IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 10/26/ Edward de Bono, Creative Thinking Guru “Most executives, many scientists, and almost all business school graduates believe that if you analyze data, this will give you new ideas. Unfortunately, this belief is totally wrong. The mind can only see what it is prepared to see.” Edward de Bono, Creative Thinking Guru Chapter 8 Enhancing Business Intelligence Using Information Systems

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 10/26/2015 Business Intelligence (BI) 8-2 Gather & analyze information from internal/external sources in order to make better business decisions. Used to monitor & control processes from disconnected reports, databases, & spreadsheets BI Continuous Planning Continuously monitor and analyze business processes Results lead to ongoing adjustments Involves decision makers from all levels

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 10/26/2015 TYPES OF INFORMATION SYSTEMS KIND OF SYSTEM GROUPS SERVED EXECUTIVE SENIOR (STRATEGIC) LEVEL (ESS) MANAGERS MANAGEMENT LEVEL MIDDLE (MIS) and (DSS) MANAGERS OPERATIONAL OPERATIONAL LEVEL (TPS) MANAGERS SALES & MANUFACTURING FINANCE ACCOUNTING HUMAN RESOURCESMARKETING

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 10/26/2015 Business Processes Supported by Functional Area Information Systems 8-4

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 10/26/2015 INTERRELATIONSHIPS AMONG SYSTEMS ESS TPS DSSMIS External

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 10/26/2015 Operational Level 8-6 Day-to-day business processes Interactions with customers Information systems used to:  Automate repetitive tasks  Improve efficiency Decisions:  Structured  Recurring  Can often be automated using IS

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 10/26/2015 Managerial Level 8-7 Functional managers  Monitoring and controlling operational-level activities  Providing information to executive level  Midlevel managers  Focus on effectively utilizing and deploying resources  Goal of achieving strategic objectives Managers’ decisions  Semistructured  Contained within business function  Moderately complex  Time horizon of few days to few months

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 10/26/2015 Executive Level 8-8 President, CEO, vice presidents, board of directors Decisions  Long-term strategic issues  Complex and nonroutine problems  Unstructured decisions  Long-term ramifications

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 10/26/2015 Comparison of Decision-Making Levels 8-9 Operational Level Managerial Level Executive Level Who Foreman or supervisorMidlevel managers and functional managers Executive-level managers What Automate routine and repetitive activities Automate the monitoring and controlling of operational activities Aggregate summaries of past organizational data and projections of the future Why Improve organizational efficiency Improve organizational effectiveness Improve organizational strategy and planning IS Transaction Processing Systems (TPS) Management Information Systems (MIS) Executive Information Systems (EIS)

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 10/26/2015 Transaction Processing Systems (TPS) 8-10 Operational level Purpose:  Processing of business events and transactions  Increase efficiency  Automation  Lower costs  Increased speed and accuracy Examples:  Payroll processing  Sales and order processing  Inventory management  Product purchasing, receiving, and shipping  Accounts payable and receivable

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 10/26/2015 Architecture of a TPS Processing  Online  Immediate results  Batch  Transactions collected and processed later  Not needed immediately 8-11

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 10/26/2015 Management Information Systems 8-12 Managerial level Purpose:  Produce reports  Support of midlevel managers’ decisions Examples:  Sales forecasting  Financial management and forecasting  Manufacturing, planning and scheduling  Inventory management and planning  Advertising and product pricing

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 10/26/2015 Business Intelligence Components  Information and Knowledge Discovery  Search for hidden relationships  Hypotheses testing Ad Hoc Queries and Reports  Examples:  Scheduled Reports* Drill-down Reports  Exception Reports* Key-Indicator Reports Online Analytical Processing (OLAP)  Complex, multidimensional analyses of data stores for data mining  OLAP data components: Measures (or facts) —values or numbers the user wants to analyze Categorized data 8-13

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 10/26/2015 Data Mining Association Discovery - Technique used to find correlations Sequence Discovery - Association discovery over time Text mining - Extracting information from text documents  Can be applied to a variety of documents:  Web sites  Transcripts (phone calls, interview, applications) Web Mining - Analyze usage or content of Web pages  Used by Amazon.com to see customer’s usage  Clickstream data—recording of the user’s path through a Web site  Stickiness—ability to attract and keep visitors 8-14

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 10/26/2015 Executive Information Systems 8-15 Aka Executive support system Executive level Purpose:  Aid in executive decision making  Provide information in highly aggregated form Examples:  Executive-level decision making  Long-range and strategic planning  Monitoring of internal and external events and resources  Crisis management  Staffing and labor relations

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 10/26/2015 Decision Support Systems (DSS) 8-16 Decision-making support for recurring problems Used mostly by managerial level employees (can be used at any level) Interactive decision aid What-if analyses  Analyze results for hypothetical changes  Example: Microsoft Excel

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 10/26/2015 Collaboration Technologies 8-17 Increased need for flexible teams Virtual teams—dynamic task forces  Flexible, form and disband as needed  Fluctuating team size Need for new collaboration technologies  Groupware - Enables more effective team work  Disregard for time and place  Asynchronous – Lotus Notes, , Calendaring, newgroups  Synchronous – Electronic Meeting systems Use: brainstorming, strategic planning, focus groups Web-based

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 10/26/2015 Intelligent Systems Artificial intelligence  Simulate human intelligence  Reasoning, learning, seeing, hearing, walking, talking, and feeling  Expert Systems  Rule-based systems  Neural Networks  Approximation of human brain functioning  Training to establish common patterns New data compared to past information  Intelligent agents (bots– software robots)  Program that works in the background  Acts when a specific event occurs 8-18

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 10/26/2015 Knowledge Management Systems 8-19 Generating value from knowledge assets Collection of technology-based systems Knowledge assets  Skills, routines, practices, principles, formulas, methods, heuristics, and intuitions  Used to improve efficiency, effectiveness, & profitability  Documents storing both facts and procedures  Examples: Databases, manuals, diagrams, books, etc. Explicit knowledge - documented Tacit Knowledge – located in one’s mind

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 10/26/2015 Information Visualization 8-20 Application of sophisticated statistical techniques  What-if analyses to support decision making Capabilities can be embedded into a large range of systems  Digital dashboards  Geographic Information Systems  Use geographically referenced information Ex: optimal store locations, target customers