex one, or involve transferring knowledge from a task where there is more data to one where there is less data -most machine learning systems solve a single task -this is a baby step toward AI in which a single program can solve multiple tasks

What are the common types of effectiveness metrics?

usability, customer satisfaction, conversion rates, and financial

Robotic process automation

use of software with AI and machine learning capabilities to handle high-volume, repeatable tasks that previously required a human to perform

Static process

uses a systematic approach in an attempt to improve business effectiveness and efficiency continuously. Managers constantly attempt to optimize static processes. -Examples of static processes include running payroll, calculating taxes, and creating financial statements -ex. Throwing a rock in the air

Natural language processing

uses language as an input that a computer system can decipher and act upon its meaning, such as Siri and Alexa

Knowledge planning

uses stored data to make predictions and decisions in real time such as goal-seeking analysis.

Haptic interface

uses technology allowing humans to interact with a computer through bodily sensations and movements- for example, a cell phone vibrating in your pocket. -Primarily implemented and applied in virtual reality environments and is used in virtual workplaces to enable employees to shake hands, demonstrate products, and collaborate on projects.

What happens when using systems thinking?

we can see that the inputs for a TPS are source documents, the original transaction record.

What are the two categories of AI?

weak AI and strong AI

Weak AI

weak AI machines can still make their own decisions based on reasoning and past sets of data. Most of the AI systems on the market today are weak AI

Does digital dashboards deliver results quickly?

whether basic or comprehensive, deliver results quickly. As they become easier to use, more employees can perform their own analyses without inundating MIS staff with questions and requests for reports.

What happens when algorithms are biased?

will end up doing things that reflect that bias. Bias can be detected and mitigated if you know what bias looks like and can identify its source.

Complex analytics

with massive amounts of data available, humans need help analyzing to find patterns