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Chapter 12 Enhancing Decision Making (What are the different types of…
Chapter 12
Enhancing Decision Making
What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?
Business value of improved decision making
Types of decisions
Unstructured
Structured
Semistructured
Key decision-making groups in a firm
Senior managers
Middle managers
Operational managers, rank and file employees
The decision making process
Intelligence
Design
Choice
Implementation
Managers and decision making in the real live
Managerial roles
Classical model
Planning
organizing
coordinating
deciding
controlling
behavioral models
less systematic, more informal, less reflective, more reactive, and less well organized than in classical model
why investments in information technology do not always produce positive results
Organizational inertia and politics
Information quality
Management filters
Mintzberg’s 10 managerial roles
Interpersonal roles
Informational roles
Decisional roles
High-velocity automated decision making
Made possible through computer algorithms
Humans taken out of decision
Require safeguards to ensure proper operation and regulation
How do business intelligence and business analytics support decision making?
What is busness intelligence
Business intelligence
Business analytics
Business intelligence vendors
business intelligence environment
Data from the business environment
Business intelligence infrastructure
Business analytics toolset
Managerial users and methods
Delivery platform—MIS, DSS, ESS
User interface
Business intelligence and analytics capabilities
Business intelligence and analytics capabilities
Business intelligence and analytics capabilities
Main functionalities of BI systems
Production reports
Parameterized reports
Dashboards/scorecards
Ad hoc query/search/report creation
Drill down
Forecasts, scenarios, models
Business intelligence users
80 percent are casual users relying on production reports
Senior executives
Middle managers and analysts
Operational employees
Business Intelligence Capabilities
Production reports
Parametrized reports
Dashboard/ scorecards
Ad hoc queries; drill down; search; OLAP
Forecast: whati if analysis, statistical models
PRedictive analytics
Use variety of data, techniques to predict future trends and behavior patterns
Statistical analysis
Data mining
Historical data
Historical data
Assumptions
Incorporated into numerous BI applications for sales, marketing, finance, fraud detection, health care
Big data analytics
Massive datasets collected from social media
Help create real-time, personalized shopping experiences for major online retailers
Smart cities
Operational intelligence and analytics
Business activity monitoring
Business activity monitoring
Internet of Things
Software for operational intelligence and analytics enable companies to analyze their Big Data
Location analytics
Geographic information systems (GIS)
Ties location-related data to maps
management strategies for developing BI and BA capabilities
One-stop integrated solution
Hardware firms sell software that run optimally on their hardware
Makes firm dependent on single vendor—switching costs
Multiple best-of-breed solution
Greater flexibility and independence
Potential difficulties in integration
Must deal with multiple vendors
How do different decision-making constituencies in an organization use business intelligence? What is the role of information systems in helping people working in a group make decisions more efficiently?
Decision support for operational and middlemanagemetn
Operational and middle managers
Use MIS (running data from TPS)
“Super user” and business analysts
Use DSS
Support for semistructured decisions
Use mathematical or analytical models
Allow varied types of analysis
“What-if” analysis
Sensitivity analysis
Backward sensitivity analysis
Multidimensional analysis / OLAP
Balanced scorecard method
Measures outcomes on four dimensions
Financial
Business process
Customer
Learning and growth
Key performance indicators (KPIs) measure each dimension
Business performance management (BPM)
Data for ESS
Group decision support systems (GDSS)
Interactive system to facilitate solution of unstructured problems by group
Specialized hardware and software; typically used in conference rooms
Enables increasing meeting size and increasing productivity
Promotes collaborative atmosphere, anonymity
Uses structured methods to organize and evaluate ideas