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
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