Decision Support Systems



Learning Objectives

‡ Identify the changes taking place in the form and use of decision support in e-business enterprises. ‡ Identify the role and reporting alternatives of management information systems.


8 Learning Objectives (continued) ‡ Describe how online analytical processing can meet key information needs of managers. ‡ Explain the decision support system concept and how it differs from traditional management information systems.

and business professionals: ± Executive information systems ± Enterprise information portals ± Enterprise knowledge portals 4 . managers.8 Learning Objectives (continued) ‡ Explain how the following information systems can support the information needs of executives.

fuzzy logic. ‡ How can expert systems be used in business decision-making situations? 5 .8 Learning Objectives (continued) ‡ Identify how neural networks. virtual reality. and intelligent agents can be used in business. genetic algorithms.

8 Section I ‡ Decision Support in Business 6 .

8 Business and Decision Support ‡ To succeed. 7 . companies need information systems that can support the diverse information and decision-making needs of their managers and business professionals.

Decisions. & Management ± The type of information required by decision makers is directly related to the level of management and the amount of structure in the decision situations. 8 .8 Business and Decision Support (continued) ‡ Information.

8 Business and Decision Support (continued) 9 .

8 Business and Decision Support (continued) ‡ Information Quality ± Timeliness ‡ ‡ ‡ ‡ Provided WHEN it is needed Up-to-date when it is provided Provided as often as needed Provided about past. and future time periods as necessary 10 . present.

or an internal or external focus ‡ Can reveal performance 11 .8 Business and Decision Support (continued) ‡ Information Quality (continued) ± Content ‡ Free from errors ‡ Should be related to the information needs of a specific recipient for a specific situation ‡ Provide all the information that is needed ‡ Only the information that is needed should be provided ‡ Can have a broad or narrow scope.

video.8 Business and Decision Support (continued) ‡ Information Quality (continued) ± Form ‡ Provided in a form that is easy to understand ‡ Can be provided in detail or summary form ‡ Can be arranged in a predetermined sequence ‡ Can be presented in narrative. numeric. or other forms ‡ Can be provided in hard copy. 12 . or other media. graphic.

8 Business and Decision Support (continued) 13 .

8 Business and Decision Support (continued) ‡ Decision Structure ± Structured decisions ‡ Involve situations where the procedures to be followed can be specified in advance ± Unstructured decisions ‡ Involve situations where it is not possible to specify most of the decision procedures in advance 14 .

but not enough to lead to a definite recommended decision 15 .8 Business and Decision Support (continued) ‡ Decision structure (continued) ± Semistructured decisions ‡ Some decision procedures can be specified in advance.

8 Business and Decision Support (continued) ± Amount of structure is typically tied to management level ‡ Operational ± more structured ‡ Tactical ± more semistructured ‡ Strategic ± more unstructured 16 .

8 Decision Support Trends ‡ The growth of corporate intranets. extranets and the Web has accelerated the development and use of ³executive class´ information delivery & decision support software tools to virtually every level of the organization. 17 .

8 Management Information Systems ‡ The original type of information system ‡ Produces many of the products that support day-to-day decision-making ‡ These information products typically take the following forms: ± ± ± ± Periodic scheduled reports Exception reports Demand reports and responses Push reports 18 .

8 Management Information Systems (continued) ‡ Management reporting alternatives ± Periodic scheduled reports ‡ Prespecified format ‡ Provided on a scheduled basis ± Exception reports ‡ Produced only when exceptional conditions occur ‡ Reduces information overload 19 .

8 Management Information Systems (continued) ‡ Management reporting alternatives (continued) ± Demand reports and responses ‡ Available when demanded. ‡ Not specifically requested by the recipient 20 . ‡ Ad hoc ± Push reports ‡ Information is sent to a networked PC over the corporate intranet.

and exception conditions ± Real-time 21 .8 Online Analytical Processing ‡ Enables managers and analysts to interactively examine & manipulate large amounts of detailed and consolidated data from many perspectives ± Analyze complex relationships to discover patterns. trends.

8 Online Analytical Processing (continued) ‡ Involves. ‡ From simple roll-ups to complex groupings of interrelated data ± Drill-Down ‡ Display detail data that comprise consolidated data 22 . ± Consolidation ‡ The aggregation of data..

helps analyze trends and find patterns 23 .8 Online Analytical Processing (continued) ± Slicing and Dicing ‡ The ability to look at the database from different viewpoints. ‡ When performed along a time axis.

8 Decision Support Systems ‡ Computer-based information systems that provide interactive information support during the decision-making process ‡ DSS¶s use ± ± ± ± Analytical models Specialized databases The decision maker¶s insights & judgments An interactive. computer-based modeling process to support making semistructured and unstructured business decisions 24 .

quick-response systems that are initiated and controlled by the decision maker ‡ DSS Models and Software ± Rely on model bases as well as databases ± Might include models and analytical techniques used to express complex relationships 25 .8 Decision Support Systems (continued) ‡ Designed to be ad hoc.

8 Decision Support Systems (continued) ‡ DSS models and software (continued) ± Can combine model components to create integrated models in support of specific types of business decisions 26 .

Decision Support Systems (continued) ‡ Geographic Information & Data Visualization Systems ± Special categories of DSS that integrate computer graphics with other DSS features ± GIS ‡ A DSS that uses geographic databases to construct and display maps and other graphics displays 27 .

8 Decision Support Systems (continued) ‡ Geographic information and data visualization systems (continued) ± Data visualization systems ‡ Represent complex data using interactive three-dimensional graphic forms ‡ Helps discover patterns. links. and anomalies 28 .

8 Using Decision Support Systems ‡ An interactive modeling process ‡ Four types of analytical modeling ± What-if analysis ± Sensitivity analysis ± Goal-seeking analysis ± Optimization analysis 29 .

or relationships among variables. and observes the resulting changes in the values of other variables 30 .8 Using Decision Support Systems (continued) ‡ What-If Analysis ± End user makes changes to variables.

8 Using Decision Support Systems (continued) ‡ Sensitivity Analysis ± A special case of what-if analysis ± The value of only one variable is changed repeatedly. and the resulting changes on other variables are observed ± Typically used when there is uncertainty about the assumptions made in estimating the value of certain key variables 31 .

then repeatedly changes other variables until the target value is achieved 32 .8 Using Decision Support Systems (continued) ‡ Goal-Seeking Analysis ± Instead of observing how changes in a variable affect other variables. goalseeking sets a target value (a goal) for a variable.

given certain constraints 33 .8 Using Decision Support Systems (continued) ‡ Optimization Analysis ± A more complex extension of goalseeking ± The goal is to find the optimum value for one or more target variables.

decision tree. trends. cluster detection. neural network.8 Using Decision Support Systems (continued) ‡ Data Mining for Decision Support ± Software analyzes vast amounts of data ± Attempts to discover patterns. or market basket analysis 34 . & correlations ± May perform regression.

8 Executive Information Systems ‡ EIS¶s combine many of the features of MIS and DSS ‡ Originally intended to provide top executives with immediate. easy access to information about the firm¶s ³critical success factors´ ‡ Alternative names ± Enterprise information systems ± Executive support systems 35 .

8 Executive Information Systems (continued) ‡ Features of an EIS ± Information presented in forms tailored to the preferences of the users ± Most stress use of graphical user interface and graphics displays ± May also include exception reporting and trend analysis 36 .

8 Enterprise Portals and Decision Support ‡ A Web-based interface and integration of intranet and other technologies that gives all intranet users and selected extranet users access to a variety of internal & external business applications and services 37 .

8 Enterprise Portals and Decision Support (continued) ‡ Business benefits ± More specific and selective information ± Easy access to key corporate intranet website resources ± Industry and business news ± Access to company data for stakeholders ± Less time spent on unproductive surfing 38 .


Knowledge Management Systems

‡ IT that helps gather, organize, and share business knowledge within an organization ‡ Hypermedia databases that store and disseminate business knowledge. May also be called knowledge bases ‡ Best practices, policies, business solutions ‡ Entered through the enterprise knowledge portal


Section II

‡ Artificial Intelligence Technologies in Business



Business and AI

‡ ³Designed to leverage the capabilities of humans rather than replace them,«AI technology enables an extraordinary array of applications that forge new connections among people, computers, knowledge, and the physical world.´

and feel ‡ Major thrust ± development of computer functions normally associated with human intelligence ± reasoning.8 Artificial Intelligence ‡ A field of science and technology based on disciplines such as computer science. problem solving 42 . psychology. walk. biology. linguistics. see. talk. mathematics. & engineering ‡ Goal is to develop computers that can think. learning. hear.

8 Artificial Intelligence (continued) ‡ Domains of AI ± Three major areas ‡ Cognitive science ‡ Robotics ‡ Natural interfaces 43 .

8 Artificial Intelligence (continued) ‡ Cognitive science ± Focuses on researching how the human brain works & how humans think and learn ± Applications ‡ ‡ ‡ ‡ ‡ Expert systems Adaptive learning systems Fuzzy logic systems Neural networks Intelligent agents 44 .

humanlike physical capabilities ‡ Natural interfaces ± Natural language and speech recognition ± Talking to a computer and having it understand ± Virtual reality 45 .8 Artificial Intelligence (continued) ‡ Robotics ± Produces robot machines with computer intelligence and computer controlled.

8 Neural Networks ‡ Computing systems modeled after the brain¶s mesh like network of interconnected processing elements. called neurons ‡ Goal ± the neural network learns from data it processes 46 .

solutions to problems 47 . but acceptable.8 Fuzzy Logic Systems ‡ A method of reasoning that resembles human reasoning ‡ Allows for approximate values and inferences ‡ Allows for incomplete or ambiguous data ‡ Allows ³fuzzy´ systems to process incomplete data and provide approximate.

randomizing. & other mathematical functions to simulate an evolutionary process that can yield increasingly better solutions ‡ Especially useful for situations in which thousands of solutions are possible & must be evaluated 48 .8 Genetic Algorithms ‡ Uses Darwinian.

entities.8 Virtual Reality ‡ Computer-simulated reality ‡ Relies on multi-sensory input/output devices ‡ Allows interaction with computersimulated objects. and environments in three dimensions 49 .

8 Intelligent Agents ‡ A ³software surrogate´ for an end user or a process that fulfills a stated need or activity ‡ Uses built-in and learned knowledge base about a person or process to make decisions and accomplish tasks 50 .

8 Expert Systems ‡ A knowledge-based information system that uses its knowledge about a specific. complex application area to act as an expert consultant ‡ Provides answers to questions in a very specific problem area ‡ Must be able to explain reasoning process and conclusions to the user 51 .

8 Expert Systems (continued) ‡ Components ± Knowledge base ± Software resources ‡ Knowledge base ± Contains » Facts about a specific subject area » Heuristics that express the reasoning procedures of an expert on the subject 52 .

8 Expert Systems (continued) ‡ Software Resources ± Contains an inference engine and other programs for refining knowledge and communicating » Inference engine processes the knowledge. and makes associations and inferences » User interface programs. including an explanation program. allows communication with user 53 .

8 Developing Expert Systems ‡ Begin with an expert system shell ‡ Add the knowledge base ‡ Built by a ³knowledge engineer´ ± Works with experts to capture their knowledge ± Works with domain experts to build the expert system 54 .

8 The Value of Expert Systems 55 .

8 The Value of Expert Systems (continued) ‡ Benefits ± Can outperform a single human expert in many problem situations ± Helps preserve and reproduce knowledge of experts ‡ Limitations ± Limited focus. inability to learn. maintenance problems. developmental costs 56 .

tactical. and operational decision making in business? 57 .8 Discussion Questions ‡ Is the form and use of information and decision support in e-business changing and expanding? ‡ Has the growth of self-directed teams to manage work in organizations changed the need for strategic.

8 Discussion Questions (continued) ‡ What is the difference between the ability of a manager to retrieve information instantly on demand using an MIS and the capabilities provided by a DSS? ‡ In what ways does using an electronic spreadsheet package provide you with the capabilities of a decision support system? 58 .

8 Discussion Questions (continued) ‡ Are enterprise information portals making executive information systems unnecessary? ‡ Can computers think? Will they EVER be able to? 59 .

virtual reality. and intelligent agents? What could be done to minimize such effects? 60 .8 Discussion Questions (continued) ‡ What are some of the most important applications of AI in business? ‡ What are some of the limitations or dangers you see in the use of AI technologies such as expert systems.

O'Brien.2004 61 . George M.. Marakas. Boston: McGraw-Hill/ Irwin. Management Information Systems: Managing Information Technology in the Business Enterprise 6th Ed.8 References ‡ James A.

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