In this chapter students will be able to: Identify the changes taking place in the form and use of decision support in business, identify the role and reporting alternatives of management information systems, describe how online analytical processing can meet key information needs of managers,...
Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 10 - Chapter 10 Decision Support Systems Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 10 - Learning Objectives Identify the changes taking place in the form and use of decision support in business Identify the role and reporting alternatives of management information systems Describe how online analytical processing can meet key information needs of managers Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 10 - Learning Objectives Explain the decision support system concept and how it differs from traditional management information systems Explain how the following information systems can support the information needs of executives, managers, and business professionals: • • • Executive information systems Enterprise information portals Knowledge management systems Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 10 - Learning Objectives Identify how neural networks, fuzzy logic, genetic algorithms, virtual reality, and intelligent agents can be used in business Give examples of several ways expert systems can be used in business decision-making situations Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 10 - Why Study Decision Support Systems? • As companies migrate toward responsive e-business models, they are investing in new data-driven decision support application frameworks that help them respond rapidly to changing market conditions and customer needs Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 10 - Case #1: Centralized Business Intelligence Strategic Business Intelligence Approach: • Standardize on fewer business-intelligence tools and make them available throughout organizations even before projects are planned • Create dedicated groups called competency centers to manage business-intelligence projects and provide technical and analytical expertise to other employees Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 10 - Case #1: Centralized Business Intelligence Competency Center Approaches: • Centralized vs Virtual Part of IT department vs independent Copyrightâ2006,TheMcGrawưHillCompanies,Inc.Allrightsreserved 10 - Case #1: Centralized Business Intelligence What is business intelligence? Why are business-intelligence systems such a popular business application of IT? What is the business value of the various BI applications discussed in the case? Is a business-intelligence system an MIS or a DSS? Why does it appear that companies are placing more and more responsibility for BI in the hands of the IT department? Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 10 - Information, Decisions and Management Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 10 - 10 User Interface Agents • Interface Tutors – observe user computer operations, correct user mistakes, and provide hints and advice on efficient software use • Presentation – show information in a variety of forms and media based on user preferences • Network Navigation – discover paths to information • Role-Playing – play what-if games and other roles to help users understand information and make better decisions Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 10 - 62 Information Management Agents • Search Agents – help users find files and databases, search for desired information, and suggest and find new types of information products, media, and resources • Information Brokers – provide commercial services to discover and develop information resources that fit the business or personal needs of a user • Information Filters – receive, find, filter, discard, save, forward, and notify users about products received or desired Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 10 - 63 Case #3: Agent-Based Modeling for SCM • In Proctor & Gamble’s computer simulations, software agents represent the individual components of the supply systems, such as trucks, drivers, stores, and so on • The behavior of each agent is programmed via rules that mimic actual behavior, such as, “Dispatch this truck only when it is full” • The simulations let P&G perform what-if analysis to test the impact of new logistics rules on three key metrics: inventory levels, transportation costs, and in-store-stock-outs Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 10 - 64 Case #3: Agent-Based Modeling for SCM Change Areas: • Relaxation of rigid rules, often counter intuitively, in order to improve the overall performance of the supply network • More flexibility in manufacturing More flexibility in distribution Copyrightâ2006,TheMcGrawưHillCompanies,Inc.Allrightsreserved 10 - 65 Case #3: Agent-Based Modeling for SCM Do you agree with Proctor & Gamble that a supply chain should be called a supply network? Why or why not? What is the business value of agent-based modeling? Use P&G and other companies in this case as examples Visit the website of NuTech Solutions How does NuTech use AI techniques to help companies gain “adaptive” business intelligence? Give several examples from the website case studies Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 10 - 66 Case #4: Web-Based Tools • Many large corporations are turning to Web-based financial and analytical tools to rapidly consolidate and present key financial data on a daily, weekly, or monthly basis • Such companies can close their books for all divisions on the same system within two hours after the close of business at the end of each month Copyrightâ2006,TheMcGrawưHillCompanies,Inc.Allrightsreserved 10 - 67 Case #4: Web-Based Tools Business intelligence tools, permit multidimensional views of profit-and-loss data Such data can quickly be analyzed by switching the columnar and row data, and also bringing in different dimensions or measures such as budget or prior year, then drilling down to get subsets of the data Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 10 - 68 Case #4: Web-Based Tools What are the business benefits and limitations of Boehringer’s Web-based financial analysis and reporting systems? Which of Boehringer’s financial analysis and reporting systems are MIS tools? DSS tools? Why? Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 10 - 69 Case #4: Web-Based Tools How could the Cognos tools used by Boehringer be used for marketing and other business analysis and reporting applications? Visit the Cognos website to help you answer Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 10 - 70 Summary • Information systems can support a variety of management decision-making levels including strategic, tactical and operational as well as structured, semi structured and unstructured • Decision support in business is changing, driven by rapid developments in end user computing and networking Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 10 - 71 Summary • Management information systems provide prespecified reports and responses to managers on a periodic, exception, demand, or push reporting basis, to meet their need for information to support decision making • Online analytical processing interactively analyzes complex relationships among large amounts of data stored in multidimensional databases Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 10 - 72 Summary • Data mining analyzes the vast amounts of historical data that have been prepared for analysis in data warehouses • Decision support system are interactive, computer-based information systems that use DSS software and a model base and database to provide information tailored to support semi structured and unstructured decisions faced by individual managers Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 10 - 73 Summary • Executive information systems are easy to use and enable executives to retrieve information tailored to their needs and preferences • Enterprise information and knowledge portals provide a customized and personalized Webbased interface for corporate intranets to give their users easy access to a variety of internal and external business applications, databases, and information services that are tailored to their individual preferences and information needs Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 10 - 74 Summary • The goal of artificial intelligence is the development of computer functions normally associated with human physical and mental capabilities • Expert systems are knowledge-based information systems that use software and a knowledge base about a specific, complex application area to act as expert consultants to users in many business and technical applications Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 10 - 75 Chapter 10 End of Chapter Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 10 - 76 ... Objectives Explain the decision support system concept and how it differs from traditional management information systems Explain how the following information systems can support the information needs... Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 10 - 20 Decision Support System Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 10 - 21 Management Information Systems (MIS) Definition: • An information system... Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 10 - Information, Decisions and Management Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 10 - 10 Levels of Management Decision Making • Strategic