The topics discussed in this chapter are: Use of IT to support decision making covers a broad swath of territory; some technologies aim to alert people to anomalies, discontinuities, and shortfalls; others aim to make decisions, either as recommendations to people or to act on behalf of people; handing over decisions to systems has its pros and cons, thus their actions need to be monitored.
Supporting Decision Making Lecture 27 Systems for Supporting KnowledgeBased Work n Today we shall look at, ă ă ă ă ¨ n n Decision Support Systems (DSS) Data Mining Executive Information Systems (EIS), and Expert Systems Agent-based Modelling How to create a real-time enterprise Case examples include: a problem-solving scenario, OreIda Foods, a major services company, Harrah’s Entertainment, Xerox Corporation, General Electric, American Express, Delta Air Lines, a real-time interaction on a website, and Western Digital Introduction n Most computer systems support decision making because all software programs involve automating decision steps that people would take n Decision making is a process that involves a variety of activities, most of which handle information n A wide variety of computer-based tools and approaches can be used to confront the problem at hand and work through its solution A PROBLEM-SOLVING SCENARIO Case Example – Supporting Decision Making n Using an executive information system, (EIS) to compare budget to actual sales n Discover a sale shortfall in one region n Searches for the cause of the shortfall n But couldn’t find an answer A PROBLEM-SOLVING SCENARIO Case Example – Supporting Decision Making cont Investigate – several possible causes n n Economic Conditions – through the EIS & the Web accesses: ă Wire services ¨ Bank economic newsletters ¨ Current business and economic publications Competitive Analysis – through the same sources investigates whether competitors: A PROBLEM-SOLVING SCENARIO Case Example – Supporting Decision Making cont ¨ Have introduced a new product ¨ Have launched an effective ad campaign n n Written Sales Report – browses the reports ă Concept based text retrieval system makes this easier A Data Mining Analysis ă Looking for any previously unknown relationships A PROBLEM-SOLVING SCENARIO Case Example – Supporting Decision Making cont n Then accesses a marketing DSS – includes a set of models to analyze sales patterns by: ă Product ă Sales representative ă Major customer Result no clear problems revealed Action – hold a meeting, in an electronic meeting room supported by group DSS (GDSS) software A PROBLEM-SOLVING SCENARIO Case Example – Supporting Decision Making cont n This scenario illustrates: ă The wide variety of activities involved in problem solving, and ă The wide variety of technologies that can be used to assist decision makers and problem solvers Technologies that Support Decision Making n The purpose of tractors, engines, machines etc = to enhance humans’ physical capabilities n The purpose of computers has been to enhance our mental capabilities Hence, a major use of IT is to relieve humans of some decision making or help us make more informed decisions n Technologies that Support Decision Making Decision Support Systems n n n n Systems that support, not replace, managers in their decision-making activities Decision modeling, decision theory, and decision analysis, attempt to make models from which the ‘best decision’ can be derived, by computation DSS are defined as: Computer-based systems ă That help decision makers ă Confront ill-structured problems ă Through direct interaction ă With data and analysis models Wide range of technologies can be used to assist decision makers and problem solvers Toward the Real-Time Enterprise n Through IT, organizations have been able to see the status of operations more and more toward real time n The Internet is giving companies a way to disseminate closer-to-real-time information about events n The essence of the phrase real-time enterprise is that organizations can know how they are doing at the moment, rather than have to wait days, weeks, or months for analysis results Toward the Real-Time Enterprise cont n It is occurring on a whole host of fronts, including: ă Enterprise nervous systems n To coordinate company operations ¨ Straight-through processing n To reduce distortion in supply chains ¨ Real-time CRM n To automate decision making relating to customers, and ă Communicating objects n To gain real-time data about the physical world Toward the Real-Time Enterprise Enterprise Nervous Systems • • These are the technical means to a real-time enterprise They are: ă ă ă ă Message based - because sending messages is efficient and effective in dispersing information among parties simultaneously Event driven - when an event occurs, it is recorded and made available Use a publish and subscribe approach - the event is “published” to an electronic address and any system, person, or device authorized to see that information can “subscribe” to that address’s information feed, and Use common data formats - data formats from disparate systems are reduced to common denominators that can be understood by other systems and hence shared DELTA AIRLINES Case Example – Enterprise Nervous Systems n n n n n Delta has built an enterprise nervous system to manage its gate operations by incorporating the disparate systems the airline had in the late 1990s Information about each flight is managed by the system, in real time, and everyone who needs to know about a change can get the data The system uses a publish-and-subscribe approach using enterprise application integration (EAI) products, whereby the messaging middleware allows disparate applications to share data When an event occurs, it ripples to everyone Delta is now expanding those ripples out to their partners who serve their passengers, such as caterers and security companies Toward the Real-Time Enterprise Straight-Through Processing n n n n The notion of a real-time enterprise has generated two “buzzwords” One is zero latency, which means reacting quickly to new information (with no wait time) The second is straight-through processing, which means that transaction data are entered just once in a process or a supply chain (like at Delta) The goal is to reduce lags and latency in supply chains Toward the Real-Time Enterprise Real-Time CRM Another view of a real-time response might occur between a company and a potential customer Perhaps via a customer call center or a Website A REAL-TIME INTERACTION ON A WEB SITE Case Example – Real-Time CRM n n n E.piphany CRM software example A potential guest visits the Website of a hotel chain, checking for a hotel in Orlando ă The real-time CRM system initiates requests to create a profile of the customer n All past interactions with that customer n Past billing information n Past purchasing history Using this information, it makes real-time offers to the Website visitor, and the visitor’s responses are recorded and taken into account for future Website visitors Toward the Real-Time Enterprise Communicating Objects n These are sensors and tags that provide information about the physical world via real-time data A communicating object can tell you: ă What it is attached to ă Where it is located ă Where it belongs, and ă A lot more information about itself It is a radio frequency identification device (RFID), also called “smart tags ă Based on WW2 technology Toward the Real-Time Enterprise Communicating Objects cont • n n In Singapore, cars carry smart tags, and drivers are charged variable prices for where they drive in the city and when ă The prices are set to encourage or discourage driving at different places at different times ă Also proposed for Sydneys new toll ways It’s an example of real-time traffic control Smart tags will transform industries because they will talk to one another (object-to-object communication), changing how work is handled Toward the Real-Time Enterprise Vigilant Information Systems n n The premise of the real-time enterprise is not only that it can capture data in real time, but that it has the means to act on that data quickly US Air Force pilot = bet he could win any dogfight ă Never lost a bet, even to superior aircraft ă Called his theory OODA n Observe where his challenger’s plane is n Orient himself and size up his own vulnerabilities and opportunities n Decide which manoeuvre to take n Act to perform it before the challenger could go through the same four steps WESTERN DIGITAL Case Example: Vigilant Information Systems (OODA) n n PC disk manufacturer used OODA type of thinking to move itself closer to operating in real time with a senseand-respond culture that aims to operate faster than its competitors Built what they call a Vigilant Information System (VIS) which they define as a system that is alertly watchful ă Complex and builds on the firms legacy systems ă Essentially has four layers – Figure 11-5 Toward the Real-Time Enterprise The Dark Side of Real Time n n What are the drawbacks of real-time activities? ă Object-to-object communication could compromise privacy, since knowing the exact location of a company truck every minute of the day and night can be construed as invading the driver’s privacy § That’s a political issue, not a technical issue, and many CEOs are going to face this question in the future ă Also, in the era of speed, a situation can become very bad very fast, so people must be constantly watching for signals that something negative is likely to happen Need for circuit breakers? e.g NYSE Summary n Use of IT to support decision making covers a broad swath of territory n Some technologies aim to alert people to anomalies, discontinuities, and shortfalls n Others aim to make decisions, either as recommendations to people or to act on behalf of people n Handing over decisions to systems has its pros and cons, thus their actions need to be monitored ... some decision making or help us make more informed decisions n Technologies that Support Decision Making Decision Support Systems n n n n Systems that support, not replace, managers in their decision- making. ..Systems for Supporting KnowledgeBased Work n Today we shall look at, ă ă ă ă ă n n Decision Support Systems (DSS) Data Mining Executive Information Systems (EIS), and Expert Systems Agent-based... consists of: ă The database management system (DBMS) ă The model base management system (MBMS) ă The dialog generation and management system (DGMS) Decision Support Systems The Architecture for