Chapter 10 Decision Support Systems Slide 1 Well, Sort-of

Chapter 10 Decision Support Systems Slide 2 What is Business Intelligence?  Executive class information delivery and decision support software tools used by lower levels of management and by individuals and teams of business professionals

Chapter 10 Decision Support Systems Slide 3 How do we define a ‘decision’?  A position or opinion or judgment reached after consideration  The act of making up your mind about something  The commitment to irrevocably allocate valuable resources. A decision is a commitment to act. Action is therefore the irrevocable allocation of valuable resources.  A determination of future action  The main function of a manager

Chapter 10 Decision Support Systems Slide 4 What makes a good decision?  Ultimately, the end result What contributes to a good decision?  Many factors, including decision maker ability, experience, and even luck How can IT help?  By providing Quality Information: Information products whose characteristics, attributes, or qualities make the information more value

Chapter 10 Decision Support Systems Slide 5 What determines Information Quality?  Attributes of Information Quality:

Chapter 10 Decision Support Systems Slide 6 What Types of decisions are there?  Structured Decisions: For ax 2 + bx + c = 0, the value of x is given by: Situations where the procedures to follow when a decision is needed can be specified in advance  Semi-structured Decisions: Decision procedures that can be pre- specified, but not enough to lead to a definite recommended decision  Unstructured Decisions: Decision situations where it is not possible to specify in advance most of the decision procedures to follow

Chapter 10 Decision Support Systems Slide 7 How does business structure relate to businesses?

Chapter 10 Decision Support Systems Slide 8 How does business structure relate to businesses?  Strategic: Executives develop overall organizational goals, strategies, policies, and objectives as part of a strategic planning process  Tactical: Managers and business professionals in self-directed teams develop short- and medium-range plans, schedules and budgets and specify the policies, procedures and business objectives for their subunits  Operational: Managers or members of self-directed teams develop short- range plans such as weekly production schedules

Chapter 10 Decision Support Systems Slide 9 What is a decision support system?  Computer-based information systems that provide interactive information support to managers and business professionals during the decision-making process using the following to make semi structured business decisions  Intended to provide Support for individual (or Group), Ad hoc (impromptu), decision making  Intended to provide Support primarily for semi-structured or unstructured decision making (unlike standard Management Information Systems)  Combines data (from databases), analytical models and tools, a decision maker’s own insights and judgments, and an interactive, computer-based modeling process

Chapter 10 Decision Support Systems Slide 10 What doesn’t a decision support system do?  Provide the solution (it is only tool)  Be used over and over again (It was designed for unique decision making)  Always use the same analytical models and tools (The decision maker chooses the models and tools based on the problem at hand)

Chapter 10 Decision Support Systems Slide 11 Why are we studying DSS?  As companies migrate toward responsive e-business models, they are investing in new data-driven decision support application frameworks that help them respond rapidly to changing market conditions and customer needs. It is one way in which a company can become a ‘flexible’ organization

Chapter 10 Decision Support Systems Slide 12 What are the components of a DSS?  Model Base: The Software component that consists of models used in computa- tional and analytical routines that math- ematically express relationships among variables

Chapter 10 Decision Support Systems Slide 13 What types of DSS analysis are there?  What-if Analysis: User make changes to variables, or relationships among variables, and observe the resulting changes  Sensitivity Analysis: The value of only one variable is changed repeatedly and the resulting changes in other variables are observed  Goal-Seeking: The value of only one variable is changed repeatedly and the resulting changes in other variables are observed  Optimization: Find the optimum value for target variables given certain constraints

Chapter 10 Decision Support Systems Slide 14 How does Data Mining work?  Data mining software analyzes the vast stores of historical business data that have been prepared for analysis in corporate data warehouses, and tries to discover patterns, trends, and correlations hidden in the data that can help a company improve its business performance  Data mining software may perform regression, decision tree, neural network, cluster detection, or market basket analysis for a business  Market Basket Analysis (MBA): The purpose is to determine what products customers purchase together with other products

Chapter 10 Decision Support Systems Slide 15 What are Data Visualization Systems (DVS)?  DVS represent 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.

Chapter 10 Decision Support Systems Slide 16 What are Geographic Information Systems (GIS)?  DSS that uses geographic databases to construct and display maps and other graphics displays that support decisions affecting the geographic distribution of people and other resources

Chapter 10 Decision Support Systems Slide 17 What is On-Line Analytical Processing (OLAP)?  Software that enables mangers and analysts to interactively examine and manipulate large amounts of detailed and consolidated data from many perspectives What operations are involved?  Consolidation: aggregation of data  Drill-Down: detail data that comprise consolidated data  Slice and Dice: ability to look at the database from different viewpoints

Chapter 10 Decision Support Systems Slide 18 What OLAP Technologies are involved?

Chapter 10 Decision Support Systems Slide 19 What OLAP Technologies are involved?

Chapter 10 Decision Support Systems Slide 20 What is a Management Information System (MIS)?  An information system that produces information products that support many of the day-to-day decision-making needs of managers and business professionals Periodic Scheduled Reports Exception Reports Demand Reports and Responses Push Reporting

Chapter 10 Decision Support Systems Slide 21 How are DSS different from MIS?

Chapter 10 Decision Support Systems Slide 22 What is an Executive Information System (EIS)?  Information systems that provide top executives, managers, analysts, and other knowledge workers with immediate and easy access to information about a firm’s key factors that are critical to accomplishing an organization’s strategic objectives  Features: Information presented in forms tailored to the preferences of the executives using the system Customizable graphics displays Exception reporting Trend analysis Drill down capability

Chapter 10 Decision Support Systems Slide 23 What is Artificial Intelligence?  A field of science and technology based on disciplines such as computer science, biology, psychology, linguistics, mathematics, and engineering  The goal is to develop computers that can simulate the ability to think, as well as see, hear, walk, talk, and feel

Chapter 10 Decision Support Systems Slide 24 What are the attributes of Intelligent Behavior?  Think and reason  Use reason to solve problems  Learn or understand from experience  Acquire and apply knowledge  Exhibit creativity and imagination  Deal with complex or perplexing situations  Respond quickly and successfully to new situations  Handle ambiguous, incomplete, or erroneous information

Chapter 10 Decision Support Systems Slide 25 How do we know if computer software is artificially intelligent? “An expert system is a computer program that represents and reasons with knowledge of some specialist subject with a view to solving problems or giving advice.” Jackson (1999)  Turing Test A computer program demonstrates artificial intelligence if it can “pass’ as a human (c. 1950) In 1990, the Cambridge Center for Behavioral Studies began offering the $100,000 Loebner Prize to the first program whose responses were indistinguishable from a human’s (No one has ever won)

Chapter 10 Decision Support Systems Slide 26 What are the areas of Artificial Intelligence?

Chapter 10 Decision Support Systems Slide 27 What are cognitive applications?  Systems that focus on researching how the human brain works and how humans think and learn

Chapter 10 Decision Support Systems Slide 28 What is an Expert System?  Expert systems are based on the thinking and behavior patterns of an expert in a specialized area which s/he performs over and over; For typical DSS problems, there are no experts and the tasks are ad-hoc  A knowledge-based information system that uses its knowledge about a specific, complex application to act as an expert consultant to end users

Chapter 10 Decision Support Systems Slide 29 What constitutes an expert?  That is NOT an easy Question!! Some people are generally recognized as experts  To be considered as models for an expert system, they must have some basic characteristics: They must know how they perform the task They must Have the time and ability to explain how they perform They must be Motivated to Cooperate

Chapter 10 Decision Support Systems Slide 30 What are the components of an expert system?  Knowledge Base: facts about specific subject area and heuristics that express the reasoning procedures of an expert  Software Resources: inference engine and other programs refining knowledge and communicating with users Rule/Heuristic Based: Rule: If there is a potato in the tailpipe, the car will not start. Finding: There is a potato in the tailpipe. Conclusion: The car will not start. (Truth preserving inference)

Chapter 10 Decision Support Systems Slide 31 What methods of knowledge representation are there? examples of past performance, occurrences and experiences  Frame-Based: hierarchy or network of entities consisting of a complex package of data values  Case-Based:  Object-Based: data and the methods or processes that act on those data  Rule-Based: rules and statements that typically take the form of a premise and a conclusion

Chapter 10 Decision Support Systems Slide 32 What are the benefits of Expert Systems?  Faster and more consistent than an expert  Can have the knowledge of several experts  Does not get tired or distracted by overwork or stress  Helps preserve and reproduce the knowledge of experts What are the Limitations of Expert Systems?  Limited focus  Inability to learn***  Maintenance problems  Developmental costs  Only as good as the Knowledge Engineer (A professional who works with experts to capture the knowledge they posses) who builds it

Chapter 10 Decision Support Systems Slide 33 What areas are suitable for Expert Systems?

Chapter 10 Decision Support Systems Slide 34 How are DSS different from Expert Systems? Decision Support Systems Expert Systems Based On Expert No Experts Available Based on Logical Reasoning Based on Numerical Analysis System Questions User User Questions System Used FrequentlyUsed for Ad-hoc Problems Final Solution(s) ProvidedOutputs provided based Analysis Very Accurate Unknown Accuracy Multiple Solutions Always the same output Learning PossibleBased on known analytical techniques

Chapter 10 Decision Support Systems Slide 35 What is a fuzzy logic?  A method of reasoning that resembles human reasoning since it allows for approximate values and inferences and incomplete or ambiguous data instead of relying only on crisp data What does ‘good’ mean?

Chapter 10 Decision Support Systems Slide 36 What are genetic algorithms?  Software that uses Darwinian, randomizing, and other mathematical functions to simulate an evolutionary process that can yield increasingly better solutions to a problem  Emulates the concept ‘Survival of the fittest’  Over time, competing algorithms develop certain strengths and thrive; weaker algorithms ‘die’

Chapter 10 Decision Support Systems Slide 37 What is a neural network?  Computing systems modeled after the brain’s mesh-like network of interconnected processing elements, called neurons

Chapter 10 Decision Support Systems Slide 38 What are Knowledge Management Systems?  The use of information technology to help gather, organize, and share business knowledge within an organization

Chapter 10 Decision Support Systems Slide 39 What is an intelligent agent?  A software surrogate for an end user or a process that fulfills a stated need or activity by using built-in/learned knowledge base to make decisions and accomplish tasks in a way that fulfills the intentions of a user 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 Role-Playing: play what-if games and other roles to help users understand information and make better decisions

Chapter 10 Decision Support Systems Slide 40 What Information Management Agents are there? 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

Chapter 10 Decision Support Systems Slide 41 What is Robotics?  Robot machines with computer intelligence and computer controlled, humanlike physical capabilities

Chapter 10 Decision Support Systems Slide 42 What are Natural Interfaces?  Includes natural language, speech recognition, and the development of multi-sensory devices that use a variety of body movements to operate computers

Chapter 10 Decision Support Systems Slide 43 What is virtual reality?  Computer-simulated reality that relies on multi-sensory input/output devices such as a 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

Chapter 10 Decision Support Systems Slide 44 Are there any Questions???