Professional Documents
Culture Documents
Department of Management
Admas University
Decision Support In Business
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Content
Introduction
Barriers to good decision making
Trends in Information System
Types of Information System
g Transaction Processing Systems
g Decision Support Systems
g Executive information
g Expert Systems
The Role of e-Business in Business
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Introduction
Business decisions are increasingly difficult to make
Dramatic increase in the internal business data available to
managers
Globalization
The speed of commerce
The increased number of business choices available
Group decision making
Teams may include members from many companies
Members may have different backgrounds and opinions
Difficult to reach consensus
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Barriers to Good Decision Making
1. Human cognition
Our mental ability to comprehend and understand something
2. Human perception
Difficulty isolating problems
Tend to think of only narrow range of possible solution
3. Human bias
Tendency to shape responses based on stereotypes, memory, and
current position
4. How to overcome the barriers?
Use information systems that support the diverse information and
decision-making needs of managers and business professionals.
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Trends in Information System
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Types of Information System
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A. Types of Operations Support
Systems
1. Transaction Processing Systems
Record and process data from business transactions
Are designed to process day to day and routine transactions
efficiently and accurately.
Examples: sales processing, inventory systems, accounting
systems
TPS processing transaction into two ways:-
A. Batch Processing:- Data is accumulated over a period time and
processed periodically. E.g. a bank processes all checks received in a
batch at night
B. Real Time Processing: Data is immediately processed after a
transaction occurs.
E.g. 1: Sales and Inventory Processing
E.g. 2 transfers funds from a customer’s bank account to a retail outlet’s
account after scanning a customer’s debit card.
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Types of Operations Support Systems
2. Process Control Systems
Monitor and control physical processes
Example:
in a petroleum refinery use sensors to monitor chemical processes
power generation and steel production systems
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B. Types of Management Support
Systems
1. Management Information Systems (MIS)
Provide information in the form of reports and displays to managers
MIS summarize and report on the company’s basic operations
using data supplied by transaction processing systems.
Example: daily sales analysis reports
2. Decision Support Systems (DSS)
Provide interactive ad hoc support for decision making
Although DSS use internal information from TPS and MIS, they
often bring in information from external sources, such as current
stock prices or product prices of competitors.
Example: A production manager may use a DSS to decide how much
product to manufacture, based on the expected sales associated with
a future promotion and the location and availability of the raw
materials necessary to manufacture the product.
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Cont’d
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Cont’d
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Cont’d
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Operational or Management Systems
Expert Systems
Provide expert advice
Example: credit application advisor
Knowledge Management Systems
Support creation, organization and dissemination of business
knowledge throughout company
Example: Intranet access to best business practices
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Classifications of IS by scope
1. Functional business systems
Focus on operational and managerial applications of basic
business functions
Examples: support accounting, finance or marketing
2. Strategic information systems
apply information technology to a firm’s products, services, or
business processes to help it gain a strategic advantage over
its competitors.
Examples: shipment tracking, e-commerce web systems
3. Cross-functional information systems
Systems that are combinations of several types of information
systems
Provide support for many functions
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The Role of e-Business in Business
The Internet and related technologies and applications have
changed the ways businesses operate and people work, as well
as how information systems support business processes,
decision making, and competitive advantage.
E-Business:
Use of digital technology and the Internet to execute the major
business processes in the enterprise. E-business includes activities
for the internal management of the firm and for coordination with
suppliers and other business partners.
companies rely on e-business applications to:
reengineer internal business processes,
implement e-commerce systems with their customers and
suppliers, and
promote enterprise collaboration among business teams and
workgroups.
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e-business applications
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Cont’d
Enterprise Collaboration Systems:
Support communication, coordination, and collaboration
among networked teams/workgroups.
E-Commerce:
Is the part of e-business that deals with buying, selling,
marketing and servicing products, services, and information
over computer networks.
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E-commerce: Digital Markets,
Digital Goods
E-commerce is about digitally enabled commercial
transactions between and among organizations and
individuals.
E-commerce began in 1995 when Netscape.com
accepted the first ads
What makes E-commerce different?
Ubiquity - available just about everywhere, at all times
Global reach - the technology reaches across national
boundaries, around the Earth
Richness - Video, audio, and text messages are possible
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Cont’d
Information Density. The technology reduces information costs and
raises quality
Information processing, storage, and communication costs drop
dramatically, whereas currency, accuracy, and timeliness improve greatly.
Information becomes plentiful, cheap, and more accurate.
Personalization/Customization. The technology allows personalized
messages to be delivered to individuals as well as groups
Social technology. User content generation and social networking.
Allow users to create and share content with their personal friends
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Cont’d
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Types of E-commerce
Based on nature of the participants in the electronic
commerce transaction:
Business-to-consumer (B2C) e-commerce involves retailing
products and services to individual shoppers.
Business-to-business (B2B) e-commerce involves sales of
goods and services among businesses.
Consumer-to-consumer (C2C) e-commerce involves
consumers(as well as business) selling directly to consumers.
E.g. eBay
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E-commerce Revenue Model
Advertising Revenue Model
Sales Revenue Model E.g. Amazon
Subscription Revenue Model E.g. Netflix, The Wall
Street Journal, Microsoft’s Xboxlive.com (video
games), etc
Free/Freemium Revenue Model - offer basic services
or content for free, while charging a premium for
advanced or special features
One problem with this model is converting people from being
“free loaders” into paying customers. “Free” can be a powerful
model for losing money.
Transaction Fee Revenue Model E.g. eBay
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