Chapter 12 Business Intelligence and Decision Support Systems Information Technology for Management Improving Performance in the Digital Economy 7 th edition John Wiley & Sons, Inc. Slides contributed by Dr. Sandra Reid Chair, Graduate School of Business & Professor, Technology Dallas Baptist University Tu rb an an d Vo lo ni no 12-1 Copyright 2010 John Wiley & Sons, Inc.
57
Embed
Chapter 12 Business Intelligence and Decision Support Systems Information Technology for Management Improving Performance in the Digital Economy 7 th edition.
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Copyright 2010 John Wiley & Sons, Inc.
Chapter 12
Business Intelligence andDecision Support Systems
Information Technology for ManagementImproving Performance in the Digital Economy
7th editionJohn Wiley & Sons, Inc.
Slides contributed by Dr. Sandra ReidChair, Graduate School of Business & Professor, Technology
Dallas Baptist University
Turban and
Volonino
12-1
Copyright 2010 John Wiley & Sons, Inc.
Chapter Outline
• 12.1 The Need for Business Intelligence (BI)• 12.2 BI Architecture, Reporting and
Performance Management• 12.3 Data, Text, and Web Mining and BI Search• 12.4 Managers and Decision Making Processes
12-2
Copyright 2010 John Wiley & Sons, Inc.
Chapter Outline (cont’d)
• 12.5 Decision Support Systems• 12.6 Automated Decision Support (ADS)• 12.7 Managerial Issues
12-3
Copyright 2010 John Wiley & Sons, Inc.
Learning Objectives
1. Identify factors influencing adoption of business intelligence (BI) and business performance management (BPM).
2. Describe data mining, predictive analytics, digital dashboards, scorecards, and multidimensional data analysis.
3. Identify key considerations for IT-support of managerial decision-making.
4. Understand managerial decision making processes, the decision process, and types of decisions.
12-4
Copyright 2010 John Wiley & Sons, Inc.
Learning Objectives – cont’d
5. Describe decision support systems (DSSs), benefits, and structure.
6. Recognize the importance of real-time BI and decision support for various levels of information workers.
7. Be familiar with automated decision support, its advantages, and areas of application.
12-5
Copyright 2010 John Wiley & Sons, Inc. 12-6
Figure IT7eU
Copyright 2010 John Wiley & Sons, Inc.
• Problems – declining market.Saturation of existing market.
• Solution – wireless capabilities to provide managers with data that are analyzed immediately to provide actionable feedback to maximize sales.
• Results –gained decisive edge & outsmarted its rivals. Data used as strategic weapon.
• Tools that are interactive, visual, understandable, & work directly on data warehouse of organization.
• Simpler tools used by front line workers for immediate & long-term business benefits.
• Techniques may be too sophisticated or require extensive knowledge & training.
• May require expert statistician to utilize effectively, if at all.
12-36
Copyright 2010 John Wiley & Sons, Inc. 12-37
12.4 Managers and Decision Making Processes
Copyright 2010 John Wiley & Sons, Inc.
Figure 12.8
12-38
Manager’s decision role.
Copyright 2010 John Wiley & Sons, Inc.
Managers Need IT Support from DSS Tools
• Scenarios, alternatives & risks are many.• Time is always critical consideration & stress
level is high.• Requires sophisticated analysis.• Geographically dispersed decision makers with
collaboration required.• Often requires reliable forecasting.
12-39
Copyright 2010 John Wiley & Sons, Inc.
Automating Manager’s Job
• Routine decisions by mid-level managers (frontline employees) may be automated fairly easily & frequently.
• Automation of routine decisions leaves more time for supervising, training & motivating nonmanagers.
• Top level managerial decision making is seldom routine & very difficult to automate.
12-40
Copyright 2010 John Wiley & Sons, Inc.
IT Available to Support Managers (MSS)
• DSS - indirect support – discovery, communication & collaboration with web facilitation.
• DSS – provide support primarily to analytical, quantitative types of decisions.
• ESS – early BI – supports informational roles of executives.
• GDSS – supports managers & staff working in groups, remotely or closely.
• Common devices – PDAs, Blackberrys, iPhones.
12-41
Copyright 2010 John Wiley & Sons, Inc.
Figure 12.9
12-42
IT support for decision making.
Copyright 2010 John Wiley & Sons, Inc.
Figure 12.10
12-43
Phases in the decision-making process.
Copyright 2010 John Wiley & Sons, Inc.
Decision Modeling & Models
• Decision model – simplified representation, or abstraction of reality.
• Simplicity is key.• Based upon set of assumptions.• Requires monitoring & adjustment periodically
as assumptions change.• Modeling – virtual experiments reduce cost,
compress time, manipulate variables, reduces risk.
12-44
Copyright 2010 John Wiley & Sons, Inc.
Framework for Computerized Decision Analysis
• Structured – routine & repetitive problems.• Unstructured – lots of uncertainty, no
definitive or clear-cut solutions.• Semistructured – between the extremes.
Most true DSS are focused here.
12-45
Copyright 2010 John Wiley & Sons, Inc. 12-46
12.5 Decision Support Systems
Copyright 2010 John Wiley & Sons, Inc.
DSS & Managers
• Need new & accurate information.• Time is critical.• Complex organization for tracking.• Unstable environment.• Increasing competition.• Existing systems could not support operational
requirements.
12-47
Copyright 2010 John Wiley & Sons, Inc.
Table 12.6
12-48
Copyright 2010 John Wiley & Sons, Inc.
Characteristics & Capabilities - DSS
• Sensitivity analysis for “what if” & goal-seeking strategy setting. Increases system flexibility & usefulness.
• Basic components – database, model base, user interface, users & knowledge base.
12-49
Copyright 2010 John Wiley & Sons, Inc.
Figure 12.11
12-50
Conceptual model of DSS and its components.
Copyright 2010 John Wiley & Sons, Inc. 12-51
12.6 Automated Decision Support (ADS)
Copyright 2010 John Wiley & Sons, Inc.
ADS
• Rule-based systems with automatic solutions to repetitive managerial problems.
• Closely related to business analytics.• Automating the decision-making process is
usually achieved by capturing manager’s expertise.
• Rules may be part of expert systems or other intelligent systems.
12-52
Copyright 2010 John Wiley & Sons, Inc.
Characteristics & Benefits of ADS
• Rapidly builds business rules to automate or guide decision makers, & deploys them into almost any operating environment.
• Injects predictive analytics into rule-based applications, increasing their power & value.
• Combines business rules, predictive models & optimization strategies flexibly into enterprise applications.
12-53
Copyright 2010 John Wiley & Sons, Inc.
ADS Applications - Examples
12-54
Customizing products & services for customers
Revenue yield management
Uses filtering for handling & prioritizing claims effectively
• Failure to recognize as enterprise-wide business initiatives.
• Lack of sponsorship.• Lack of cooperation.• Lack of qualified & available staff.• No appreciation of negative impact on
business profitability.• Too much reliance on vendors.
12-56
Copyright 2010 John Wiley & Sons, Inc.
Copyright 2010 John Wiley & Sons, Inc.
All rights reserved. Reproduction or translation of this work beyond that permitted in section 117 of the 1976 United States Copyright Act without express permission of the copyright owner is unlawful. Request for further information should be addressed to the Permission Department, John Wiley & Sons, Inc. The purchaser may make back-up copies for his/her own use only and not for distribution or resale. The Publisher assumes no responsibility for errors, omissions, or damages caused by the use of these programs or from the use of the Information herein.