2. 1 Managerial Support Systems MIS 503 Management Information Systems MBA Program

3. 2 Information Requirements by Management Level Strategic Management Tactical Management Operational Management Decisions Information

4. 3 Structured vs. Semi-Structured For each decision you make, the decision will fall into one of the following categories: –Structured Decisions –Unstructured –Semi-Structured

5. 4 Structured Decisions Often called “programmed decisions” because they are routine and there are usually specific policies, procedures, or actions that can be identified to help make the decision –“This is how we usually solve this type of problem”

6. 5 Unstructured Decisions Decision scenarios that often involve new or unique problems and the individual has little or no programmatic or routine procedure for addressing the problem or making a decision

7. 6 Semi-structured Decisions Decision scenarios that have some structured components and some unstructured components.

8. 7 The Role of the Decision Maker Decision makers can be –Individuals –Teams –Groups –Organizations All of these types of decision makers will differ in their knowledge and experience; therefore, there will be differences in how they will react to a given problem scenario

9. 8 The Decision Making Process Regardless of the type of decision maker, all decisions involve the following steps –Intelligence –Design –Choice –Implementation

10. 9 Strategies for Making Decisions Optimization Satisficing Elimination by Aspects Incrementalism Mixed Scanning Analytic Hierarchy Process

11. 10 Types of Models Deterministic: linear programming and production planning Stochastic: queuing theory and regression analysis Simulation: transportation analysis and production modeling Domain-specific: meteorological models, geologic models, economic models

12. 11 Conceptual Models Formal approaches are not always feasible Most all problem is always completely new Decision makers can therefore recall and combine a variety of past experiences to create a model of the current situation The Garbage can approach to decision making

13. 12 How can IT be used to support decision makers? By supporting various individual and team activities and roles: –Communication and team interaction –The assimilation and filtering of data –Assist with problem recognition –Assist with problem solving –Putting together the results into a cohesive package

14. 13 Types of Managerial Support Systems and Applications Decision Support Systems –Geographic Information Systems (GIS) –Data Mining –Group Support Systems Business Intelligence Systems Knowledge Management Systems Artificial Intelligence Expert Systems Neural Networks Virtual Reality

15. D ECISION S UPPORT S YSTEMS Designed to assist decision makers with unstructured problems Usually interactive Incorporates data and models Data often comes from transaction processing systems or data warehouse

16. 15 D ECISION S UPPORT S YSTEMS Three major components

17. 16 Decision Support Systems (DSS) DSS can be classified as –data-oriented provide tools for the manipulation and analysis of data –model-based generally have some kind of mathematical model of the decision being supported

18. 17 So, how do decision support systems benefit decision makers? Supplements the decision maker Allows improved intelligence, decision, and choice activities Facilitates problem solving Provides assistance with non-structures decisions Assists with knowledge management

19. 18 Spatial DSS: A Geographic Information System A geographic information system (GIS) is a computer-based information system that provides tools to collect, integrate, manage, analyze, model, and display data that is referenced to an accurate cartographic representation of objects in space. (Mennecke, Dangermond, Santoro, Darling, & Crossland, 1995).

20. 19 Location Based Services Location-based services incorporate information about the user's location into the provision of products or services. These include… –Locator services (e.g., where’s the closest ATM?) –Navigation systems (e.g., in the car or on your PC) –M-commerce applications (e.g., proximity alerts, closest service, mobile advertizing)

21. 20 GIS Examples Online: –www.MapQuest.comwww.MapQuest.com –Maps.google.comMaps.google.com Desktop –ArcGIS by ESRIESRI –MS MapPoint 2004MS MapPoint 2004

22. 21 GISs – systems based on manipulation of relationships in space that use geographic data G EOGRAPHIC I NFORMATION S YSTEMS –Early GIS users: Natural resource management Public administration NASA and the military Urban planning Forestry Map makers

23. 22 Business Adopts Geographic Technologies G EOGRAPHIC I NFORMATION S YSTEMS –Business uses: Determining site locations Market analysis and planning Logistics and routing Environmental engineering Geographic pattern analysis

24. 23 (Reprinted courtesy of Environmental Systems Research Institute, Inc. Copyright © 2003 Environmental Systems Research Institute, Inc. All rights reserved.)

25. 24 Approaches to representing spatial data: –Raster-based – rely on dividing space into small, uniform cells (rasters) in a grid –Vector-based GISs – associate features in the landscape with a point, line, or polygon –Geodatabase model – uses object-oriented data concepts What’s Behind Geographic Technologies G EOGRAPHIC I NFORMATION S YSTEMS

26. Coverage model uses different layers to represent similar types of geographic features in the same area

27. 26 Questions geographic analysis can answer: –What is adjacent to this feature? –Which site is the nearest one? –What is contained within this area? –Which features does this element cross? –How many features are within a certain distance of a site? What’s Behind Geographic Technologies G EOGRAPHIC I NFORMATION S YSTEMS

28. 27 D ATA M INING –Data mining software: Oracle 9i Data Mining and Oracle Data Mining Suite SAS Enterprise Miner IBM Intelligent Miner Modeling Angoss Software’s KnowledgeSEEKER, Knowledge Studio, and KnowledgeExcelerator Datamation’s Data Mining and Business Intelligence Product Data Mining – uses different technologies to search for (mine) “nuggets” of information from data stored in a data warehouse

29. 28 –Decision techniques used: Decision trees Linear and logistic regression Clustering for market segmentation Rule induction Nearest neighbor Genetic algorithms D ATA M INING

30. Uses: –Cross-selling –Customer churn –Customer retention –Direct marketing –Fraud detection –Interactive marketing –Market basket analysis –Market segmentation –Payment or default analysis –Trend analysis D ATA M INING

31. 30 Type of DSS to support a group rather than an individual Specialized type of groupware Attempt to make group meetings more productive Now focus on supporting team in all its endeavors, including “different time, different place” mode – virtual teams G ROUP S UPPORT S YSTEMS Middle managers spend 35%, and top managers spend 50-80% of time in meetings!

32. 31 G ROUP S UPPORT S YSTEMS Traditional “same time, same place” meeting layout

33. Executive Information Systems (EIS)/ Business Intelligence Systems –Hands-on tool that focuses, filters, and organizes information so that an executive can make more effective use of it –User base for EISs has expanded to encompass all levels of management Today also called performance management software –Focus on competitive information… today referred to as business intelligence systems Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

34. Executive Information Systems/ Business Intelligence Systems -Delivers online current information about business conditions in aggregate form -Filtered and summarized transaction data -Competitive information, assessments and insights -Easily accessible to senior executives and other managers -Designed to be used without intermediary assistance -Uses state-of-the-art graphics, communications and data storage methods

35. 6-34 Executive Information Systems/ Business Intelligence Systems Executive Dashboard from Qualitech Solutions Oracle Enterprise performance Management Systems SAP Business Objects Strategy Management SAS/EIS Symphony RPM from Symphony Metreo IBM Cognos Business Intelligence MicroStrategy Intelligence Server Oracle Business Intelligence Suite SAP Business Objects BI solutions SAS Business Intelligence Infor PM Commercial EIS software Executive Dashboard SAP Business Objects SAS/EIS Symphony Metreo Infor PM Executive Dashboard SAP Business Objects SAS/EIS Symphony Metreo Infor PM Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

36. 6-35 Executive Information Systems/ Business Intelligence Systems “ Dashboard” layout for data representation: Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

37. 36 Artificial Intelligence Artificial intelligence systems include the people, procedures, hardware, software, data and knowledge to develop computer systems and machines that demonstrate characteristics of intelligence.

38. 37 Intelligent Systems Turing’s test for Artificial Intelligence (AI) –place a computer and a human in two separate rooms –an interviewer in a third room, who cannot see the human or the computer user, asks questions that are passed to the computer and to the human –if the interviewer cannot tell the difference between the answers from the computer and the human, the machine is said to exhibit intelligent behavior

39. 38 AI Versus Traditional Programs AI programs manipulate symbols or rules rather than numbers AI programs are generally non- algorithmic often employing heuristics or rules of thumb Many AI programs are concerned with pattern recognition

40. 39 Six areas: Natural languages Robotics Perceptive systems Genetic programming Expert systems Neural networks AI – the study of how to make computers do things that are currently done better by people ARTIFICIAL INTELLIGENCE

41. Most relevant for managerial support 40 Six areas: Natural languages Robotics Perceptive systems Genetic programming Expert systems Neural networks AI – the study of how to make computers do things that are currently done better by people ARTIFICIAL INTELLIGENCE

42. 41 Expert systems – attempt to capture the expertise of humans in a computer program E XPERT S YSTEMS Knowledge engineer: –A specially trained systems analyst who works closely with one or more experts in the area of study –Tries to learn about how experts make decisions –Loads information (what learned) into module called knowledge base

43. 42 E XPERT S YSTEMS

44. 43 E XPERT S YSTEMS Approaches: –Buy a fully developed system created for a specific application –Develop using a purchased expert system shell (basic framework) and user-friendly special language –Have knowledge engineers custom build using special-purpose language (such as Prolog or Lisp) Obtaining an Expert System

45. 44 Standford University’s MYCIN – to diagnose and prescribe treatment for meningitis and blood diseases General Electric’s CATS-1 to diagnose mechanical problems in diesel locomotives AT&T’s ACE to locate faults in telephone cables Market Surveillance software – to detect insider trading FAST software – for credit analysis, used by banking industry Nestle Food’s developed system to provide employees information on pension fund status E XPERT S YSTEMS Examples of Expert Systems

46. 45 Online Expert Systems What’s wrong with your car? http://www.expertise2go.com/webesie/car/ http://www.expertise2go.com/webesie/car/ Buying the right PDA http://www.expertise2go.com/shop/pda.htm http://www.expertise2go.com/shop/pda.htm Choosing a Desktop PC http://www.expertise2go.com/shop/desktop.htm http://www.expertise2go.com/shop/desktop.htm

47. 46 Neural networks – attempt to tease out meaningful patterns from vast amounts of data Process: 1.Program given set of data 2.Program analyzed data, works out correlations, selects variables to create patterns 3.Pattern used to predict outcomes, then results compared to known results 4.Program changes pattern by adjusting variable weights or variables themselves 5.Repeats process over and over to adjust pattern 6.When no further adjustment possible, ready to be used to make predictions for future cases N EURAL N ETWORKS

48. 47 N EURAL N ETWORKS

49. 48 Neural Networks Two Types: –Biological neural networks –Artificial neural networks The most popular type of artificial NN are used to classify input into different categories A neural network has to be first trained by presenting it with past cases –After training the network can be used for classification

50. 49

51. 50 Intelligent Agents An agent is a piece of software that performs a task for its owner –involves AI combined with networks –applications for intelligent agents have been for consumer tasks like shopping and providing recommendations based on profile matches

52. KNOWLEDGE MANAGEMENT SYSTEMS What is Knowledge management (KM)? –Practices to manage Organizational knowledge –Strategies and processes for identifying, creating, capturing, organizing, transferring, and leveraging knowledge held by individuals and the firm

53. 52 Data is turned into information, but the decision maker also needs Knowledge to make decisions Types of knowledge: –Descriptive Knowledge –Procedural Knowledge –Reasoning Knowledge Forms of Knowledge –Tacit Knowledge –Explicit Knowledge

54. 53

55. 54 Examples of technologies that can support or enhance the transformation of knowledge (IBM Systems Journal) Tacit to TacitTacit to Explicit E-meetingsAnswering questions Synchronous collaboration (chat)Annotation Explicit to TacitExplicit to Explicit VisualizationText search Browsable video/audio of presentations Document categorization

56. 55 Knowledge Management Tools Text and Forms management Database and Reporting management Spreadsheet, Solvers and Charts management Programming management. Rules management

57. 56 V IRTUAL R EALITY Virtual reality – use of a computer-based system to create an environment that seems real to one or more senses of users Non-entertainment uses of VR: - Training - Design - Marketing - Meetings - Social Collaborations

58. 57 TrainingU.S. Army to train tank crews Amoco for training its drivers Duracell for training factory workers on using new equipment DesignDesign of automobiles Walk-throughs of air conditioning/ furnace units MarketingInteractive 3-D images of products (used on the Web) Virtual tours used by real estate companies or resort hotels V IRTUAL R EALITY

59. 58 V IRTUAL R EALITY

60. 5-59 ENTERPRISE RESOURCE PLANNING (ERP) SYSTEMS Enterprise Resource Planning (ERP) Systems Set of integrated business applications (modules) that carry out common business functions -Transaction data accessible to workers in multiple functional units (sales + accounting +…) Process-oriented way of doing business - Not separate systems for separate functions - Support for “Order fulfillment,” not just Sales Usually purchased from a software vendor ERP = “First wave” of enterprise system packages “Later waves” of enterprise system packages -Customer relationship management (CRM) -Supply chain management (SCM) systems

61. 5-60 CUSTOMERSCUSTOMERS ProductionProcurementDistribution Materials Management modules Production/ Operations modules Sales/ Distribution modules Financials/Accounting modules Human Resources modules SUPPLIERSSUPPLIERS 3 Modules for Value-Chain Activities 2 Modules for Enterprise Support Activities By mid-1990s, SAP and other vendors designed “suites” of integrated modules for “back- office” transaction processing that eliminated the need for many custom-developed interfaces

62. Suite from one vendor OR “best of breed” from multiple vendors Some organizations implement Enterprise Support modules only ( Financials, HR) Value-Chain module implementations involve large investment of money and people resources because of impact on business Have become “essential” systems in many industries Source: Gartner Dataquest

63. SAP BUSINESS SUITE Today’s vendors offer modules beyond the “back-office” modules

64. Support for Cross-Functional processes -Modules were designed to support business processes that involved multiple business functions and multiple geographic locations Access to Integrated Data via a unified platform -Data entered into one module could be accessed in real-time by other modules, by employees in dispersed business units, if a single centralized database is implemented. Support for Global Transactions - National currencies are automatically converted to the parent firm’s currency -Employees in different countries can see the same screen in their own languages ERP Business Benefits