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Decision Support and Business Intelligence Systems(Chapter 1)

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Decision Support and Business Intelligence Systems(Chapter 1)

اسلاید 1: Decision Support and Business Intelligence SystemsChapter 1:Decision Support Systems and Business Intelligence

اسلاید 2: Changing Business EnvironmentCompanies are moving aggressively to computerized support of their operations => Business IntelligenceBusiness Pressures–Responses–Support ModelBusiness pressures result of todays competitive business climateResponses to counter the pressures Support to better facilitate the process

اسلاید 3: Business Pressures–Responses–Support Model

اسلاید 4: The Business Environment The environment in which organizations operate today is becoming more and more complex, creating: opportunities, andproblemsExample: globalizationBusiness environment factors: markets, consumer demands, technology, and societal…

اسلاید 5: Business Environment FactorsFACTORDESCRIPTIONMarketsStrong competitionExpanding global marketsBlooming electronic markets on the InternetInnovative marketing methodsOpportunities for outsourcing with IT support Need for real-time, on-demand transactionsConsumer Desire for customization demandDesire for quality, diversity of products, and speed of delivery Customers getting powerful and less loyal TechnologyMore innovations, new products, and new servicesIncreasing obsolescence rateIncreasing information overload Social networking, Web 2.0 and beyondSocietalGrowing government regulations and deregulationWorkforce more diversified, older, and composed of more womenPrime concerns of homeland security and terrorist attacks

اسلاید 6: Organizational ResponsesBe Reactive, Anticipative, Adaptive, and ProactiveManagers may take actions, such asEmploy strategic planningUse new and innovative business modelsRestructure business processesParticipate in business alliancesImprove corporate information systemsImprove partnership relationshipsEncourage innovation and creativity …cont…>

اسلاید 7: Managers actions, continuedImprove customer service and relationshipsMove to electronic commerce (e-commerce)Move to make-to-order production and on-demand manufacturing and servicesUse new IT to improve communication, data access (discovery of information), and collaborationRespond quickly to competitors actions (e.g., in pricing, promotions, new products and services)Automate many tasks of white-collar employeesAutomate certain decision processesImprove decision making by employing analytics

اسلاید 8: Closing the Strategy Gap One of the major objectives of computerized decision support is to facilitate closing the gap between the current performance of an organization and its desired performance, as expressed in its mission, objectives, and goals, and the strategy to achieve them

اسلاید 9: Managerial Decision MakingManagement is a process by which organizational goals are achieved by using resourcesInputs: resourcesOutput: attainment of goals Measure of success: outputs / inputsManagement  Decision MakingDecision making: selecting the best solution from two or more alternatives

اسلاید 10: Decision Making ProcessManagers usually make decisions by following a four-step process (a.k.a. the scientific approach) Define the problem (or opportunity) Construct a model that describes the real-world problemIdentify possible solutions to the modeled problem and evaluate the solutionsCompare, choose, and recommend a potential solution to the problem

اسلاید 11: Decision making is difficult, becauseTechnology, information systems, advanced search engines, and globalization result in more and more alternatives from which to chooseGovernment regulations and the need for compliance, political instability and terrorism, competition, and changing consumer demands produce more uncertainty, making it more difficult to predict consequences and the futureOther factors are the need to make rapid decisions, the frequent and unpredictable changes that make trial-and-error learning difficult, and the potential costs of making mistakes

اسلاید 12: Why Use Computerized DSSComputerized DSS can facilitate decision via:Speedy computationsImproved communication and collaborationIncreased productivity of group membersImproved data managementOvercoming cognitive limits Quality support; agility supportUsing Web; anywhere, anytime support

اسلاید 13: A Decision Support Framework (by Gory and Scott-Morten, 1971)

اسلاید 14: A Decision Support Framework – cont.Degree of Structuredness (Simon, 1977)Decision are classified as Highly structured (a.k.a. programmed)Semi-structuredHighly unstructured (i.e., non-programmed) Types of Control (Anthony, 1965)Strategic planning (top-level, long-range)Management control (tactical planning)Operational control

اسلاید 15: Simon’s Decision-Making Process

اسلاید 16: Computer Support for Structured DecisionsStructured problems: encountered repeatedly, have a high level of structureIt is possible to abstract, analyze, and classify them into specific categoriese.g., make-or-buy decisions, capital budgeting, resource allocation, distribution, procurement, and inventory control For each category a solution approach is developed => Management Science

اسلاید 17: Management Science ApproachAlso referred to as Operation ResearchIn solving problems, managers should follow the five-step MS approachDefine the problem Classify the problem into a standard category (*)Construct a model that describes the real-world problemIdentify possible solutions to the modeled problem and evaluate the solutionsCompare, choose, and recommend a potential solution to the problem

اسلاید 18: Automated Decision Making A relatively new approach to supporting decision makingApplies to highly structures decisionsAutomated decision systems (ADS) (or decision automation systems) An ADS is a rule-based system that provides a solution to a repetitive managerial problem in a specific area e.g., simple-loan approval system

اسلاید 19: Automated Decision Making ADS initially appeared in the airline industry called revenue (or yield) management (or revenue optimization) systemsdynamically price tickets based on actual demandToday, many service industries use similar pricing modelsADS are driven by business rules!

اسلاید 20: Computer Support for Unstructured DecisionsUnstructured problems can be only partially supported by standard computerized quantitative methodsThey often require customized solutionsThey benefit from data and informationIntuition and judgment may play a roleComputerized communication and collaboration technologies along with knowledge management is often used

اسلاید 21: Computer Support for Semi-structured ProblemsSolving semi-structured problems may involve a combination of standard solution procedures and human judgment MS handles the structured parts while DSS deals with the unstructured partsWith proper data and information, a range of alternative solutions, along with their potential impacts

اسلاید 22: Concept of Decision Support SystemsClassical Definitions of DSSInteractive computer-based systems, which help decision makers utilize data and models to solve unstructured problems - Gorry and Scott-Morton, 1971Decision support systems couple the intellectual resources of individuals with the capabilities of the computer to improve the quality of decisions. It is a computer-based support system for management decision makers who deal with semistructured problems - Keen and Scott-Morton, 1978

اسلاید 23: DSS as an Umbrella TermThe term DSS can be used as an umbrella term to describe any computerized system that supports decision making in an organization E.g., an organization wide knowledge management system; a decision support system specific to an organizational function (marketing, finance, accounting, manufacturing, planning, SCM, etc.)

اسلاید 24: DSS as a Specific Application In a narrow sense DSS refers to a process for building customized applications for unstructured or semi-structured problemsComponents of the DSS ArchitectureData, Model, Knowledge/Intelligence, User, Interface (API and/or user interface)DSS often is created by putting together loosely coupled instances of these components

اسلاید 25: High-Level Architecture of a DSS

اسلاید 26: Types of DSS Two major types:Model-oriented DSSData-oriented DSSEvolution of DSS into Business IntelligenceUse of DSS moved from specialist to managers, and then whomever, whenever, whereverEnabling tools like OLAP, data warehousing, data mining, intelligent systems, delivered via Web technology have collectively led to the term “business intelligence” (BI) and “business analytics”

اسلاید 27: All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall

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