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Supporting Information - Centric decison making (Data Mining (The data…
Supporting Information - Centric decison making
What is decison making?
Decisions are often influenced by power, incentives
Information processing ability can be limited
Cognitive ability is reduced under stress or time
Often decison makers cannot clearly articulate their own objectives or preferences
Decision making is a process that involves a variety of activities, most of which handle information
Most computer systems support decision making by automating decision processes
A wide variety of computer-based tools and approaches can be used to solve problems
Role of IT?
How can IT be used to get the information required to the correct people, decison makers, at the right time, to make better quality decisions
Better formulate the problem, clarify preferences, process complex reasoning and appreciate the impact of those decisions
Technologies-Supported Decison Making
Business intelligence (BI) is a broad set of concepts, methods and technologies to improve context-sensitive business decisions
Sense-making is central to BI
Ability to be aware and assess situations that seem important to the organization
Awareness: inductive process (data-driven)
Assessment: fiitng observed data into a pre determined model
Decision support systems
Computer-based systems that help decison maker confront ill-structed problems through direct interaction with data and analysis models
Architecture for DSS
Dialog-Data Model (DDM)
Ad hoc information requests
Specific data query
2 kinds of DSS
Institutional- generally built by professionals for the organization, for continued support basis
ORED-IDA Foods Case study
Frozen food division of H.J. Heinz
Markteing DSS must support 3 main tasks in decison making process
1) Data retrieval-- What has happened?
2) Marketing analysis (70% of DSS function) -- why did it happen?
3) Modeling-- what will happen if?
Modeling for projection purposes offers greatest potential value of marketing management
Quick hit- developed quickly to help manager make either a one-time decison or a recurring decison
Major Services Company
Employee stock ownership plan (ESOP)
Determine possible impact pf the ESOP on the company and answer questions including---- 1) How many company shares needed in 10-30? 2) Level of growth needed to meet stock requirements?
IS manager wrote a program to perform calculations--- 1) Program produced impact projections of ESOP over 30-year period...... 2) DSS program subsequently expaded to other eomplyee benefit programs
Data Mining
The data componet of a DSS architecture crucial part of the success of the DSS
Many advances in the area of data warehousing and data mining
Data Mining-
sometimes known as data or knowledge discovery is a technique that processes large amounts of sata from different perspectives, with the hope of discovering some business patterns embedded in the data------- Use of computers to uncover unknown correlations
Use of computers to uncover unknown correlations from a large data set, using the following type of relationships and pattern recognition approaches
Classes--- data regrading a predetermined group- retail chain store, sales data according to time and purchase
Clusters---- logical relationships or preferences
Associations- data mined to find associations
Sequential patterns- data used to anticipate behavior patterns and trends----- a store discovers from its data that customers who purchase sunscreen products also purchase sunglasses
Data mining gives people insights into data
Harrah's Entertainment Case
Total Rewards Program
Mined customer data to create 90 demographic clusters for different direct mail offers
Calculates the ROI on each customer
Found that 80% of profits from slot machine and electronic game machine players rather that 'high rollers'
Within first 2 years of program, revenue from repeat customers increased by $100 million
Executive information systems
EIS - systems for executives
EIS an "executive summary" form of DSS that helps executives
Gauge company performance- sales, production, earnings
Scan the environment for news on gov legislation, competition
While easing information overload
1) Provides access to summary performance
2) Uses graphics to display and visualize the data in a user-friendly fashion
3) Has a minimum of analysis for modeling capaility beyond that for examining summary data
Xerox Corporation
Objective for EIS at xerox was to improve communications and strategic planning
Quick access to related information at the right time--- Executive meetings
More efficient and better planning, especially across divisions--- Explore relationships between plans and activities at several divisions
Xerox corporate chief of staff was executive sponsor of EIS development