MIS – Lecture-4

N P Singh
 Enhancing Decision Making

 Opening Case- Big Data + IoT = PA

 What are the different types of decisions, and
how does the decision process work?
 How do IS support the activities of managers
and management decision making
 How do BI and BA support Decision Making?
 How do different decision making
constituencies in an organization use business
intelligence
Big data and the IoTs Drive Precision
Agriculture
 Big Data
 Big Data is a collection of data that is huge in volume, yet
growing exponentially with time
 Big Data analytics examples includes stock exchanges,
social media sites, jet engines, etc.
 Big Data could be 1) Structured, 2) Unstructured, 3) Semi-
structured
 Volume, Variety, Velocity, and Variability are few Big Data
characteristics
 Improved customer service, better operational efficiency,
Better Decision Making are few advantages of Big data
Big Data Companies

 #1) iTechArt #2) InData Labs

 #3) ScienceSoft #4) RightData
 #5) Integrate.io #6) Oxagile
 #7) IBM #8) HP Enterprise
 #9) Teradata #10) Oracle
 #11) SAP #12) EMC
 #13) Amazon #14) Microsoft
 #15) Google #16) VMware
 #17) Splunk #18) Alteryx
 #19) Cogito
 Internet of Things

 IoT, is a system of interrelated computing devices,

mechanical and digital machines, objects, animals or
people that are provided with unique identifiers (UIDs) and
the ability to transfer data over a network without requiring
human-to-human or human-to-computer interaction.
 A thing in the internet of things can be a person with a
heart monitor implant, a farm animal with a biochip
transponder, an automobile that has built-in sensors to
alert the driver when tire pressure is low or any other
natural or man-made object that can be assigned an
Internet Protocol (IP) address and is able to transfer data
over a network.
 IoT Companies
 #1) Andersen Inc. (New York, US)
 #2) ScienceSoft (USA & Europe)
 #3) iTechArt (New York, US)
 #4) Oxagile (New York, US)
 #5) Style Lab IoT Software Company (San Francisco, CA)
 #6) HQ Software Industrial IoT Company (USA & Europe)
 #7) PTC (Boston, Massachusetts)
 #8) Cisco (San Jose, CA)
 #9) ARM IoT Security Company (Cambridge, Cambs)
 #10) Huawei (Shenzhen, Guangdong)
 #11) GE Digital (San Ramon, California)
 #12) Bosch IoT Sensor Company (Farmington Hills, MI)
 #13) SAP (Walldorf, Germany)
 #14) Siemens IoT Analytics Company (Berlin and Munich, Germany)
 #15) IBM (New York, U.S.)
 Case- Precision Farming
 In fall 2016, the university began installing an
Internet of Things (IoT) network on its 1,408-acre
research farm, the Agronomy Center for Research
and Education (ACRE).
 The system captures terabytes of data daily from
sensors, cameras, and human inputs. To collect,
aggregate, process, and transmit such large
volumes of data back to Purdue’s HPE
supercomputer, the university is deploying a
combination of wireless and edge computing
technologies.
Continue.
 They include solar-powered mobile Wi-Fi hotspots, an
adaptive weather tower providing high-speed
connectivity across the entire ACRE facility, and the
PhenoRover, a semi-automated mobile vehicle that
roams throughout ACRE research plots capturing real-
time data from plant-based sensors.
 Purdue is also experimenting with drones for plant-
growth data collection. ACRE researchers can enter
data into a mobile device on-site and transmit them
via the wireless network to an HPE data center for
analysis.
Precision Agriculture

 Precision agriculture (PA) is the science of improving

crop yields and assisting management decisions
using high technology sensor and analysis tools.
 Precision farming serves economic and ecological
improvements:
 Reduction of resources (seed, fertilizer, pesticides, fuel,...)
 Reduction of machine and work hours
 Improvement of crop yield and crop quality
 Minimization of environmental impact
 Complete documentation of the production process
 Precision Agriculture System

Identify Technologies Explosive Population Growth

Identify Decisions for Opportunities from new
Improvement technologies

Collect Agriculture
Data
Revise Farm
Production Processes

Wireless Sensors, Increased

WN,SC, BI Analytic Determine optimal
Crop Yield,
S/W, PhenoRover, water/fertilizer/seed amounts
Reduce Cost
MD, Computerized Adjust Planting patterns
planting / spraying
Machines
Decision Making and Information
Systems
• Business value of improved decision
making
• Improving hundreds of thousands of “small” decisions adds up to
large annual value for the business
• Types of decisions:
• Unstructured: Decision maker must provide judgment, evaluation,
and insight to solve problem
• Structured: Repetitive and routine; involve definite procedure for
handling so they do not have to be treated each time as new
• Semistructured: Only part of problem has clear-cut answer provided
by accepted procedure
Decision Making and Information
Systems
• Senior managers:
• Make many unstructured decisions
• E.g. Should we enter a new market?

• Middle managers:
• Make more structured decisions but these may include unstructured
components
• E.g. Why is order fulfillment report showing decline in Minneapolis?

• Operational managers, rank and file

employees
• Make more structured decisions
• E.g. Does customer meet criteria for credit?
Decision Making and Information
Systems
Information Requirements of Key Decision-Making Groups in a Firm
Decision Making and Information
Systems
• Four stages of decision making
1. Intelligence
• Discovering, identifying, and understanding the problems occurring in
the organization
2. Design
• Identifying and exploring solutions to the problem
3. Choice
• Choosing among solution alternatives
4. Implementation
• Making chosen alternative work and continuing to monitor how well
solution is working
Decision Making and Information
Systems
Stages in
Decision Making
Business Value of Enhance Decision
Making
How do information systems support the activities
of managers and management decision making?

 Managerial Roles

 Let’s compare the classical model of management with the behavioral model. The
former describes the five classical functions of managers as:
 Planning
 Organizing
 Coordinating
 Deciding
 Controlling

 Behavioral models of managers dissect the many activities involved in the five
functions of management. That is, managers:
 Perform a great deal of work at an unrelenting pace.
 Activities are fragmented.
 Prefer current, specific, and ad hoc information.
 Prefer oral communications rather than written documentation.
 Maintain a diverse and complex web of contacts.
Continued….

 Now, let’s take all of these activities and

categorize them into three managerial roles:
 Interpersonal: Act as figureheads, leaders,
and liaisons
 Informational: Act as nerve centers,
disseminators, and spokespersons
 Decisional: Act as entrepreneurs, handle
disturbances, allocate resources, negotiate
and mediate conflicts
Managerial Role and Supporting
Information Systems
Decision Making and Information
Systems
• Three main reasons why investments in
information technology do not always
produce positive results
1. Information quality
• High-quality decisions require high-quality information

2. Management filters
• Managers have selective attention and have variety of biases that
reject information that does not conform to prior conceptions

3. Organizational culture
• Strong forces within organizations resist making decisions calling for
major change
How do business intelligence and business analytics support
decision making?

 What Is Business Intelligence?

 Business intelligence describes how businesses
collect, store, clean, and disseminate useful
information to executives, managers, and
employees.
 The Business Intelligence Environment
 Data from the business environment: Integrating
and organizing structured and unstructured data from
different sources that people can analyze and use.
 Business intelligence infrastructure: Database
systems that process relevant data stored in
transactional databases, data warehouses, or data
marts.
 Business analytics toolset: Software tools that
managers use to analyze data, produce reports,
respond to questions, and track their progress using
key performance indicators (KPI).
Continued…
 Managerial users and methods: Business performance
management and balanced scorecard methods that help
managers focus on key performance indicators and industry
strategic analyses. Requires strong executive oversight to
ensure managers are focusing on the right issues and not just
producing reports and dashboard screens because they can.
 Delivery platform—MIS, DSS, and ESS: All the information
from MIS, DSS, and ESS are integrated and delivered to the
appropriate level of management.
 User interface: BI and BA systems make it easy to visually
display data, thereby making it easy to quickly understand
information on a variety of computing devices.
BI and Analytics for Decision Support
 Business Intelligence and Analytics
Capabilities
 Production reports: Predefined reports based on industry
specific requirements.
 Parameterized reports: Pivot tables help users filter data
and isolate impacts of parameters chosen by users.
 Dashboards/scorecards: Visual reports that present
performance data chosen by users.
 Ad hoc query/search/report creation: Users create their own
reports based on data they choose.
 Drill down: Users initially receive high-level data summaries
and then drill down to more specific data.
 Forecasts, scenarios, models: User can perform linear
forecasting, what-if scenario analysis, and analyze data using
standard statistical tools.
Examples of Business Intelligence
Predefined Production Reports
How do different decision-making
constituencies in an organization use BI?
 Decision Support for Operational and Middle
Management
 Middle management also relies on MIS systems for
the bulk of their information.
 Here are the characteristics of a typical MIS
system:
 Used for structured and semi structured decisions
 Reports based on routine flows of data
 Provide general control of the organization
 Routine production reports are the primary output
 Exception reports are available
Decision Support for Senior Management: Balanced
Scorecard and Enterprise Performance Management
Methods

 Executive support systems (ESS)

 Balanced scorecard method
 Business performance management (BPM)
 Executive support systems (ESS)

 Executive support systems (ESS) are used primarily by senior

management whose decisions are usually never structured
and could be described as “educated guesses.
 Executives rely as much, if not more, on external data than
they do on data internal to their organization.
 Decisions must be made in the context of the world outside
the organization.
 Executive support systems don’t provide executives with
ready-made decisions. They provide the information that
helps them make their decisions. Executives use that
information, along with their experience, knowledge,
education, and understanding of the corporation and the
business environment as a whole, to make their decisions.
Balanced Scorecard
 Balanced scorecard method help executives in
combining their company’s internal financial information
with additional perspectives such as customers, internal
business processes, and learning and growth.
 By focusing on key performance indicators (KPIs) in
each of these areas, executives gain a better
understanding of how the organization is performing
overall.
 After senior management establishes KPIs for each
area, then and only then can the flow of information be
established
Balanced Scorecard Framework
Busienss Process Management

 BPM methods use KPIs to help users measure

the organization’s progress toward the
targets.
 BPM is similar to the balanced scorecard
approach but with a stronger strategic
viewpoint than an operational viewpoint.
About ESS & Balanced Scorecard

 Executive support systems meet the needs of

corporate executives by providing them with vast
amounts of information quickly and in graphic
form to help them make effective decisions.
 ESS must be flexible, easy-to-use, and contain
both internal and external sources of information.
 The balanced scorecard method expands the view
of the organization to include four dimensions:
financial, business process, customer, and
learning and growth.