1. 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 7 Organizational Information Systems Business Intelligence Using 7-1 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

2. 1. Describe the concept of business intelligence and how it is used at the operational, managerial, and executive levels of an organization. 2. Explain the three components of business intelligence: information and knowledge discovery, business analytics, and information visualization. 7-2 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

3. 1. Describe the concept of business intelligence and how it is used at the operational, managerial, and executive levels of an organization. 2. Explain the three components of business intelligence: information and knowledge discovery, business analytics, and information visualization. 7-3 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

4.  Business Intelligence (BI) is the use of information systems to gather and analyze information from internal and external sources in order to make better business decisions.  BI is used to monitor and control processes from disconnected: ◦ Reports ◦ Databases ◦ Spreadsheets 7-4 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

5.  Today’s environment makes this necessary ◦ Includes:  Unstable markets  Global threats  Fierce competition  Short product life cycles  Wider choices for consumers 7-5 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

6.  Organizations continuously monitor and analyze business processes  Results lead to ongoing adjustments  Involves decision makers from all levels 7-6 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

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8.  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 7-8 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

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10.  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 7- 10 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

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12.  The president, CEO, vice presidents, board of directors  Decisions ◦ Long-term strategic issues ◦ Complex and nonroutine problems ◦ Unstructured decisions ◦ Long-term ramifications 7- 12 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

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14. 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) 7- 14 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

15.  Input-process-output model ◦ Basic systems model ◦ Payroll system example 7- 15 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

16.  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 7- 16 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

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18.  Source Documents ◦ Papers or electronic describe specific business transaction ◦ Different data entry methods 7- 18 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

19.  Online processing ◦ Immediate results  Batch processing ◦ Transactions collected and later processed together ◦ Used when immediate notification not necessary 7- 19 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

20.  Counts, summary reports  Inputs to other systems  Feedback to systems operator 7- 20 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

21. 1. Describe the concept of business intelligence and how it is used at the operational, managerial, and executive levels of an organization. 2. Explain the three components of business intelligence: information and knowledge discovery, business analytics, and information visualization. 7- 21 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

22.  Information and Knowledge Discovery ◦ Search for hidden relationships ◦ Hypotheses are tested against existing data; e.g., customers with a household income over $150,000 are twice as likely to respond to our marketing campaign as customers with an income of $60,000 or less  Ad Hoc Queries and Reports ◦ There are several types of reports  Scheduled Reports  Drill-down Reports  Exception Reports  Key-Indicator Reports 7- 22 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

23.  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 ◦ Dimensions  Provide a way to summarize data  Example: Sales (Measure) could be analyzed by product, or quarter (both Dimensions) 7- 23 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

24.  OLAP can reduce the complexity of the data to be analyzed ◦ Called Data Reduction  Multiple dimensions visualized in an OLAP cube 7- 24 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

25.  Slicing and dicing of data allows for analyzing subsets of the dimensions. 7- 25 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

26.  Technique used to find correlations  Sequence Discovery ◦ Association discovery over time 7- 26 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

27.  Extracting information from textual documents  Can be applied to a variety of documents: ◦ Web sites ◦ Transcripts  Phone calls  Interviews  Student College Applications 7- 27 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

28.  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 7- 28 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

29.  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 7- 29 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

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32.  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 7- 32 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

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34.  Hard data ◦ Facts and numbers ◦ Generated by TPS & MIS  Soft data ◦ Nonanalytical information ◦ Web-based news portals  Customizable  Delivery to different media 7-34 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

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37.  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 7-37 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

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41.  Cross-organizational-level IS  Support specific functional area  Focus on specific set of activities 7-41 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

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43.  Increased need for flexible teams  Virtual teams—dynamic task forces ◦ Forming and disbanding as needed ◦ Fluctuating team size ◦ Easy, flexible access to other team members  Need for new collaboration technologies 7-43 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

44.  Class of software Enables more effective team work ◦ Distinguished along two dimensions  TIME  PLACE 7- 44 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

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46.  1989—Lotus Development released Notes  Lotus Notes still an industry leader  Other tools ◦ E-mail, newsgroups, and mailing lists, work flow automation systems, intranets, group calendars, and collaborative writing tools. 7-46 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

47.  Electronic meeting systems ◦ Help groups have better meetings  Uses of EMS ◦ Strategic planning sessions ◦ Marketing focus groups ◦ Brainstorming sessions ◦ Business process management ◦ Quality improvement  Web-based implementations 7- 47 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

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49.  Low-cost alternative to dedicated videoconferencing  Web cam  Enablers ◦ Increase in processing power ◦ Internet connection speed 7- 49 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

50.  Artificial intelligence  Simulation of human intelligence  Reasoning and learning, as well as gaining sensing capabilities, such as seeing, hearing, walking, talking, and feeling 7- 50 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

51. Source: http://world.honda.com/ASIMO. 7- 51 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

52.  Intelligent system ◦ Comprised of sensors, software and computers ◦ Emulate and enhance human capabilities  Three types ◦ Expert systems ◦ Neural networks ◦ Intelligent agents 7-52 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

53.  Use reasoning methods  Manipulate knowledge rather than information  System asks series of questions  Inferencing/pattern matching ◦ Matching user responses with predefined rules ◦ If-then format  Fuzzy logic ◦ Represent rules using approximations 7- 53 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

54.  WebMD.com’s expert system to make a medical recommendati on 7- 54 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

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57.  Approximation of human brain functioning  Training to establish common patterns ◦ Past information  New data compared to patterns  Example: loan processing 7- 57 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

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59.  Program working in the background  Bot (software robot)  Provides service when a specific event occurs 7- 59 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

60.  User Agents ◦ Performs a task for the user  Buyer Agents (Shopping Bots) ◦ Searches for the best price  Monitoring and Sensing Agents ◦ Keep track of information and notifies users when it changes  Data-Mining Agents ◦ Continuously browse data warehouses to detect changes  Web crawlers (aka Web spiders) ◦ Continuously browses the Web  Destructive Agents ◦ Designed to farm e-mail addresses or deposit spyware 7- 60 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

61.  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, and profitability ◦ Documents storing both facts and procedures  Examples:  Databases, manuals, diagrams, books, and so on 7- 61 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

62.  Explicit Knowledge ◦ Can be documented  Tacit ◦ Located in one’s mind 7- 62 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

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64. Knowledge repository 7- 64 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

65.  Display of complex data relationships using Variety of graphical methods  Application of sophisticated statistical techniques ◦ What-if analyses to support decision making  Capabilities can be embedded into a large range of systems 7-65 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

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68.  Use of geographically referenced information ◦ Finding optimal location for a new store ◦ Identification of areas too wet to fertilize (see figure) ◦ Locating target customers ◦ Infrastructure design 7-68 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

69.  Customer dot mapping  Trade area analysis  Thematic mapping 7-69 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

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71.  Founded in 1995  74 million users  Sales of $116 billion, United States (2007)  Problems ◦ Shill bidding ◦ Senders who don’t send 7- 71 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

72.  The Church of Scientology attacked by anonymous hacker  Attack was due to retribution for the church removing Tom Cruise interviews on the Web  An innocent party in California was targeted by accident ◦ Phone number posted online ◦ Social security number posted online ◦ Threatening phone call 7- 72 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

73.  56% of 17-34 aren’t watching TV on TV  Online recording and DVR are the media of choice  The broadcast industry needs to respond 7- 73 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

74.  RFID tags ◦ Latest in technological tracking devices ◦ Information imprinted on a tag ◦ Tag generates signature signal ◦ Special RFID reader interprets signal  Use of RFID tags ◦ Pharmaceutical industry  Tracking of medication from factory to pharmacy ◦ Retail businesses 7- 74 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

75.  Disadvantages of using public IM ◦ Security cannot be assumed ◦ Data resides on the provider’s server ◦ Access to the network cannot be blocked  IM protocols for organization’s own IM network ◦ Secure message transfer ◦ Ability to handle thousands of employee accounts ◦ Platform compatibility ◦ Access from outside of the WAN ◦ Proper access rights  IM hosting service—third alternative ◦ Data still resides on provider’s server—privacy concerns 7- 75 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

76.  Turning the Mobile Phone into a personal assistant ◦ Magitti  Combines time of day, location, past behaviors, and text messages to suggest activities ◦ MIT Lab has similar projects ◦ iPhone has apps coming 7- 76 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

77.  Warnock and Geschke worked at the famed Xerox Palo Alto Research Center (PARC) together  Developed PostScript ◦ Technology that simplifies printing documents directly from computers  Geschke was kidnapped in 1992  Adobe is one of the biggest software companies in the world  Products include: ◦ Acrobat ◦ ColdFusion ◦ Dreamweaver ◦ Flash ◦ Photoshop, and many others 7- 77 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World

78.  Healthcare more reliant on information technology ◦ Doctor’s have PDA / laptops now  Patient records are electronic ◦ Google and Microsoft are players in this space  Tele-medicine more and more prevalent ◦ Surgery can now be performed in remote locations 7- 78 Dr. Ali Zolait - Information Systems Today: Managing in the Digital World