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MGT300 - Chapter 9: Enabling The Organization - Decision Making



Reasons for the growth of decision making information system:
  
  • People need to analyze large amounts of information
  • People must make decision quickly
  • People must apply sophisticated analysis techniques such as modelling and forecasting, to make good decisions
  • People must protect the corporate asset of organizational information
 Model - a simplified representation or abstraction of reality

- IT systems in an enterprise

 
 
TRANSACTION PROCESSING SYSTEMS
 
Moving up through the organizational pyramid users move from requiring transactional information to analytical information 
· Transaction processing system - the basic business system that serves the operational level (analysis) in an organization
· Online transaction processing (OLTP) - the capturing of transaction and event information using technology to (1) process the information according to defined business rules,(2) stores the information , (3) updated existing information to reflect the new information
· Online analytical processing (OALP) - the manipulation of information to create business intelligence in support of strategic decision making
DECISION SUPPORT SYSTEMS (DSS)

Models information to support managers and business professional during the decisions-making process

Three quantitative models used by DSSs include :
1. Sensitivity analysis  - the study of the impact that changes in one ( or more) parts of the models.
2. What-if analysis - checks the impact of a change in an assumptions on the processed solution
3. Goal-seeking analysis - finds the inputs necessary to achieve a goal such as a desired level of output
EXECUTIVE INFORMATION SYSTEMS ( EIS )

A specialized Decision Support Systems that support senior level executive within the organization

Most EISs offering the following capabilities :
1. Consolidation - involves the aggregation of information and features simple roll-ups to complex groupings of interrelated information
2.  Drill-down - enables users to get details and details of details , of information .
3. Slice and dice - looks at the information from different perspective 
Digital dashboard is integrates information from multiples components and presents it in a unified display 


ARTIFICIAL INTELLIGENCE (AI )

· Intelligent systems - various commercial applications of artificial intelligence
· Artificial intelligence ( AI ) - simulates human intelligence such as the ability to reason and learn 
Advantages : can check info on competitor

· The ultimate goal of  AI is the ability to build a system that can mimic human intelligence
  Four most common categories of AI include : 
· Expert system  - computerized advisory programs that imitate the reasoning processes of experts in solving the difficult problems. Eg. Playing chess
· Neural Network - attempts to emulate the way the human brain works 
- Fuzzy logic -a mathematical method of handling imprecise or subjective information

· Genetic algorithm - an artificial intelligent systems that mimics the evolutionary , survival-of-the-fittest process to generates increasingly better solutions to a problems
· Intelligent agent - special-purposed knowledge based information system that accomplishes specific tasks on behalf of its users
- Multi-agent systems
- Agent-based modelling
DATA MINING

Data mining software includes many forms of AI such as neural networks and expert systems


Common forms of data-mining analysis capabilities include :
· Cluster analysis 
*a techniques used to divide an information set into mutually exclusive groups such that the members of each groups are as close together as possible to one another and the different groups are as far apart as possible  
* depend on cluster analysis to segment customers information and identify behavioral traits 

· Association detection - revels the degree to which variables are related and the nature and frequency of these relationships in the information
 - Market basket analysis - analyzes such items as Web sites and check out scanner information to detect customers' buying behavior and predict future behavior by identifying affinities among customers' choices of products and services

· Statistical analysis -  performs such function as information correlation,distributions,calculations and variance analysis 
- Forecast - predictions made on the basis of times - series information
- Time - series information - time-stamped information collected at a particular frequency
 
 

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