Lecture09-DSS

9-1

Decision Support Systems

Decision SupportMIS and DSS

Artificial IntelligenceExpert Systems

9-3

Learning Objectives

1. Identify the changes taking place in the form and use of decision support in business.

2. Identify the role and reporting alternatives of management information systems.

3. Describe how online analytical processing can meet key information needs of managers.

4. Explain the decision support system concept and how it differs from traditional management information systems.

9-4

Learning Objectives

5. Explain how the following information systems can support the information needs of executives, managers, and business professionals:

a. Executive information systemsb. Enterprise information portalsc. Knowledge management systems

9-5

Learning Objectives

5. Identify how neural networks, fuzzy logic, genetic algorithms, virtual reality, and intelligent agents can be used in business.

6. Give examples of several ways expert systems can be used in business decision-making situations.

9-6

Case 1: Centralized Business Intelligence at Work

Starting each business-intelligence project from scratch leads toReinventing the wheelHigh development and support costsIncompatible systems

Some companies are standardizing on fewer business-intelligence tools and making them available throughout the organization and

Business-intelligence competency centers

9-7

Case Study Questions

1. What is business intelligence? Why are business intelligence systems such a popular business application of IT?

2. What is the business value of the various BI applications discussed in the case?

3. Is a business-intelligence system an MIS or a DSS?

9-8

Real World Internet Activity

1. Companies are taking advantage of the competitive edge they enjoy from high-quality business intelligence. To meet the demand for applications to support the process, vendors are developing a wide variety of offerings. Using the Internet,

See if you can find several examples of software products to support the management of business intelligence.

Do they all take the same approach, or are there different ways of managing the process?

9-9

Real World Group Activity

Business intelligence competency centers can be quite costly to start and maintain. There prevalence, however, suggests the benefits are worth the costs. In small groups,Discuss the various skills and job roles necessary

for a competitive business intelligence competency center.

Can such centers be considered competitive advantage or simply competitive necessity?

9-10

Information required at different management levels

9-11

Levels of Management Decision Making

Strategic managementExecutives develop organizational goals,

strategies, policies, and objectives As part of a strategic planning process

Tactical managementManagers and business professionals in self-

directed teams Develop short- and medium-range plans,

schedules and budgets Specify the policies, procedures and business

objectives for their subunits

9-12

Levels of Management Decision Making

Operational managementManagers or members of self-directed teams Develop short-range plans such as weekly

production schedules

9-13

Information Quality

Information products whose characteristics, attributes, or qualities make the information more value

Information has 3 dimensions:TimeContentForm

9-14

Attributes of Information Quality

9-15

Decision Structure

Structured – situations where the procedures to follow when a decision is needed can be specified in advance

Unstructured – decision situations where it is not possible to specify in advance most of the decision procedures to follow

Semistructured - decision procedures that can be prespecified, but not enough to lead to a definite recommended decision

9-16

Information Systems to support decisions

Management Information Systems


Decision support provided

Provide information about the performance of the organization

Provide information and techniques to analyze specific problems

Information form and frequency

Periodic, exception, demand, and push reports and responses

Interactive inquiries and responses

Information format

Prespecified, fixed format Ad hoc, flexible, and adaptable format

Information processing methodology

Information produced by extraction and manipulation of business data

Information produced by analytical modeling of business data

9-17

Decision Support Trends

Personalized proactive decision analyticsWeb-Based applicationsDecisions at lower levels of management and

by teams and individualsBusiness intelligence applications

9-18

Business Intelligence Applications

9-19


DSSProvide interactive information support to

managers and business professionals during the decision-making process

Use:Analytical modelsSpecialized databasesA decision maker’s own insights and judgmentsInteractive computer-based modeling

To support semistructured business decisions

9-20

DSS components

9-21

DSS Model base

Model baseA software component that consists of models

used in computational and analytical routines that mathematically express relations among variables

Examples:Linear programming models,Multiple regression forecasting modelsCapital budgeting present value models

9-22

Management Information Systems

MISProduces information products that support

many of the day-to-day decision-making needs of managers and business professionals

Prespecified reports, displays and responsesSupport more structured decisions

9-23

MIS Reporting Alternatives

Periodic Scheduled ReportsPrespecified format on a regular basis

Exception ReportsReports about exceptional conditionsMay be produced regularly or when exception

occursDemand Reports and Responses

Information available when demandedPush Reporting

Information pushed to manager

9-24

Online Analytical Processing

OLAPEnables mangers and analysts to examine and

manipulate large amounts of detailed and consolidated data from many perspectives

Done interactively in real time with rapid response

9-25

OLAP Analytical Operations

Consolidation Aggregation of data

Drill-down Display detail data that comprise consolidated

dataSlicing and Dicing

Ability to look at the database from different viewpoints

9-26

OLAP Technology

9-27

Geographic Information Systems

GISDSS that uses geographic databases to construct

and display maps and other graphics displaysThat support decisions affecting the geographic

distribution of people and other resourcesOften used with Global Position Systems (GPS)

devices

9-28

Data Visualization Systems

DVS DSS that represents complex data using

interactive three-dimensional graphical forms such as charts, graphs, and maps

DVS tools help users to interactively sort, subdivide, combine, and organize data while it is in its graphical form.

9-29

Using DSS

What-if Analysis End user makes changes to variables, or

relationships among variables, and observes the resulting changes in the values of other variables

Sensitivity Analysis Value of only one variable is changed repeatedly

and the resulting changes in other variables are observed

9-30

Using DSS

Goal-SeekingSet a target value for a variable and then

repeatedly change other variables until the target value is achieved

How can analysisOptimization

Goal is to find the optimum value for one or more target variables given certain constraints

One or more other variables are changed repeatedly until the best values for the target variables are discovered

9-31

Data Mining

Main purpose is to provide decision support to managers and business professionals through knowledge discovery

Analyzes vast store of historical business dataTries to discover patterns, trends, and

correlations hidden in the data that can help a company improve its business performance

Use regression, decision tree, neural network, cluster analysis, or market basket analysis

9-32

Market Basket Analysis

One of most common data mining for marketing

The purpose is to determine what products customers purchase together with other products

9-33

Executive Information Systems

EISCombine many features of MIS and DSSProvide top executives with immediate and easy

access to informationAbout the factors that are critical to

accomplishing an organization’s strategic objectives (Critical success factors)

So popular, expanded to managers, analysts and other knowledge workers

9-34

Features of an EIS

Information presented in forms tailored to the preferences of the executives using the systemCustomizable graphical user interfacesException reportingTrend analysisDrill down capability

9-35

Enterprise Interface Portals

EIPWeb-based interface Integration of MIS, DSS, EIS, and other

technologiesGives all intranet users and selected extranet

users access To a variety of internal and external business

applications and servicesTypically tailored to the user giving them a

personalized digital dashboard

9-36

Enterprise Information Portal Components

9-37

Knowledge Management Systems

The use of information technology to help gather, organize, and share business knowledge within an organization

Enterprise Knowledge PortalsEIPs that are the entry to corporate intranets

that serve as knowledge management systems

9-38

Enterprise Knowledge Portals

9-39

Case 2 Artificial IntelligenceThe Dawn of the Digital Brain

Numenta will translate the way the brain works into an algorithm that can run on a new type of computer

The human brain does not work like a computer

Intelligence, according to Hawkins, is pattern recognition

9-40


1. What is the business value of AI technologies in business today? What value might exist if Jeff Hawkins can build a machine to think like humans?

2. Why has artificial intelligence become so important to business?

3. Why do you think banks and other financial institutions are leading users of AI technologies? What are the benefits and limitations of this technology?

9-41


1. The concept of human thought is still a mystery despite the development of our understanding of the fundamental processes of the human brain. For many years, scientists have worked hard to develop humanlike machines, but none have been able to perform as well as the human brain when it comes to reasoning. Using the Internet,

See if you can find evidence of other projects similar to that of Hawkins.

What is the current state of the art in this area of research and development?

9-42


The case ends by asking the question of whether we can ever build a machine more intelligent than a human. The real question is what will we do with it, or with us, if we are successful. In small groups,Brainstorm about a future with machines that

can equal or exceed the intelligence of humans.What good would come of such an

accomplishment?What potential risks might occur?

9-43

Artificial Intelligence (AI)

A field of science and technology based on disciplines such as computer science, biology, psychology, linguistics, mathematics, and engineering

Goal is to develop computers that can simulate the ability to think, as well as see, hear, walk, talk, and feel

9-44

Attributes of Intelligent Behavior

Think and reasonUse reason to solve problemsLearn or understand from experienceAcquire and apply knowledgeExhibit creativity and imaginationDeal with complex or perplexing situationsRespond quickly and successfully to new

situationsRecognize the relative importance of elements

in a situationHandle ambiguous, incomplete, or erroneous

information

9-45

Domains of Artificial Intelligence

9-46

Cognitive Science

Based in biology, neurology, psychology, etc.Focuses on researching how the human brain

works and how humans think and learn

9-47

Robotics

Based in AI, engineering and physiologyRobot machines with computer intelligence

and computer controlled, humanlike physical capabilities

9-48

Natural Interfaces

Based in linguistics, psychology, computer science, etc.

Includes natural language and speech recognitionDevelopment of multisensory devices that use a

variety of body movements to operate computersVirtual reality

Using multisensory human-computer interfaces that enable human users to experience computer-simulated objects, spaces and “worlds” as if they actually exist

9-49

Expert Systems

ESA knowledge-based information system (KBIS)

that uses its knowledge about a specific, complex application to act as an expert consultant to end users

KBIS is a system that adds a knowledge base to the other components on an IS

9-50

Expert System Components

Knowledge BaseFacts about specific subject areaHeuristics that express the reasoning procedures

of an expert (rules of thumb)Software Resources

Inference engine processes the knowledge and makes inferences to make recommend course of action

User interface programs to communicate with end user

Explanation programs to explain the reasoning process to end user

9-51

Expert System Components

9-52

Methods of Knowledge Representation

Case-Based – knowledge organized in form of casesCases: examples of past performance,

occurrences and experiencesFrame-Based – knowledge organized in a

hierarchy or network of framesFrames: entities consisting of a complex

package of data values

9-53

Methods of Knowledge Representation

Object-Based – knowledge organized in network of objectsObjects: data elements and the methods or

processes that act on those dataRule-Based – knowledge represented in rules

and statements of factRules: statements that typically take the form of

a premise and a conclusionSuch as, If (condition) then (conclusion)

9-54

Expert System Benefits

Faster and more consistent than an expertCan have the knowledge of several expertsDoes not get tired or distracted by overwork or

stressHelps preserve and reproduce the knowledge

of experts

9-55

Expert System Limitations

Limited focusInability to learnMaintenance problemsDevelopmental costsCan only solve specific types of problems in a

limited domain of knowledge

9-56

Suitability Criteria for Expert Systems

Domain: subject area relatively small and limited to well-defined area

Expertise: solutions require the efforts of an expert

Complexity: solution of the problem is a complex task that requires logical inference processing (not possible in conventional information processing)

Structure: solution process must be able to cope with ill-structured, uncertain, missing and conflicting data

Availability: an expert exists who is articulate and cooperative

9-57

Development Tool

Expert System ShellSoftware package consisting of an expert system

without its knowledge baseHas inference engine and user interface

programs

9-58

Knowledge Engineer

A professional who works with experts to capture the knowledge they possess

Builds the knowledge base using an iterative, prototyping process

9-59

Neural Networks

Computing systems modeled after the brain’s mesh-like network of interconnected processing elements, called neurons

Interconnected processors operate in parallel and interact with each other

Allows network to learn from data it processes

9-60

Fuzzy Logic

Method of reasoning that resembles human reasoning

Allows for approximate values and inferences and incomplete or ambiguous data instead of relying only on crisp data

Uses terms such as “very high” rather than precise measures

9-61

Genetic Algorithms

Software that uses Darwinian (survival of the fittest), randomizing,

and other mathematical functions To simulate an evolutionary process that can

yield increasingly better solutions to a problem

9-62

Virtual Reality (VR)

Computer-simulated reality Relies on multisensory input/output devices

such asa tracking headset with video goggles and

stereo earphones, a data glove or jumpsuit with fiber-optic sensors

that track your body movements, and a walker that monitors the movement of your

feet

9-63

Intelligent Agents

A software surrogate for an end user or a process that fulfills a stated need or activity

Uses its built-in and learned knowledge base To make decisions and accomplish tasks in a

way that fulfills the intentions of a user

Also called software robots or bots

9-64

User Interface Agents

Interface Tutors – observe user computer operations, correct user mistakes, and provide hints and advice on efficient software use

Presentation – show information in a variety of forms and media based on user preferences

Network Navigation – discover paths to information and provide ways to view information based on user preferences

Role-Playing – play what-if games and other roles to help users understand information and make better decisions

9-65

Information Management Agents

Search Agents – help users find files and databases, search for desired information, and suggest and find new types of information products, media, and resources

Information Brokers – provide commercial services to discover and develop information resources that fit the business or personal needs of a user

Information Filters – receive, find, filter, discard, save, forward, and notify users about products received or desired

9-66

Case 3: Robots are the common denominator

Telerobotic-assisted medical proceduresFlexible automobile body shop with wireless

inventory replenishment

9-67


1. What is the current and future business value of robotics?

2. Would you be comfortable with a robot performing surgery on you? Why or why not?

3. The robots being used by Ford Motor Co. are contributing to a streamlining of their supply chain. What other applications of robots can you envision to improve supply chain management beyond those described in the case?

9-68


1. Applications for robots are being explored in every possible setting. Using the Internet,

See if you can find some examples where robots have been used to improve a process, reduce costs, or make the impossible possible.

9-69


The previous case in the chapter described the development of a machine that could think just like humans. Combined with advanced robotics, such a machine could conceivably perform most actions as well, or possibly better, than humans. In small groups,Discuss how the combination of advanced AI and

robotics could be used to create business value.What would we want such machines to be able

to do or not do?

Documents

Lecture09-DSS