1.1 © 2007 by Prentice Hall BME305 Management Information Systems B. Sc. Business Administration (External) Degree University of Sri Jayewardenepura B

1.1 © 2007 by Prentice Hall

BME305 Management Information Systems

B. Sc. Business Administration (External) Degree

University of Sri Jayewardenepura

B. Sc. Business Administration (External) Degree

University of Sri Jayewardenepura


Information Systems in Global Business

Today

Information Systems in Global Business

Today

The Role of Information Systems in Business Today

Perspectives on Information Systems – what , composition

Contemporary Approaches to Information Systems



• How information systems are transforming business• Increased technology investments (10% – 15%)• Increased responsiveness to customer demands• Shifts in media and advertising (through email, blogs, google ads)• New laws – cyber laws

• Globalization opportunities• Internet has drastically reduced costs of operating on global scale

Reduced global operational cost World wide market place (customer / supplier) Finding low cost suppliers , managing production faculty in

other countries

Management Information SystemsChapter 1 Information Systems in Global Business Today


• In the emerging, fully digital firm– Significant business relationships are digitally enabled

and mediated– Core business processes are accomplished through

digital networks– Key corporate assets are managed digitally

• Digital firms offer greater flexibility in organization and management– Time shifting, space shifting




• Growing interdependence between ability to use information technology

and ability to implement corporate strategies and achieve corporate goals

• Business firms invest heavily in information systems to achieve six strategic business objectives:

– Operational excellence use as tool to achieve higher efficiency and productivity

– New products, services, and business models Music industry – new products and new model - eg. me.lk, ebay

– Customer and supplier intimacy / familiarity hotels keep customer information, amerzon customer tracking

– Improved decision making - Best guesses v right decision - through right info @ right time

– Competitive advantage – doing the things better than others – Survival – IT is necessary item to survive , eg Banks






The Interdependence Between Organizations and Information Technology

There is a growing interdependence between a firm’s information systems and its business capabilities. Changes in strategy, rules, and business processes increasingly require changes in hardware, software, databases, and telecommunications. Often, what the organization would like to do depends on what its systems will permit it to do.

Figure 1-2



Perspectives on Information Systems


An information system contains information about an organization and its surrounding environment. Three basic activities—input, processing, and output—produce the information organizations need. Feedback is output returned to appropriate people or activities in the organization to evaluate and refine the input. Environmental actors, such as customers, suppliers, competitors, stockholders, and regulatory agencies, interact with the organization and its information systems.

Figure 1-4

Functions of an Information System




Using information systems effectively requires an understanding of the organization, management, and information technology shaping the systems. An information system creates value for the firm as an organizational and management solution to challenges posed by the environment.

Figure 1-5

Information Systems Are More Than Computers


• Organizational dimension of IS– Hierarchy of authority, responsibility

• Senior management• Middle management• Operational management• Knowledge workers• Data workers• Production or service workers

– Separation of business functions• Sales and marketing• Human resources• Finance and accounting• Production and manufacturing)

– Unique business processes– Unique business culture– Organizational politics




• Management dimension of information system

– Managers set organizational strategy for responding to business challenges

– In addition, managers must act creatively:• Creation of new products and services• Occasionally re-creating the organization




• Technology dimension of information systems– Computer hardware and software– Data management technology– Networking and telecommunications

technology• Networks, the Internet, intranets and extranets,

World Wide Web

– IT infrastructure: provides platform that system is built on




• Dimensions of UPS tracking system– Organizational:

• Procedures for tracking packages and managing inventory and provide information

– Management: • Monitor service levels and costs

– Technology: • Handheld computers, bar-code scanners, networks,

desktop computers, etc.







The study of information systems deals with issues and insights contributed from technical and behavioral disciplines.

Figure 1-9



• Technical approach• Emphasizes mathematically based models• Computer science, management science,

operations research• Behavioral approach

• Behavioral issues (strategic business integration, implementation, how IS effects on groups, individuals and org etc.) eg. Freedom, Power

• Psychology, economics, sociology




• Sociotechnical view• Optimal organizational performance

achieved by jointly optimizing both social and technical systems used in production

• Helps avoid purely technological approach






In a sociotechnical perspective, the performance of a system is optimized when both the technology and the organization mutually adjust to one another until a satisfactory fit is obtained.

Figure 1-10

A Sociotechnical Perspective on Information Systems

How do we do

?



Global E-Business: How Businesses Use Information

Systems

Global E-Business: How Businesses Use Information

Systems

Business Processes and Information Systems

Types of Business Information Systems



• Business processes:• Workflows of material, information, knowledge• Sets of activities, steps• May be tied to functional area or be cross-

functional• Businesses: Can be seen as collection of

business processes• Business processes may be assets or liabilities

Management Information SystemsChapter 2 Global E-Business: How Businesses Use Information Systems


• Examples of functional business processes– Manufacturing and production

• Assembling the product

– Sales and marketing• Identifying customers

– Finance and accounting• Creating financial statements

– Human resources• Hiring employees




The Order Fulfillment Process

Figure 2-1

Fulfilling a customer order involves a complex set of steps that requires the close coordination of the sales, accounting, and manufacturing functions.





• Information technology enhances business processes in two main ways:• Increasing efficiency of existing processes

• Automating steps that were manual (POS Terminals)

• Enabling entirely new processes that are capable of transforming the businesses• Change flow of information• Replace sequential steps with parallel steps• Eliminate delays in decision making

Flexible organizations, internal memo, BPO



• System types:– Transaction processing systems: supporting

operational level employees

– Management information systems and decision-support systems: supporting managers

– Decision support systems (Business Intelligence Systems)

– Executive support systems: supporting executives




Interrelationships Among Systems

Figure 2-10

The various types of systems in the organization have interdependencies. TPS are major producers of information that is required by many other systems in the firm, which, in turn, produce information for other systems. These different types of systems are loosely coupled in most business firms, but increasingly firms are using new technologies to integrate information that resides in many different systems.




• Enterprise applications• Span functional areas• Execute business processes across firm• Include all levels of management• Four major applications:

• Enterprise systems• Supply chain management systems• Customer relationship management systems• Knowledge management systems

Systems That Span the Enterprise



Enterprise Application Architecture

Figure 2-11

Enterprise applications automate processes that span multiple business functions and organizational levels and may extend outside the organization.

Systems That Span the Enterprise



More detail available on given slides


Information Systems, Organizations, and

Strategy

Information Systems, Organizations, and

Strategy

Organizations / Information Systems and relationship

How Information Systems Impact Organizations and Business Firms

Using Information Systems to Achieve Competitive Advantage

Using Systems for Competitive Advantage: Management Issues


Organizations and Information Systems

• Information technology and organizations influence one another• Complex relationship influenced by organization’s

structure, business processes, politics, culture, environment, and management decisions

Management Information SystemsChapter 3 Information Systems, Organizations, and Strategy


The Two-Way Relationship Between Organizations and Information Technology

Eg; Internal Communication – Message, emails

This complex two-way relationship is mediated by many factors, not the least of which are the decisions made—or not made—by managers. Other factors mediating the relationship include the organizational culture, structure, politics, business processes, and environment.



Eg; Decide (what) systems, (How) implementation



• What is an organization?• Technical definition:

• Stable, formal social structure that takes resources from environment and processes to produce outputs.

• A formal legal entity with internal rules and procedures, as well as a social structure

• Behavioral definition: • A collection of rights, privileges, obligations, and

responsibilities that is delicately balanced over a period of time through conflict and conflict resolution



The Technical Microeconomic Definition of the Organization

Figure 3-2

In the microeconomic definition of organizations, capital and labor (the primary production factors provided by the environment) are transformed by the firm through the production process into products and services (outputs to the environment). The products and services are consumed by the environment, which supplies additional capital and labor as inputs in the feedback loop.




The Behavioral View of Organizations

Figure 3-3The behavioral view of organizations emphasizes group relationships, values, and structures.




Organizations

?


Organizations

?Understanding the

organizationsDesign successful

systems



• Features of organizations• All modern organizations share some characteristics, such as:

• Use of hierarchical structure• Accountability, authority in system of impartial decision-making• Adherence to principle of efficiency• Other features include:

• Routines (standard operating procedures) and business processes (Collections of routines)

• organizational politics • culture • Environments• Structures



More detail available on given slides




• Economic impacts• IT changes relative costs of capital and the costs of

information • Information systems technology is a factor of

production, like capital and labor – cyber shops• IT affects the cost and quality of information and

changes economics of information• Information technology helps firms contract in size

because it can reduce transaction costs (the cost of participating in markets). Outsourcing expands




• Transaction cost theory• Firms seek to economize on cost of

participating in market (transaction costs)• IT lowers market transaction costs for firm,

making it worthwhile for firms to transact with other firms rather than grow the number of employees


The Transaction Cost Theory of the Impact of Information Technology on the Organization

Figure 3-6

Firms traditionally grew in size to reduce transaction costs. IT potentially reduces the costs for a given size, shifting the transaction cost curve inward, opening up the possibility of revenue growth without increasing size, or even revenue growth accompanied by shrinking size.






• Agency theory: • Firm is nexus of contracts among self-

interested parties requiring supervision• Firms experience agency costs (the cost of

managing and supervising) which rise as firm grows

• IT can reduce agency costs, making it possible for firms to grow without adding to the costs of supervising, and without adding employees


The Agency Cost Theory of the Impact of Information Technology on the Organization

Figure 3-7

As firms grow in size and complexity, traditionally they experience rising agency costs. IT shifts the agency cost curve down and to the right, enabling firms to increase size while lowering agency costs.






• Organizational and behavioral impacts

• IT flattens organizations

• Decision-making pushed to lower levels

• Fewer managers needed (IT enables faster decision-making and increases span of control)

• Post-industrial organizations

• Organizations flatten because in post-industrial societies, authority increasingly relies on knowledge and competence rather than formal positions




• Organizational resistance to change

• Information systems become bound up in organizational politics because they influence access to a key resource -- information

• Information systems potentially change an organization’s structure, culture, politics, and work

• Most common reason for failure of large projects is due to organizational & political resistance to change




• The Internet and organizations• The Internet increases the accessibility, storage, and

distribution of information and knowledge for organizations

• The Internet can greatly lower transaction and agency costs

• E.g. online help, electronic manual, network based problem solving (remote login)




• Central organizational factors to consider when planning a new system:• Environment• Structure

• Hierarchy, specialization, routines, business processes• Culture and politics• Type of organization and style of leadership • Main interest groups affected by system; attitudes of

end users• Tasks, decisions, and business processes the system

will assist



• Business value chain model• Views firm as series of activities that add value to

products or services• Highlights activities where competitive strategies can

best be applied• Primary activities vs. secondary activities

• At each stage, determine how information systems can improve operational efficiency and improve customer and supplier intimacy

• Utilize benchmarking, industry best practices




The Value Chain Model

Figure 3-11

This figure provides examples of systems for both primary and support activities of a firm and of its value partners that can add a margin of value to a firm’s products or services.





• Michael Porter’s competitive forces model• Provides general view of firm, its competitors, and

environment• Five competitive forces shape fate of firm

• Traditional competitors • New market entrants • Substitute products and services• Customers• Suppliers




Porter’s Competitive Forces Model

Figure 3-10

In Porter’s competitive forces model, the strategic position of the firm and its strategies are determined not only by competition with its traditional direct competitors but also by four forces in the industry’s environment: new market entrants, substitute products, customers, and suppliers.




• Traditional competitors• All firms share market space with competitors who

are continuously devising new products, services, efficiencies, switching costs

• New market entrants • Some industries have high barriers to entry, e.g.

computer chip business• New companies have new equipment, younger

workers, but little brand recognition




• Substitute products and services• Substitutes customers might use if your prices

become too high, e.g. iTunes substitutes for CDs• Customers

• Can customers easily switch to competitor’s products? Can they force businesses to compete on price alone in transparent marketplace?

• Suppliers• Market power of suppliers when firm cannot raise

prices as fast as suppliers




• Four generic strategies for dealing with competitive forces, enabled by using IT

• Low-cost leadership

• Product differentiation

• Focus on market niche

• Strengthen customer and supplier intimacy




• Low-cost leadership• produce products and services at a lower price than

competitors while enhancing quality and level of service.

• E.g. reducing stocks through JIT, automated the process

• Product differentiation• Enable new products or services, greatly change

customer convenience and experience• E.g. adding new feature through IT. Banking, mobile, Apple

iPhone, Google• Personalized products – PC, Cars




• Focus on market niche• Use information systems to enable a focused strategy on a

single market niche; specialize.• IS support to analyze buying patterns, taste, preference

closely. • E.g. Hilton Hotels

• Strengthen customer and supplier intimacy’• Use information systems to develop strong ties and loyalty with

customers and suppliers; increase switching costs• E.g. Chrysler, Amazon• Customization and personalization techniques (for e solutions)




• The Internet’s impact on competitive advantage• Transformation, destruction, threat to some industries

• E.g. travel agency, printed encyclopedia, newspaper• Competitive forces still at work, but rivalry more intense• Universal standards allow new rivals, entrants to market• New opportunities for building brands and loyal customer

bases





• Strategic advantage at industry level:• Use IT to develop industry-wide standards for exchanging

information or transactions electronically, to increase efficiency, make product substitution less likely, and perhaps raise entry costs

• Value web: • Collection of independent firms using highly synchronized IT to

coordinate value chains to produce product or service collectively

• More customer driven, less linear operation than traditional value chain




The Value Web

Figure 3-12

The value web is a networked system that can synchronize the value chains of business partners within an industry to respond rapidly to changes in supply and demand.




• Information systems can improve overall performance of business units by promoting synergies and core competencies• Synergies

• When output of some units used as inputs to others, or organizations pool markets and expertise

• E.g. Merger of Google and Mobitel




• Core competencies• Activity for which firm is world-class leader• Relies on knowledge, experience, and sharing this

across business units• E.g. IS to create central core competencies




• Network-based strategies• Take advantage of firm’s abilities to network

with each other• Include use of:

• Network economics• Virtual company model• Business ecosystems




• Network economics• Traditional economics: Law of diminishing returns

• The more any given resource is applied to production, the lower the marginal gain in output, until a point is reached where the additional inputs produce no additional outputs

• Network economics:• Business model based on networks. Marginal cost of adding

new participant almost zero, with much greater marginal gain

• Value of community grows with size (eBay)• Value of software grows as installed customer base grows –

continue with product and more user support




• Virtual company strategy• Virtual company uses networks to ally with other

companies to create and distribute products without being limited by traditional organizational boundaries or physical locations

• E.g. Li Fung manages production, shipment of garments for major fashion companies, outsourcing all work to over 7,500 suppliers




• Business ecosystems• Industry sets of firms providing related services and products

• Microsoft platform used by thousands of firms for their own products

• Wal-Mart’s order entry and inventory management system

• Keystone firms: Dominate ecosystem and create platform used by other firms

• Niche firms: Rely on platform developed by keystone firm• Individual firms can consider how IT will enable them to

become profitable niche players in larger ecosystems





• Sustaining competitive advantage• Because competitors can retaliate and copy strategic systems,

competitive advantage is not always sustainable; systems may become tools for survival

• Performing strategic systems analysis• What is structure of industry? – competitive forces• What are value chains for this firm?

• Managing strategic transitions• Adopting strategic systems requires changes in business

goals, relationships with customers and suppliers, and business processes


Using Systems for Competitive Advantage: Management Issues


Ethical and Social Issues in Information

Systems

Ethical and Social Issues in Information

Systems


Understanding Ethical and Social Issues Related to Systems

• A model for thinking about ethical, social, and political issues

• Five moral dimensions of the information age• Information rights and obligations• Property rights and obligations• Accountability and control• System quality• Quality of life

• Key technology trends that raise ethical issues

Management Information SystemsChapter 4 Ethical and Social Issues in Information Systems


• Information rights: Privacy and freedom in the

Internet Age• The European directive on data protection

• Internet challenges to privacy

• Technical solutions

• Property rights: Intellectual property• Trade secrets

• Copyright

• Patents

• Challenges to intellectual property rights

The Moral Dimensions of Information Systems



• Accountability, liability, and control• Computer-related liability problems

• System quality: Data quality and system errors

• Quality of life: Equity, access, and boundaries

• Balancing power: Center versus distributed

• Rapidity of change: global rapid change wiped-out business and

your job quickly

• Maintaining boundaries: do anything any where - Family, work,

and leisure

• Dependence and vulnerability – what happen if system fails




• Quality of life: Equity, access, and boundaries (cont’d)

• Computer crime and abuse

• Employment: Trickle-down technology and reengineering

job loss

• Equity and access: does everyone have equal opportunity

to participate digital age? Increasing racial and social

class cleavages

• Health risks: RSI, CVS, and Technostress




Enhancing Decision Making

Enhancing Decision Making


Decision Making and Information Systems

• Business value of improved decision making

Decide the gain / lose (what is the key source)

• Types of decisions

Unstructured / semi structured/ structured

Management Information SystemsChapter 12 Enhancing Decision Making


Stages in Decision Making

Figure 12-2The decision-making process can be broken down into four stages.




• Managers and decision making in the real world• Managerial roles

• Interpersonal role- figurehead for the org. (symbolic duties)

• Informational role – information dissemination (receiving up-to-date information and re distribute)

• Decision role- make decisions

• Real-world decision making• IS are not helpful to all managerial roles

• Result depends on

• Information quality – high quality decision need high quality info

• Management filters – biases, less attention make bad decisions

• Organizational culture – decisions for balance interest groups rather than best solution




Systems for Decision Support

• Management information systems (MIS)

• Decision-support systems (DSS)

• Business value of executive support systems

• Data visualization and geographic information systems (GIS)

• Web-based customer decision-support systems



Building SystemsBuilding Systems


Organizational Change Carries Risks and Rewards

Figure 13-1

The most common forms of organizational change are automation and rationalization. These relatively slow-moving and slow-changing strategies present modest returns but little risk. Faster and more comprehensive change—such as reengineering and paradigm shifts—carries high rewards but offers substantial chances of failure.

Systems as Planned Organizational Change

Management Information SystemsChapter 13 Building Systems


Overview of Systems Development

• Systems analysis• Establishing information requirements

• Systems design• The role of end users

• Completing the systems development process• Programming

• Testing

• Conversion

• Production and Maintenance



The Systems Development Process

Figure 13-3

Building a system can be broken down into six core activities.

Overview of Systems Development



Alternative Systems-Building Approaches

• Traditional systems life cycle

• Prototyping

• Steps in prototyping

• Advantages and disadvantages of prototyping

• End-user development – developed by end user with little

help with expert

• Application software packages and outsourcing



• Rapid application development (RAD)

• Component-based development and Web services• Web services and service-oriented computing

Application Development for the Digital Firm



Introduction to the Computers

1.102 © 2007 by Prentice Hall102

What Is a Computer and What Does It Do?

Computer: A programmable, electronic device that accepts data, performs operations on that data, and stores the data or results as needed

Computers follow instructions, called programs, which determine the tasks the computer will perform

Basic operationsInput: Entering data into the computerProcessing: Performing operations on the dataOutput: Presenting the resultsStorage: Saving data, programs, or output for future useCommunications: Sending or receiving data


Hardware

Hardware: The physical parts of a computerInternal hardware

Located inside the main box (system unit) of the computer

External hardwareLocated outside the system unit and plug into ports located on the exterior of the system unit

Hardware associated with all five computer operations


Hardware


Hardware

Input devicesUsed to input data into the computerKeyboards, mice, scanners, cameras, microphones, joysticks, etc.

Processing devicesPerform calculations and control computer’s operationCentral processing unit (CPU) and memory

Output devicesPresent results to the userMonitors, printers, speakers, projectors, etc.


Hardware

Storage devicesUsed to store data on or access data from storage mediaHard drives, DVD disks and drives, USB flash drives, etc.Communications devicesAllow users to communicate with others and to electronically access information

Modems, network adapters, etc.


Software

Software: The programs or instructions used to tell the computer hardware what to do

System software: Operating system allows a computer to operateApplication software: Performs specific tasks or applications


Computers to Fit Every Need

Six basic categories of computersEmbedded computersMobile devicesPersonal computersMidrange serversMainframe computersSupercomputers


Computer Networks and the Internet

Computer network: A collection of hardware and other devices that are connected together.

Users can share hardware, software, and dataUsers can communicate with each other

Network servers: Manage resources on a networkClients: Access resources through the network serverComputer networks exist in many sizes and typesHome networksSchool and small business networksLarge corporatePublic wireless networksThe Internet


What Are the Internet and the World Wide Web?

Internet: The largest and most well-known computer network in the worldIndividuals connect to the Internet using an Internet service provider (ISP)World Wide Web: One resource (a vast collection of Web pages) available through the Internet

Web sites contain Web pages stored on Web serversWeb pages viewed using a Web browser (Internet Explorer, Safari, Firefox, Opera, etc.

A wide variety of information is available through the Web


IP Addresses and Domain Names

IP addresses are numeric and uniqueDomain Names: Correspond to IP addresses

Top-level domains (TLDs) identifies type of organization or its location


Uniform Resource Locators (URLs)


E-Mail Addresses

E-mail addresses consist of:Username: A persons’ identifying name for a particular domainThe @ symbolDomain name for the computer that will be handling the person’s e-mail (mail server)

Pronouncing Internet addresses


Computers and Society

The vast improvements in technology over the past decade have had a distinct impact on daily life, both at home and at workMany benefits of a computer-oriented societyAlso risks

Computer virusesIdentity theft and phishingPrivacy issues

Differences in online communicationsThe anonymity factorInformation integrity (not all information on the Internet is accurate)


Foundations of Business Intelligence:

Databases and Information

Management

Foundations of Business Intelligence:

Databases and Information

Management


Organizing Data in a Traditional File Environment

• File organization concepts• Computer system uses hierarchies

• Field: Group of characters• Record: Group of related fields• File: Group of records of same type • Database: Group of related files

• Record: Describes an entity• Entity: Person, place, thing on which we store

information• Attribute: Each characteristic, or quality, describing entity

• E.g. Attributes Date or Grade belong to entity COURSE

Management Information SystemsChapter 6 Foundations of Business Intelligence: Databases

and Information Management


The Data Hierarchy

Figure 6-1

A computer system organizes data in a hierarchy that starts with the bit, which represents either a 0 or a 1. Bits can be grouped to form a byte to represent one character, number, or symbol. Bytes can be grouped to form a field, and related fields can be grouped to form a record. Related records can be collected to form a file, and related files can be organized into a database.






• Problems with the traditional file processing (files maintained separately by different departments)• Data redundancy and inconsistency

• Data redundancy: Presence of duplicate data in multiple files• Data inconsistency: Same attribute has different values

• Program-data dependence:• When changes in program requires changes to data accessed by

program• Lack of flexibility• Poor security• Lack of data sharing and availability




Traditional File Processing

Figure 6-2

The use of a traditional approach to file processing encourages each functional area in a corporation to develop specialized applications and files. Each application requires a unique data file that is likely to be a subset of the master file. These subsets of the master file lead to data redundancy and inconsistency, processing inflexibility, and wasted storage resources.





• Database: • Collection of data organized to serve many applications by

centralizing data and controlling redundant data

• Database management system: • Interfaces between application programs and physical data files• Separates logical and physical views of data• Solves problems of traditional file environment

• Controls redundancy• Eliminated inconsistency• Uncouples programs and data• Enables central management and security

The Database Approach to Data Management




• Hierarchical and Network DBMS: Older systems• Hierarchical DBMS: Models one-to-many

relationships

• Network DBMS: Models many-to-many relationships

• Both less flexible than relational DBMS and do not support ad hoc, natural language





• Object-Oriented DBMS (OODBMS)• Stores data and procedures as objects

• Capable of managing graphics, multimedia, Java applets

• Relatively slow compared with relational DBMS for processing large numbers of transactions

• Hybrid object-relational DBMS: Provide capabilities of both OODBMS and relational DBMS





• Capabilities of Database Management Systems• Data definition capability: Specifies structure of database

content, used to create tables and define characteristics of fields

• Data dictionary: Automated or manual file storing definitions of data elements and their characteristics

• Data manipulation language: Used to add, change, delete, retrieve data from database • Structured Query Language (SQL)• Microsoft Access user tools for generation SQL

• Also: Many DBMS have report generation capabilities for creating polished reports (Crystal Reports)





Using Databases to Improve Business Performance and Decision Making



• Database warehouses• Data warehouse:

• Stores current and historical data from many core operational transaction systems

• Consolidates and standardizes information for use across enterprise, but data cannot be altered

• Data warehouse system will provide query, analysis, and reporting tools

• Data marts: • Subset of data warehouse with summarized or highly focused portion

of firm’s data for use by specific population of users• Typically focuses on single subject or line of business





• Business Intelligence: • Tools for consolidating, analyzing, and providing access

to vast amounts of data to help users make better business decisions

• E.g. Harrah’s Entertainment analyzes customers to develop gambling profiles and identify most profitable customers

• Principle tools include:• Software for database query and reporting• Online analytical processing (OLAP)• Data mining


Business Intelligence

Figure 6-14

A series of analytical tools works with data stored in databases to find patterns and insights for helping managers and employees make better decisions to improve organizational performance.








• Data mining:• More discovery driven than OLAP• Finds hidden patterns, relationships in large databases• Infers rules to predict future behavior• The patterns and rules are used to guide decision making

and forecast the effect of those decisions• Popularly used to provide detailed analyses of patterns in

customer data for one-to-one marketing campaigns or to identify profitable customers.

• Less well known: used to trace calls from specific neighborhoods that use stolen cell phones and phone accounts

Documents

1.1 © 2007 by Prentice Hall BME305 Management Information Systems B. Sc. Business Administration (External) Degree University of Sri Jayewardenepura B