McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved Business Driven Information Systems 2e CHAPTER 2 STRATEGIC DECISION MAKING CHAPTER 2 STRATEGIC DECISION MAKING

McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved SECTION 2.1 DECISION-MAKING SYSTEMS

2-3 DECISION MAKING People must: –Analyze large amounts of information –Make decisions quickly –Apply sophisticated analysis techniques Systems support these activities

2-4 DECISION MAKING IT systems in an enterprise

2-5 TRANSACTION PROCESSING SYSTEMS

2-6 TRANSACTION PROCESSING SYSTEMS Transaction processing system (TPS) - basic business system that serves the operational level Online transaction processing (OLTP) – capturing of transaction and event information using technology Online analytical processing (OLAP) – manipulation of information to create business intelligence in support of strategic decision making

2-7 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: 1.Sensitivity analysis 2.What-if analysis 3.Goal-seeking analysis

2-8 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 –Drill-down –Slice-and-dice

2-9 EXECUTIVE INFORMATION SYSTEMS

2-10 Digital Dashboards

2-11 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

2-12 ARTIFICIAL INTELLIGENCE (AI) Four most common categories of AI include: 1.Expert system 2.Neural Network –Fuzzy logic 3.Genetic algorithm 4.Intelligent agent

2-13 Data Mining Data-mining systems sift instantly through information to uncover patterns and relationships Data-mining systems include many forms of AI such as neural networks and expert systems

McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved SECTION 2.2 BUSINESS PROCESSES

2-15 UNDERSTANDING THE IMPORTANCE OF BUSINESS PROCESS Business process – a standardized set of activities that accomplish a specific task –Customer facing process –Business facing process

2-16 BUSINESS PROCESS IMPROVEMENT Business process improvement – attempts to understand and measure the current process and make performance improvements accordingly

2-17 BUSINESS PROCESS REENGINEERING Business process reengineering (BPR) - analysis and redesign of workflow within and between enterprises

2-18 Finding Opportunity Using BPR

2-19 BUSINESS PROCESS MODELING Business process modeling (or mapping) - creating a detailed flow chart or process map of a work process showing its inputs, tasks, and activities, in a structured sequence Business process model - a graphic description of a process, showing the sequence of process tasks, which is developed for a specific –As-Is process model –To-Be process model

2-20 BUSINESS PROCESS MODELING

2-21 BUSINESS PROCESS MANAGEMENT Business process management (BPM) - integrates all of an organization’s business process to make individual processes more efficient

2-22 BPM Examples

2-23 BPM Examples