Chapter 9 : Enabling the Organization Decision Making

Decision-enabling, problem-solving, and opportunity-seizing systems



The reasons for the growth of decision-making information systems :

1)People need to analyze large amounts of information
2)People must make decisions quickly
3)People must apply sophisticated analysis techniques, such as modeling and forecasting, to make good decisions
4)People must protect the corporate asset of organizational information

DECISION MAKING

Model – a simplified representation or abstraction of reality
IT systems in an enterprise



Transaction Processing Systems

Moving up through the organizational pyramid users move from requiring transactional information to analytical information



1) Transaction processing system : the basic business system that serves the operational level (analysts) in an organization

2) Online transaction processing (OLTP): the capturing of transaction and event information using technology to (1) process the information according to defined business rules, (2) store the information, (3) update existing information to reflect the new information

3) Online analytical processing (OLAP : The manipulation of information to create business intelligence in support of strategic decision making

Example of TPS
Types of TPS are used at your college:

Payroll system (Tracking hourly employees)
Accounts Payable system
Accounts Receivable system
Course registration system
Human resources systems (tracking vacation, sick days)

Decision Support Systems :

Decision support system (DSS) – models information to support managers and business professionals during the decision-making process

Three quantitative models used by DSSs include:
Sensitivity analysis – the study of the impact that changes in one (or more) parts of the model have on other parts of the model
What-if analysis – checks the impact of a change in an assumption on the proposed solution
Goal-seeking analysis – finds the inputs necessary to achieve a goal such as a desired level of output

What-if analysis


Goal-seeking analysis


Decision Support Systems

Interaction between a TPS and a DSS


Executive Information Systems:

Executive information system (EIS) – a specialized DSS that supports senior level executives within the organization

Most EISs offering the following capabilities:
Consolidation – involves the aggregation of information and features simple roll-ups to complex groupings of interrelated information
Drill-down – enables users to get details, and details of details, of information
Slice-and-dice – looks at information from different perspectives

Interaction between a TPS and an EIS


Digital dashboard – integrates information from multiple components and presents it in a unified display


Artificial Intelligence (AI):

Intelligent system :various commercial applications of artificial intelligence
Artificial intelligence (AI): simulates human intelligence such as the ability to reason and learn

Four most common categories of AI :



1)Expert system – computerized advisory programs that imitate the reasoning processes of experts in solving difficult problems

2)Neural Network – attempts to emulate the way the human brain works

3)Fuzzy logic – a mathematical method of handling imprecise or subjective information

4)Genetic algorithm – an artificial intelligent system that mimics the evolutionary, survival-of-the-fittest process to generate increasingly better solutions to a problem

5)Intelligent agent – special-purposed knowledge-based information system that accomplishes specific tasks on behalf of its users

6)Multi-agent systems

7)Agent-based modeling

DATA MINING

Data-mining software includes many forms of AI such as neural networks and expert systems


Common forms of data-mining analysis capabilities include:
-Cluster analysis
-Association detection
-Statistical analysis

Cluster Analysis


Association Detection


Statistical Analysis