صفحه 1:
Decision Support and
Business Intelligence
Systems
0د :
Chapter 1:
Decision Support Systems
and Business Intelligence
صفحه 2:
Changing Business Environment
=" Companies are moving
aggressively to computerized
support of their operations =>
Business Intelligence
=" Business Pressures-Responses-
Support Model
= Business pressures result of today's
competitive business climate
= Responses to counter the pressures
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صفحه 3:
Business Pressures-Responses-
Support Model
Business Organization's Decisions and
Environmental Factors Responses. Support —
Globalization
Strategy Analyses
Customer demand Partners’ collaboration Predictions
Government regulations, Reabtime response Decisions
Market conditions Agility
Competition Opportunities| Increased productivity
Etc, New vendors
New business models
Integrated
computerized
decision
‘support
Ete.
Business
ttelligence
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صفحه 4:
The Business Environment
=" The environment in which
organizations operate today is
becoming more and more
complex, creating:
= opportunities, and
= problems
" Example: globalization
=" Business environment factors:
= markets, consumer demands,
O00 Prove 7 ور ی Lod
صفحه 5:
Business Environment Factors
Strong competition
Expanding global markets
Blooming electronic markets on the Internet
Innovative marketing methods
Opportunities for outsourcing with IT support
‘Need for real-time, on-demand transactions
Consumer Desire for customization
demand _ Desire for quality, diversity of products, and speed of
delivery
Customers getting powerful and less loyal =
Technology More innovations, new products, and new services
Increasing obsolescence rate
Increasing information overload
Social networking, Web 2.0 and beyond
Societal Growing government regulations and deregulation
Workforce more diversified, older, and composed of
more women Prime concerns of homeland security and terrorist
و ۹
صفحه 6:
Organizational Responses
" Be Reactive, Anticipative,
Adaptive, and Proactive
=" Managers may take actions, such
as
= Employ strategic planning
= Use new and innovative business models
= Restructure business processes
= Participate in business alliances
= Improve corporate information systems
= Improve 9 se
صفحه 7:
Managers actions, continued
= Improve customer service and relationships
=" Move to electronic commerce (e-commerce)
= Move to make-to-order production and on-
demand manufacturing and services
= Use new IT to improve communication, data
access (discovery of information), and
collaboration
=" Respond quickly to competitors’ actions (e.g.,
in pricing, promotions, new products and
services)
= Automate many tasks of white-collar
employees
صفحه 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
صفحه 9:
Managerial Decision Making
=" Management is a process by which
organizational goals are achieved
by using resources
= Inputs: resources
= Output: attainment of goals
= Measure of success: outputs / inputs
=" Management = Decision Making
=" Decision making: selecting the best
solution from two or more
oe Precare Td
صفحه 10:
Decision Making Process
=" Managers usually make decisions
by following a four-step process
(a.k.a. the scientific approach)
1. Define the problem (or opportunity)
2. Construct a model that describes the
real-world problem
3. Identify possible solutions to the
modeled problem and evaluate the
solutions
4. Compare, اس and لامك 3
صفحه 11:
Decision making is difficult,
because
= Technology, information systems, advanced
search engines, and globalization result in more
and more alternatives from which to choose
= Government 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 future
= Other 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
sd زد انح
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صفحه 12:
Why Use Computerized DSS
=" Computerized DSS can facilitate
decision via:
= Speedy computations
= Improved communication and
collaboration
= Increased productivity of group
members
=" Improved data management
" Overcoming cognitive limits
® Quality support; agility support
9
۳
صفحه 13:
A Decision Support Framework
(by Gory and Scott-Morten,
1971)
‘Type of Control
Managerial Strategic
وت یبا Control Control Planning
Accounts receivable L4] Budget analysis 2 | Financial management L3
Accounts payable Shortterm forecasting | Investment portfolio
Structured Order entry Personnel reports Warehouse location
Make-onbuy Distribution systems
Production scheduling L4} Credit evaluation 5 Building anew plant LS
Inventory contro! Budget preparation Mergers & acquisitions
Plant layout New product planning
Semistructured Project scheduling ‘Compensation planning
Reward system design | Quality assurance
Inventory eategorzation | HR policies
Inventory planning
Buying software 7} Negotiating 8} R&D planning لكا
‘Approving loans Recruiting an executive | New tech, development
Unstructured | Operating ahelp desk | Buying hardware Social responsibilty
Selecting a cover fora | Lobbying planning
magazine
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صفحه 14:
A Decision Support Framework -
cont.
=" Degree of Structuredness (Simon,
1977)
= Decision are classified as
= Highly structured (a.k.a. programmed)
= Semi-structured
= Highly unstructured (i.e., non-
programmed)
= Types of Control (Anthony, 1965)
" Strategic planning (top-level, long-
range)
صفحه 15:
Simon’s Decision-Making Process
Intelligence
Environment scanning)
Problems or
Opportunities
Analyzing solutions
صفحه 16:
Computer Support for Structured
Decisions
= Structured problems: encountered
repeatedly, have a high level of
structure
= It is possible to abstract, analyze,
and classify them into specific
categories
= e.g., make-or-buy decisions, capital
budgeting, resource allocation,
distribution, procurement, and
control نوه معام
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صفحه 17:
Management Science Approach
= Also referred to as Operation
Research
= In solving problems, managers
should follow the five-step MS
approach
1. Define the problem
2 Classy the problem into a standard category
3. Construct a model that describes the real-world
problem
ee identify possible solutions to the modeled —__
صفحه 18:
Automated Decision Making
= A relatively new approach to
supporting decision making
= Applies to highly structures
decisions
= Automated 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
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صفحه 19:
Automated Decision Making
= ADS initially appeared in the airline
industry called revenue (or yield)
management (or revenue
optimization) systems
= dynamically price tickets based on
actual demand
= Today, many service industries use
similar pricing models
= ADS are driven by business rules!
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صفحه 20:
Computer Support for
Unstructured Decisions
= Unstructured problems can be only
partially supported by standard
computerized quantitative methods
=" They often require customized
solutions
=" They benefit from data and
information
= Intuition and judgment may play a
role
صفحه 21:
Computer Support for
Semi-structured Problems
= Solving 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 parts
= With proper data and information, a
range of alternative solutions, along
صفحه 22:
Concept of Decision Support
Systems
Classical Definitions of DSS
= Interactive computer-based systems, which
help decision makers utilize data and models
to solve unstructured problems" — - Gorry and
Scott-Morton, 1971
= Decision 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
۰ Creare Tod — 7
او و
صفحه 23:
DSS as an Umbrella Term
=" The 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.)
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صفحه 24:
DSS as a Specific Application
= In a narrow sense DSS refers to a
process for building customized
applications for unstructured or
semi-structured problems
" Components of the DSS
Architecture
" Data, Model, Knowledge/Intelligence,
User, Interface (API and/or user
interface)
= DSS often i tti
created b
2 lad
صفحه 25:
x High-Level Architecture of a DSS
| سس الم من |
Knowledge
User interface
صفحه 26:
Types of DSS
= Two major types:
= Model-oriented DSS
= Data-oriented DSS
= Evolution of DSS into Business
Intelligence
= Use of DSS moved from specialist to
managers, and then whomever, whenever,
wherever
= Enabling tools like OLAP, data warehousing,
data mining, intelligent systems, delivered
صفحه 27:
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