CH01 withFigures

8/14/2019 CH01 withFigures

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Chapter 1

DECISION SUPPORTSYSTEMS AND

BUSINESSINTELLIGENCE


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Learni ng Obj ectiv es

Understand todays turbulent businessenvironment and describe how organizationssurvive and even excel in such an environment

Understand the need for computerized supportof managerial decision making

Understand an early framework for managerialdecision making

Learn the conceptual foundations of thedecision support systems (DSS) methodology


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Learni ng Obj ectiv es

Describe the business intelligence (BI)methodology and concepts and relate them toDSS

Describe the concept of work systems and itsrelationship to decision support

List the major tools of computerized decisionsupport

Understand the major issues in implementingcomputerized support systems


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Changi ng Busine ssEnvi ronments an d Comp uteri zedDeci si on Sup por t The business pressures-responses-

support model The business environment Organizational responses: be reactive,

anticipative, adaptive, and proactive Computerized support


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Manager ial Deci si onMaki ng The nature of managers work

Interpersonal Informational Decisional


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Manager ial Deci si onMaki ng


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Manager ial Deci si onMaki ng The process of decision making

1. Defining the problem (a decision situation that maydeal with some difficulty or with an opportunity)

2. Constructing a model that describes the real-worldproblem3. Identifying possible solutions to the modeled

problem and evaluating the solutions

4. Comparing, choosing, and recommending apotential solution to the problem


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Manager ial Deci si onMaki ng Decision support systems (DSS)

A conceptual framework for a process of supporting managerial decisionmaking,usually by modeling problems andemploying quantitative models for solution analysis


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Com pu teri zed Supportfor Deci si on Maki ng Why use computerized decision support

systems Speedy computations Improved communication and collaboration Increased productivity of group members Improved data management

Managing giant data warehouses


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Com pu teri zed Supportfor Deci si on Maki ng Why use computerized decision support

systems Quality support Agility support Overcoming cognitive limits in processing

and storing information

Using the Web Anywhere, anytime support


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Com pu teri zed Supportfor Deci si on Maki ng Cognitive limits

The limitations of the human mind relatedto processing information


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An Early Framew ork forComp uterized Decis ion

Support


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Support Degree of structuredness Four-phase decision making process

Intelligence Design Choice Implementation


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Support


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Support Types of control in all managerial activities Strategic planning Management control

Operational control The decision support matrix

For semistructured decisions and unstructured decisions , conventional MIS and MS tools are

insufficient Decision support systems (DSS) are used


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Support Computer support for structureddecisions Management science (MS) or operations

research (OR) The application of a scientific approach andmathematical models to the analysis and

solution of managerial decision situations(e.g., problems, opportunities)


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Support Computer support for structureddecisions Automated decision systems (ADS )

A business rules-based system that usesintelligence to recommend solutions torepetitive decisions (such as pricing)


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Support


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Support Computer support for unstructureddecisions Customized solutions intuition and judgment Computerized communication and

collaboration technologies

Knowledge management


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Support Computer support for semistructured problems A combination of both standard solution procedures

and human judgment

Management Science can provide models for thestructured portion For the unstructured portion, a DSS can improve the

quality of the information on which the decision isbased by providing a range of alternative solutionsalong with their potential impacts


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Support The benefits of computerized decision support Companies work in an unstable or rapidly changing

economy. There are difficulties in tracking the numerous

business operations. Competition has increased especially global

competition. Electronic commerce is changing the ways business

is done. Existing information systems do not fully supportdecision making.


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Support The benefits of computerized decision support Management mandates computerized decision

support. Higher decision quality is needed. Improved communication. Improved customer and employee satisfaction. Timely information is provided.

Cost reduction is achieved. Employees productivity has been improved.


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The Concept of De cisi onSup port Systems (DSS ) DSS as an Umbrella term : Describes any

computerized system that supports decisionmaking in an organization

DSS as a specific application The architecture of DSS Data Models manipulate data as related to a specific situation Knowledge component Users User interface


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The Concept of De cisi onSup port Systems (DSS )


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The Concept of De cisi onSup port Systems (DSS )

Types of DS S model-oriented DSS: quantitative models used to

generate a recommended solution to a problem data-oriented DSS: support ad-hoc reporting and

queries


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A F k f


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A Frame work forBusi ness Intel l igence

(BI) BI architecture Data warehouse Business analytics

Performance management (BPM )

A F k f


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A Frame work forBusi ness Intel ligence

(BI)

A Frame work for


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(BI) Data warehouse Originally, included historical data that were

organized and summarize, so end users couldeasily view or manipulate data and information

Today, some data warehouses include currentdata as well, so they can provide real timedecision support

A Frame work for


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(BI) Business analytics Reporting and queries Advanced analytics Data, text and Web mining and other

sophisticated mathematical and statistical tools

A Frame work for


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(BI) Data mining A process of searching for unknownrelationships or information in largedatabases or data warehouses, usingintelligent tools such as neural computing ,predictive analytics techniques, or

advanced statistical methods

A Frame work for


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(BI) Business performance management (BPM)An advanced performance measurement andanalysis approach that embraces planning and

strategy BPM extends the monitoring, measuring, and

comparing of sales, profit, cost, profitability, and other performance indicators by introducing the concept of

management and feedback BPM provides a top-down enforcement of corporate-wide strategy


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A Frame work for


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(BI) Styles of BI1. Report Delivery and Alerting2. Enterprise Reporting (dashboard, scorecard)

3. Cube Analysis (Slice and Dice Analysis)4. Ad-hoc Query5. Statistics and Data Mining

A Frame work for


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(BI) Benefits of BI Faster, more accurate reporting Improved decision making Improved customer service Increased revenue

A Frame work for


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(BI) The DSS-BI connection The architecture is very similar since BI

evolved from DSS

DSS are constructed to directly supportspecific decision making; BI systems aregeared to provide accurate and timelyinformation ( indirect support)

BI has an executive and strategy orientationwhile DSS has been oriented toward analysts

A Frame work for


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(BI) The DSS-BI connection1. BI systems are constructed with commercially

available tools and components that are fittedto the needs of organizations; DSS moreprogramming is used to construct customsolutions to very unstructured problems

2. DSS were developed mostly in the academicworld; BI were developed mostly by softwarecompanies

3. Many tools used by BI are also consideredDSS tools (e.g., data mining and predictive

analysis )

A Frame work for


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(BI) Management support systems (MSS)A system that applies any type of decisionsupport tool or technique to managerialdecision-making

A Work Syste m


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A Work Syste mVi ew of Deci si on

Sup port Work system A system in which human participantsand/or machines perform a businessprocess using information, technology,and other resources to produce productsand/or services for internal or external

customers

A Work Syste m


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A Work Syste mVi ew of Deci si on

Sup port Nine elements of a work system1. Business process2. Participants

3. Information4. Technology5. Product and services6. Customers

7. Infrastructure8. Environment9. Strategy

e a or oo s an


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e a or oo s anTechni quesof Manageri al Deci si on

Support Data management Reporting status

tracking Visualization Business analytics Strategy and

performancemanagement

Communication andcollaboration

Knowledgemanagement

Intelligent systems

Enterprise systems

Computerized Tools for Decision Support

e a or oo s an


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e a or oo s anTechni quesof Manageri al Deci si on

Support Tools-Web connection All of these tools are available in both web-

based and non web-based formats

Hybrid (integrated) support systems A support system that uses several toolsand techniques to assist management insolving managerial or organizationalproblems and assess opportunities andstrategies

Impl ementi ng Co mput er Based


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Impl ementi ng Co mput er- BasedManageri al D eci si on SupportSystems Developing or acquiring support systems Justification and cost-benefit analysis Security and protection of privacy Integration of systems and applications The Web in DSS/BI implementation

Information portals and MSS

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