Transcript Decision Support Systems

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Decision Support
Systems
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Learning Objectives
• Identify the changes taking place in
the form and use of decision support
in e-business enterprises.
• Identify the role and reporting
alternatives of management
information systems.
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8 Learning Objectives (continued)
• Describe how online analytical
processing can meet key
information needs of managers.
• Explain the decision support system
concept and how it differs from
traditional management information
systems.
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8 Learning Objectives (continued)
• Explain how the following
information systems can support the
information needs of executives,
managers, and business
professionals:
– Executive information systems
– Enterprise information portals
– Enterprise knowledge portals
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8 Learning Objectives (continued)
• Identify how neural networks, fuzzy
logic, genetic algorithms, virtual
reality, and intelligent agents can be
used in business.
• How can expert systems be used in
business decision-making situations?
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Section I
• Decision Support in Business
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8 Business and Decision Support
• To succeed, companies need
information systems that can
support the diverse information and
decision-making needs of their
managers and business
professionals.
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Business and Decision Support (continued)
• Information, Decisions, &
Management
– The type of information required by
decision makers is directly related to
the level of management and the
amount of structure in the decision
situations.
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Business and Decision Support (continued)
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Business and Decision Support (continued)
• Information Quality
– Timeliness
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Provided WHEN it is needed
Up-to-date when it is provided
Provided as often as needed
Provided about past, present, and future
time periods as necessary
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Business and Decision Support (continued)
• Information Quality (continued)
– Content
• Free from errors
• Should be related to the information needs of a
specific recipient for a specific situation
• Provide all the information that is needed
• Only the information that is needed should be
provided
• Can have a broad or narrow scope, or an internal
or external focus
• Can reveal performance
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Business and Decision Support (continued)
• Information Quality (continued)
– Form
• Provided in a form that is easy to
understand
• Can be provided in detail or summary form
• Can be arranged in a predetermined
sequence
• Can be presented in narrative, numeric,
graphic, or other forms
• Can be provided in hard copy, video, or
other media.
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Business and Decision Support (continued)
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Business and Decision Support (continued)
• Decision Structure
– Structured decisions
• Involve situations where the procedures to
be followed can be specified in advance
– Unstructured decisions
• Involve situations where it is not possible
to specify most of the decision procedures
in advance
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Business and Decision Support (continued)
• Decision structure (continued)
– Semistructured decisions
• Some decision procedures can be
specified in advance, but not enough to
lead to a definite recommended decision
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Business and Decision Support (continued)
– Amount of structure is typically tied to
management level
• Operational – more structured
• Tactical – more semistructured
• Strategic – more unstructured
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Decision Support Trends
• The growth of corporate intranets,
extranets and the Web has
accelerated the development and
use of “executive class” information
delivery & decision support
software tools to virtually every
level of the organization.
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8 Management Information Systems
• The original type of information system
• Produces many of the products that
support day-to-day decision-making
• These information products typically take
the following forms:
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Periodic scheduled reports
Exception reports
Demand reports and responses
Push reports
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Management Information Systems (continued)
• Management reporting alternatives
– Periodic scheduled reports
• Prespecified format
• Provided on a scheduled basis
– Exception reports
• Produced only when exceptional
conditions occur
• Reduces information overload
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Management Information Systems (continued)
• Management reporting alternatives
(continued)
– Demand reports and responses
• Available when demanded.
• Ad hoc
– Push reports
• Information is sent to a networked PC
over the corporate intranet.
• Not specifically requested by the recipient
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Online Analytical Processing
• Enables managers and analysts to
interactively examine & manipulate
large amounts of detailed and
consolidated data from many
perspectives
– Analyze complex relationships to
discover patterns, trends, and
exception conditions
– Real-time
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Online Analytical Processing (continued)
• Involves..
– Consolidation
• The aggregation of data.
• From simple roll-ups to complex
groupings of interrelated data
– Drill-Down
• Display detail data that comprise
consolidated data
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Online Analytical Processing (continued)
– Slicing and Dicing
• The ability to look at the database from
different viewpoints.
• When performed along a time axis, helps
analyze trends and find patterns
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Decision Support Systems
• Computer-based information systems
that provide interactive information
support during the decision-making
process
• DSS’s use
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Analytical models
Specialized databases
The decision maker’s insights & judgments
An interactive, computer-based modeling
process to support making semistructured
and unstructured business decisions
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Decision Support Systems (continued)
• Designed to be ad hoc, quick-response
systems that are initiated and controlled
by the decision maker
• DSS Models and Software
– Rely on model bases as well as databases
– Might include models and analytical
techniques used to express complex
relationships
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Decision Support Systems (continued)
• DSS models and software
(continued)
– Can combine model components to
create integrated models in support of
specific types of business decisions
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Decision Support Systems (continued)
• Geographic Information & Data
Visualization Systems
– Special categories of DSS that
integrate computer graphics with other
DSS features
– GIS
• A DSS that uses geographic databases to
construct and display maps and other
graphics displays
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Decision Support Systems (continued)
• Geographic information and data
visualization systems (continued)
– Data visualization systems
• Represent complex data using
interactive three-dimensional graphic
forms
• Helps discover patterns, links, and
anomalies
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8 Using Decision Support Systems
• An interactive modeling process
• Four types of analytical modeling
– What-if analysis
– Sensitivity analysis
– Goal-seeking analysis
– Optimization analysis
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Using Decision Support Systems (continued)
• What-If Analysis
– End user makes changes to variables,
or relationships among variables, and
observes the resulting changes in the
values of other variables
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Using Decision Support Systems (continued)
• Sensitivity Analysis
– A special case of what-if analysis
– The value of only one variable is
changed repeatedly, and the resulting
changes on other variables are
observed
– Typically used when there is
uncertainty about the assumptions
made in estimating the value of certain
key variables
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Using Decision Support Systems (continued)
• Goal-Seeking Analysis
– Instead of observing how changes in a
variable affect other variables, goalseeking sets a target value (a goal) for
a variable, then repeatedly changes
other variables until the target value is
achieved
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Using Decision Support Systems (continued)
• Optimization Analysis
– A more complex extension of goalseeking
– The goal is to find the optimum value
for one or more target variables, given
certain constraints
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Using Decision Support Systems (continued)
• Data Mining for Decision Support
– Software analyzes vast amounts of
data
– Attempts to discover patterns, trends, &
correlations
– May perform regression, decision tree,
neural network, cluster detection, or
market basket analysis
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Executive Information Systems
• EIS’s combine many of the features
of MIS and DSS
• Originally intended to provide top
executives with immediate, easy
access to information about the
firm’s “critical success factors”
• Alternative names
– Enterprise information systems
– Executive support systems
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Executive Information Systems (continued)
• Features of an EIS
– Information presented in forms tailored
to the preferences of the users
– Most stress use of graphical user
interface and graphics displays
– May also include exception reporting
and trend analysis
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Enterprise Portals and Decision Support
• A Web-based interface and
integration of intranet and other
technologies that gives all intranet
users and selected extranet users
access to a variety of internal &
external business applications and
services
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Enterprise Portals and Decision Support
(continued)
• Business benefits
– More specific and selective information
– Easy access to key corporate intranet
website resources
– Industry and business news
– Access to company data for
stakeholders
– Less time spent on unproductive
surfing
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Knowledge Management Systems
• IT that helps gather, organize, and share
business knowledge within an
organization
• Hypermedia databases that store and
disseminate business knowledge. May
also be called knowledge bases
• Best practices, policies, business
solutions
• Entered through the enterprise
knowledge portal
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Section II
• Artificial Intelligence Technologies in
Business
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Business and AI
• “Designed to leverage the
capabilities of humans rather than
replace them,…AI technology
enables an extraordinary array of
applications that forge new
connections among people,
computers, knowledge, and the
physical world.”
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Artificial Intelligence
• A field of science and technology based
on disciplines such as computer science,
biology, psychology, linguistics,
mathematics, & engineering
• Goal is to develop computers that can
think, see, hear, walk, talk, and feel
• Major thrust – development of computer
functions normally associated with
human intelligence – reasoning, learning,
problem solving
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8 Artificial Intelligence (continued)
• Domains of AI
– Three major areas
• Cognitive science
• Robotics
• Natural interfaces
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8 Artificial Intelligence (continued)
• Cognitive science
– Focuses on researching how the
human brain works & how humans
think and learn
– Applications
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Expert systems
Adaptive learning systems
Fuzzy logic systems
Neural networks
Intelligent agents
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8 Artificial Intelligence (continued)
• Robotics
– Produces robot machines with computer
intelligence and computer controlled,
humanlike physical capabilities
• Natural interfaces
– Natural language and speech recognition
– Talking to a computer and having it
understand
– Virtual reality
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Neural Networks
• Computing systems modeled after
the brain’s mesh like network of
interconnected processing
elements, called neurons
• Goal – the neural network learns
from data it processes
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Fuzzy Logic Systems
• A method of reasoning that resembles
human reasoning
• Allows for approximate values and
inferences
• Allows for incomplete or ambiguous data
• Allows “fuzzy” systems to process
incomplete data and provide approximate,
but acceptable, solutions to problems
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Genetic Algorithms
• Uses Darwinian, randomizing, &
other mathematical functions to
simulate an evolutionary process
that can yield increasingly better
solutions
• Especially useful for situations in
which thousands of solutions are
possible & must be evaluated
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Virtual Reality
• Computer-simulated reality
• Relies on multi-sensory input/output
devices
• Allows interaction with computersimulated objects, entities, and
environments in three dimensions
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Intelligent Agents
• A “software surrogate” for an end
user or a process that fulfills a
stated need or activity
• Uses built-in and learned
knowledge base about a person or
process to make decisions and
accomplish tasks
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Expert Systems
• A knowledge-based information system
that uses its knowledge about a specific,
complex application area to act as an
expert consultant
• Provides answers to questions in a very
specific problem area
• Must be able to explain reasoning
process and conclusions to the user
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Expert Systems (continued)
• Components
– Knowledge base
– Software resources
• Knowledge base
– Contains
» Facts about a specific subject area
» Heuristics that express the reasoning
procedures of an expert on the subject
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Expert Systems (continued)
• Software Resources
– Contains an inference engine and other
programs for refining knowledge and
communicating
» Inference engine processes the
knowledge, and makes associations and
inferences
» User interface programs, including an
explanation program, allows
communication with user
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Developing Expert Systems
• Begin with an expert system shell
• Add the knowledge base
• Built by a “knowledge engineer”
– Works with experts to capture their
knowledge
– Works with domain experts to build
the expert system
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The Value of Expert Systems
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The Value of Expert Systems (continued)
• Benefits
– Can outperform a single human expert in
many problem situations
– Helps preserve and reproduce knowledge of
experts
• Limitations
– Limited focus, inability to learn, maintenance
problems, developmental costs
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Discussion Questions
• Is the form and use of information
and decision support in e-business
changing and expanding?
• Has the growth of self-directed
teams to manage work in
organizations changed the need for
strategic, tactical, and operational
decision making in business?
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8 Discussion Questions (continued)
• What is the difference between the ability
of a manager to retrieve information
instantly on demand using an MIS and
the capabilities provided by a DSS?
• In what ways does using an electronic
spreadsheet package provide you with
the capabilities of a decision support
system?
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8 Discussion Questions (continued)
• Are enterprise information portals
making executive information
systems unnecessary?
• Can computers think? Will they
EVER be able to?
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8 Discussion Questions (continued)
• What are some of the most important
applications of AI in business?
• What are some of the limitations or
dangers you see in the use of AI
technologies such as expert systems,
virtual reality, and intelligent agents?
What could be done to minimize such
effects?
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References
• James A. O'Brien; George M. Marakas.
Management Information Systems:
Managing Information Technology in the
Business Enterprise 6th Ed., Boston:
McGraw-Hill/ Irwin,2004
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