Managing the Networked EnterpriseMBA 501
WEEK 3: JANUARY 26Essential technologies in the digital economy and today's businesses
Systems for supporting decision-making, collaboration and knowledge work
LECTURE PLAN JANUARY 26TH● Team assignments, discussion and project clarity●● Topics●● What information managers need, how they get it, and what it all means● How information systems systems support decision making & operations ● Adoption in today’s organization● Considerations for our organizational culture●● Case Study: Air Canada
Business Information Systems & What Managers Need
Discuss - What type of Information to Managers need to be successful today?
What challenges do managers face when making decisions?
For business managers, decision making or choosing from a range of alternatives is the essence of
management
● Decision making process is much more complicated for three reasons:○ The concept of rationality is hard to define
○ Good outcomes may occasionally result from irrational processes, and bad outcomes can
result from good processes
○ Humans intend to be rational, but there are limits on our cognitive capabilities
Characteristics of Good Information● Accurate
○ Correct and complete
○ Crucial for management
○ Cross-check information to ensure accuracy
● Timely○ Produced in time for intended use
● Relevant○ To context
○ To subject
Business Information Systems● Business Information system (BIS): a system that captures data, transforms, and
distributes it in the form of information needed by managers and staff to support business activities.
●● Today, almost all organizations use Information and Communication Technologies to:
○ efficiently manage their operations○ help managers make better decisions and achieve competitive advantage ○ facilitate seamless internal and external communications with their employees, customers,
partners, and other stakeholders●
What does IS mean for the organization?● Extract value: patterns, predictions and other insights—from raw digital information.
○ Efficiency & effectiveness
○ Transparency
○ Communication
●● Producing crucial feedback loops to support all levels of the organization
○ Operational → Management → Strategic
○
Bringing the organization together
Decision Making and Business Intelligence
Why Do Managers Need IS? Business Intelligence● Business Intelligence (BI)
○ Share and analyse data across the enterprise. BI can come in the form of dashboards, automated reporting and analysis tools used to monitor the organizational performance.
■ BI supports informed decision making by everyone, from executives to line managers and accountants.
● A typical enterprise has many Business Units(BU). ○ Continuously communicate and exchange data with each other.
●● Organizational success depends on the effective communication and data exchange
within and between BU’s ○ Also, third parties such as Vendors, Outsource Professionals and Customers.
Types of Business Intelligence Systems Five categories of BI systems:
1. Group decision support systems (GDSS)a. Allow multiple parties to participate in decision making and improve outcomes by reducing often
inherent biasesb. Across different geographical locations and times
2. Reporting systemsa. Integrate data from multiple sources
b. Process data by sorting, grouping, summing, averaging, and comparingc. Format results into reportsd. Improve decision making by providing right information to right user at right time
Continued 3. Data-mining systems
a. Process data using sophisticated statistical techniquesb. Regression analysis
c. Decision tree analysisd. Look for patterns and relationships to anticipate events or predict future outcomese. Market-basket analysisf. Predict donations
4. Knowledge-management (KM) systemsa. Create value from intellectual capitalb. Collect and share human knowledgec. Supported by the five components of the information systemd. Foster innovation, Improve customer service, Increase organizational responsiveness, Reduce costs
5. Expert systemsa. Encapsulate the knowledge of human experts in the form of If/Then rulesb. If condition is true, Then initiate procedurec. Improve diagnosis and decision making in non-experts
Case Example: Group decision support systems (GDSS)
● Plant manager not being able to identify the cause of problems with shop floor control. After having a meeting for two hours with plant personnel all that resulted were arguments and bad feelings.
○ After meeting the manager decided to have ten plant employees, himself, and two junior analysts participate in a GDSS program. They would use electronic brainstorming and voting to resolve the shop floor control problem.
○ The manager and the facilitator decided the topic would be "What are the key issues in improving shop floor control?"
○ After brainstorming for 35 minutes and compiling 645 lines of suggestions, ideas and comments on how to improve shop floor control, the manager found that he had gotten useful information about the issue for the first time.
○ A list was compiled of the comments and then the members of the group ranked them in order of importance. The results were displayed and a discussion ensued to facilitate informed decision making
Case Examples from Prism:
● The DC Metro Area Transit Authority does strategic resource allocation● District and school improvement planning
Case Example: Data Mining Total Rewards Program: Harrah’s Entertainment
● Mined customer data to create
○ 90 clusters profiles
○ Calculates the ROI on each customer
○ Found that 80% of profits from slot machine and electronic game machine players not
‘high rollers’
○ Within first two years of program, revenue from repeat customers increased by $100
million
Case Example: Expert System 1. Authorizer’s Assistant one of most successful commercial uses of expert system
a. Approves all AmEx credit card transactions and assesses for fraud based on over 2600 rules
i. Credit worth of card holdersii. Bill payment
iii. Purchases within normal spending patterniv.
2. Rules derived from authorizers with various levels of expertisea. Customer sensitive (to avoid customer embarrassment)b. Can be changed to meet changing business demands
Common Systems for Managers
Enterprise Resource Planning● Enterprise Resource Planning (ERP):●
○ Facilitates efficiency and problem-solving in production, finances, human resources, sales and distribution, by connecting data and departments within an organization.■ finance, HR, manufacturing, warehouse,
planning, purchasing, inventory, sales, and marketing.
■○ Streamlines systems in a manner that optimizes
departments and processes for the operational and financial benefit of the company.
○○ Examples:
■ SAP, Oracle, PeopleSoft, Microsoft Dynamics, and more
Inventory Management Systems
Customer Relationship Management
● Customer Relationship Management (CRM) is a strategy for managing all your company's relationships and interactions with your customers and potential customers.
● Enables you to:○ focus on your organisation’s
relationships with individual people – whether those are customers, service users, colleagues or suppliers.
Customer Relationship Management
eCommerce
INFORMATION VALUE, ADOPTION & THINKING
AHEAD
The Value of Information: Consumer Facing
● Facebook and Google initially used the data they collected from users to target advertising
better.
○ In recent years they have discovered that data can be turned into any number of
artificial-intelligence (AI) or “cognitive” services, some of which will generate new
sources of revenue.
■ These services include translation, visual recognition and assessing someone’s personality by sifting through their writings—all of which can be sold to other firms to use in their own products.
The Value of Information: Consumer Facing● Users write comments, “like” posts and otherwise engage with Facebook
○ The more FaceBook learns about those users and the better targeted the ads on news
feeds become.
○ Similarly, the more people search on Google, the better its search results turn out.
● Uber is worth an estimated $68bn, it is in part because it owns the biggest pool of data about
supply (drivers) and demand (passengers) for personal transportation
● Tesla is a maker of 21st century electric cars.
○ But its latest models collect mountains of data, which allow the firm to optimise its
self-driving algorithms and then update the software accordingly.
● Caesars Entertainment filed for bankruptcy in 2015.
○ Its most valuable asset, at $1bn, was determined to be the data it is said to hold on the
45m customers
Emailing the boss
Checking employee attendance Looking at
Financials
Working
Lost signal!
Consideration for Managers
● The networked enterprise is meant to make us more efficient but…
●○ Does it actually, or are we just hyper connected and overly informed? Are we moving
away from fact based decision models to speculation?
○○ What does this mean for our world of work?
■ Works happens between communications “work moments”■ Organizations are made up of PEOPLE. Are we becoming “alone, together”?
○
CASE DISCUSSION: AIR CANADA
Friday February 2 Class ● Go to website: https://carsonmcpherson.ca/mba-501/ ● ● Review readings, etc.●● See you next week
