Presentation on theme: "Business Driven Information Systems 2e"— Presentation transcript:
1 Business Driven Information Systems 2e CHAPTER 2STRATEGIC DECISION MAKING
2 Chapter Two Overview SECTION 2.1 - DECISION-MAKING SYSTEMS Transaction Processing SystemsDecision Support SystemsExecutive Information SystemsSECTION 2.2 – BUSINESS PROCESSESUnderstanding the Importance of Business ProcessesBusiness Process ImprovementBusiness Process ReengineeringBusiness Process ModelingBusiness Process Management
3 Chapter Two OverviewDecision-enabling, problem-solving, and opportunity-seizing systems
4 DECISION-MAKING SYSTEMS SECTION 2.1DECISION-MAKING SYSTEMS
5 LEARNING OUTCOMESExplain the difference between transactional information and analytical information. Be sure to provide an example of eachDefine TPS, DSS, and EIS and explain how an organization can use these systems to make decisions and gain competitive advantagesDescribe the three quantitative models typically used by decision support systems
6 LEARNING OUTCOMESDescribe the relationship between digital dashboards and executive information systemsIdentify the four types of artificial intelligence systems
7 DECISION MAKINGReasons for the growth of decision-making information systems: People must:Analyze large amounts of informationMake decisions quicklyApply sophisticated analysis techniquesProtect the corporate asset of organizational information
8 DECISION MAKINGModel – a simplified representation or abstraction of realityIT systems inan enterprise
9 TRANSACTION PROCESSING SYSTEMS Moving up users move from requiring transactional information to analytical information
10 TRANSACTION PROCESSING SYSTEMS Transaction processing system (TPS) - basic business system that serves the operational levelOnline transaction processing (OLTP) – capturing of transaction and event information using technologyOnline analytical processing (OLAP) – manipulation of information to create business intelligence in support of strategic decision making
11 DECISION SUPPORT SYSTEMS Decision support system (DSS) – models information to support managers and business professionals during the decision-making processThree quantitative models used by DSSs include:Sensitivity analysisWhat-if analysisGoal-seeking analysis
14 DECISION SUPPORT SYSTEMS Interaction between a TPS and a DSS
15 EXECUTIVE INFORMATION SYSTEMS Executive information system (EIS) – a specialized DSS that supports senior level executives within the organizationMost EISs offering the following capabilities:ConsolidationDrill-downSlice-and-dice
16 EXECUTIVE INFORMATION SYSTEMS Interaction between a TPS and an EIS
17 Digital DashboardsDigital dashboard – integrates information from multiple components
18 ARTIFICIAL INTELLIGENCE (AI) Intelligent system – various commercial applications of artificial intelligenceArtificial intelligence (AI) – simulates human intelligence such as the ability to reason and learn
19 ARTIFICIAL INTELLIGENCE (AI) Four most common categories of AI include:Expert system – computerized advisory programs that imitate the reasoning processes of experts in solving difficult problemsNeural Network – attempts to emulate the way the human brain worksFuzzy logic – a mathematical method of handling imprecise or subjective information
20 Artificial Intelligence (AI) Four most common categories of AI include:Genetic algorithm – an artificial intelligent system that mimics the evolutionary, survival-of-the-fittest process to generate increasingly better solutions to a problemIntelligent agent – special-purposed knowledge-based information system that accomplishes specific tasks on behalf of its users
21 Data MiningData-mining systems sift instantly through information to uncover patterns and relationshipsData-mining systems include many forms of AI such as neural networks and expert systems
22 OPENING CASE QUESTIONS Second Life: Succeeding in Virtual Times How could companies use Second Life for new product or service decision making?How could financial companies use neural networks in Second Life to help their businesses?
23 OPENING CASE QUESTIONS Second Life: Succeeding in Virtual Times How could a company such as Nike use decision support systems on Second Life to help its business?How could an apparel company use Second Life to build a digital dashboard to monitor virtual operations?
25 LEARNING OUTCOMESDescribe business processes and their importance to an organizationDifferentiate between customer facing processes and business facing processesCompare business process improvement and business process reengineering
26 LEARNING OUTCOMESDescribe the importance of business process modeling (or mapping) and business process modelsExplain business process management along with the reason for its importance to an organization
27 UNDERSTANDING THE IMPORTANCE OF BUSINESS PROCESS Businesses gain a competitive edge when they minimize costs and streamline business processesBusiness process – a standardized set of activities that accomplish a specific task, such as processing a customer’s order
28 UNDERSTANDING THE IMPORTANCE OF BUSINESS PROCESS Customer facing process - results in a product or service that is received by an organization’s external customerBusiness facing process - invisible to the external customer but essential to the effective management of the business
29 UNDERSTANDING THE IMPORTANCE OF BUSINESS PROCESS
30 UNDERSTANDING THE IMPORTANCE OF BUSINESS PROCESS
31 UNDERSTANDING THE IMPORTANCE OF BUSINESS PROCESS
32 UNDERSTANDING THE IMPORTANCE OF BUSINESS PROCESS
33 BUSINESS PROCESS IMPROVEMENT Companies are forced to improve their business processes because customers are demanding better products and servicesBusiness process improvement – attempts to understand and measure the current process and make performance improvements accordingly
34 BUSINESS PROCESS IMPROVEMENT Business process improvement model
35 BUSINESS PROCESS REENGINEERING Business process reengineering (BPR) - analysis and redesign of workflow within and between enterprises
36 Finding Opportunity Using BPR A company can improve the way it travels the road by moving from foot to horse and then horse to carBPR looks at taking a different path, such as an airplane which ignore the road completely
37 Finding Opportunity Using BPR Progressive Insurance mobile claims process
38 Finding Opportunity Using BPR Types of change an organization can achieve, along with the magnitudes of change and the potential business benefit
39 Selecting a Process to Reengineer Criteria to determine the importance of the processIs the process broken?Will reengineering of this process succeed?Does it have a high impact on the strategic direction?Does it significantly impact customer satisfaction?Is it antiquated?Does it fall far below best-in-class?Is it crucial for productivity improvement?Will savings from automation be clearly visible?Is the return on investment high?
40 BUSINESS PROCESS MODELING Business process modeling (or mapping) - the activity of creating a detailed flow chart or process map of a work process showing its inputs, tasks, and activities, in a structured sequenceBusiness process model - a graphic description of a process, showing the sequence of process tasks, which is developed for a specificAs-Is process modelTo-Be process model
51 OPENING CASE QUESTIONS Second Life: Succeeding in Virtual Times How could a company use Second life to revamp its customer service process?How could a company use second Life to revamp its order entry process?How could a company use Second Life to reinvent relationships with customers, partners, and employees?
52 CLOSING CASE ONE DARPAHow is the DoD using AI to improve its operations and save lives?Why would the DoD use an event, such as the DARPA Grand Challenge, to further technological innovation?
53 CLOSING CASE ONE DARPADescribe how autonomous vehicles could be used by organizations around the world to improve business efficiency and effectivenessDescribe the potential business impacts of the Ansari X competition
54 CLOSING CASE TWO Revving Up Sales at Harley-Davidson How does Talon help Harley-Davidson employees improve their decision-making capabilities?Identify a few key metrics a Harley-Davidson marketing executive might want to monitor on a digital dashboardHow can Harley-Davidson benefit from using decision support systems in its business
55 CLOSING CASE TWO Revving Up Sales at Harley-Davidson How can Harley-Davidson use business process improvement to increase customer satisfaction?How can Harley-Davidson use business process reengineering to improve its supplier relationships?
56 CLOSING CASE THREE Delta Airlines Plays Catch-Up What business risks would Delta be taking if it decided not to catch up with industry leaders in using IT to gain a competitive advantage?What competitive advantages can an airline gain by using DSS and EIS?What other industries could potentially benefit from the use of yield management systems?
57 CLOSING CASE THREE Delta Airlines Plays Catch-Up How can American and United use customer information to gain a competitive?What types of metrics would Delta executives want to see in a digital dashboard?
58 BUSINESS DRIVEN BEST SELLERS Reengineering the Corporation, by Michael Hammer and James Champy
59 BUSINESS DRIVEN BEST SELLERS The First 90 Days, by Michael Watkins
60 BUSINESS DRIVEN BEST SELLERS Execution, by Larry Bossidy and Ram Charan