·
Organizational
information
ü Employees must be able to obtain and
analyze to many different levels, formats and granularities of organizational
information to make decision
ü Successfully collecting, compiling, sorting
and analyzing information can provide tremendous insight into how an
organization is performing
·
The
value of timely information
ü Timeliness is an aspect of
information that depends on the situation :
-
Real-time information – immediate up-to-date information
-
Real-time system – provides real-time information in
response to query requests
·
The
value of quality information
ü Business decisions are only as good
as the quality of the information used to make the decisions
ü You never want to find yourself using
technology to help you make a bad decision faster
ü Characteristic of high-quality
information include :
-
Accuracy
-
Completeness
-
Consistency
-
Uniqueness
-
Timeliness
·
Understanding
the cost of poor information
ü The four primary sources of low
quality information include :
I.
Online
customers intentionally enter inaccurate information to protect their privacy
II.
Information
from different systems have different entry standards and formats
III.
Call
center operators enter abbreviated or erroneous by accident or to save time
IV.
Third
party and external information contains inconsistencies, inaccuracies and
errors
ü Potential business effects resulting
from low quality information include :
-
Inability
to accurately track customers
-
Difficulty
identifying valuable customers
-
Inability
to identify selling opportunities
-
Marketing
to nonexistent customers
-
Difficulty
tracking revenue due to inaccurate invoices
-
Inability
to build strong customer relationship
·
Understanding
the benefits of good information
ü High quality information can
significantly improve the chances of making a good decision
ü Good decision can directly impact an
organization’s bottom line
DECISION
MAKING
Reasons for the growth of decision
making information systems
-people need to analyze large amounts of
information
-people must take decision quickly
-people must apply sophisticated analysis
techniques, such as modeling and foresting, to make good decisions
-people must protect the corporate asset of
organizational information
MODEL
A simplified representation or abstraction of
reality
IT SYSTEMS IN AN ENTERPRISE
EXECUTIVES - EXECUTIVE INFORMATION SYSTEM (EIS)
MANAGERS - DECISION SUPPORT SYSTEMS (DSS)
ANALYSIS – TRANSACTION PROCESSING SYSTEMS (TPS)
TRANSACTION
PROCESSING SYSTEMS
-Moving up through the organizational pyramid
users move from requiring transactional information to analytical information
-Transaction
processing system – the basic business system that serves the operational
level (analysts) in an organization
-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
-Online
analytical processing (OLAP) – the manipulation of information to create
business intelligence in support of strategic decision making
DECISION
SUPPORT SYSTEMS
-Decision
support systems (DSS) – models information to support managers and business
professionals during the decision-making process
-Three quantitative models used by DSSs include :
1. Sensitively
analysis – the study of the impact that changes in one (or more) parts of the model have on
other parts of the model
2. What-if
analysis – checks the impact of a change in an assumption on the proposed
solution
3. Goal-seeking
analysis – finds the inputs necessary to achieve a goal such as a desired
level of output
EXECUTIVE
INFORMATION SYSTEMS
-Executive
information system (EIS) – a specialized DSS that supports senior level
executives within the organization
-most EISs offering the following capabilities :
1.consolodation–
involves the aggregation of intelligent system that mimics the evolutionary,
survival-of-the-fittest process to generate increasingly better solutions to a
problem
2.drill-down
– enables, users to get details and details of details, of information
3.slice-and-dice
– looks at information from different perspectives
ARTIFICIAL
INTELLIGENCE
-INTELLIGENT
SYSTEM – various commercial applications of artificial intelligence
-ARTIFICIAL
INTELLIGENCE (AI) – Simulates human intelligence such as the ability to
reason and learn
-advantages: can check info on competitor
-the ultimate goal of AI is the ability to build
a system that can mimic human intelligence
-Four most common categories of AI include :
1. expert
system – computerized advisory programs that imitate the reasoning
processes of expert in solving difficult problems
2. neural
network – attempts to emulate the way the human brain works
-fuzzy logic – a mathematical method of
handling imprecise or subjective information
3. genetic algorithm – an AI system that
mimics the evolutionary, survival-if-the-fittest process to generate increasingly
better solutions to a problem
4. intelligent agent –
special-purposed-knowledge-based information system that accomplishes specific
tasks on behalf of its users
DATA-MINING
-data-mining
software includes many forms of AI such as neural networks and expert system
-common forms
of data-mining analysis capabilities include:
1. cluster
analysis
2.
association detection
3.
statistical analysis
CLUSTER ANALYSIS
-CLUSTER ANALYSIS – To divide
an information set into mutually exclusive groups such that the members of each
group are as possible to one another and the different groups are as far apart
as possible
-CRM systems depend on cluster analysis
to segment customer information and identify behavioral traits
ASSOCIATION DETECTION
-Association detection reveals the
degree to which variables are related and the nature and frequency of these
relationships in the information
-Market basket analysis such items as
Web sites and checkout scanner information to detect customers’ buying behavior
and predict future behavior by identifying affinities among customers’ choices
of products and services
STATISTICAL ANALYSIS performs such
functions as information correlations, distributions, calculations and variance
analysis
- forecast– predictions made on the basis of
time-series information
- time-series information –
time-stamped information collected at a particular frequency