1. © 2005 Prentice Hall, Decision Support Systems and Intelligent Systems, 7th Edition, Turban, Aronson, and Liang 1-1 Chapter 1 Management Support Systems: An Overview Turban, Aronson, and Liang Decision Support Systems and Intelligent Systems, Seventh Edition

2. © 2005 Prentice Hall, Decision Support Systems and Intelligent Systems, 7th Edition, Turban, Aronson, and Liang 1-2 Learning Objectives Understand how management uses computer technologies. Learn basic concepts of decision-making. Understands decision support systems. Recognize different types of decision support systems used in the workplace. Determine which type of decision support system is applicable in specific situations. Learn what role the Web has played in the development of these systems.

3. © 2005 Prentice Hall, Decision Support Systems and Intelligent Systems, 7th Edition, Turban, Aronson, and Liang 1-3 Data Warehouse:  The physical repository where relational data are specially organized to provide enterprise-wide, cleaned data in a standardized format.  A relational database specially organized to provide data for easy access Data Mining: The activity of looking for very specific, detailed, but unknown information in databases. A search for valuable yet difficult to find data. Formerly called data dipping Business Intelligence (BI): The use of analytical methods, either manually or automatically, to derive relationships from data. See business analytical, data-mining, decision-support systems, online analytical processing (OLAP).

4. © 2005 Prentice Hall, Decision Support Systems and Intelligent Systems, 7th Edition, Turban, Aronson, and Liang 1-4 Transaction Processing System (TPS): The system that processes an organization’s routine, repetitive, basic transactions such as ordering, billing, or paying Customer Relationship Management (CRM): An organizational initiative whose objective is to properly deliver various services to customers, ranging from Web- based call centers to loyalty program, such as rewarding frequent fliers. Decision Support System (DSS): Computer ‑ based information systems that combine data and models to solve non-structured problems with extensive user involvement through a friendly user interface

5. 5 Managers and Decision Making: Why Computerized Support? Competition Speed The MANAGERS are always responsible for decision making Decision Support Systems and Intelligent Systems, Efraim Turban and Jay E. Aronson, 6th edition. Copyright 2001, Prentice Hall, Upper Saddle River, NJ

6. © 2005 Prentice Hall, Decision Support Systems and Intelligent Systems, 7th Edition, Turban, Aronson, and Liang 1-6 Mintzberg’s 10 Management Roles Interpersonal –Figurehead : symbolic head –Leader : Responsible for the motivation and activation of subordinates; responsible for staffing, training, and associated duties. –Liaison: Maintains self-developed network of outside contact and informers who provide favors and information. Informational –Monitor :Seeks and receives a wide variety of special information (much of it current) to develop a thorough understanding of the organization and environment. –Disseminator: Transmits information received from outsiders or from subordinates to members of the organization. –Spokesperson: Transmits information to outsiders on the organization’s plans, policies, actions, results and so forth; serves as an expert on the organization’s industry

7. © 2005 Prentice Hall, Decision Support Systems and Intelligent Systems, 7th Edition, Turban, Aronson, and Liang 1-7 Decisional –Entrepreneur: Searches the organization and its environment for opportunities and initiates improvement projects to bring about change; supervises deign of certain projects –Disturbance Handler: Responsible for corrective action when the organization faces important, unexpected disturbances –Resource Allocation: Responsible for the allocation of organization resources of all kinds –Negotiator: Responsible for representing the organization at major negotiations

8. © 2005 Prentice Hall, Decision Support Systems and Intelligent Systems, 7th Edition, Turban, Aronson, and Liang 1-8

9. 9 Managerial Decision Making and Information Systems Management is a process by which organizational goals are achieved through the use of resources Resources: Inputs Goal Attainment: Output Measuring Success: Productivity = Outputs / Inputs Decision Support Systems and Intelligent Systems, Efraim Turban and Jay E. Aronson, 6th edition. Copyright 2001, Prentice Hall, Upper Saddle River, NJ

10. © 2005 Prentice Hall, Decision Support Systems and Intelligent Systems, 7th Edition, Turban, Aronson, and Liang 1-10 Productivity The ratio of outputs to inputs that measures the degree of success of an organization and its individual parts

11. © 2005 Prentice Hall, Decision Support Systems and Intelligent Systems, 7th Edition, Turban, Aronson, and Liang 1-11 Factors Affecting Decision-Making New technologies and better information distribution have resulted in more alternatives for management. Complex operations have increased the costs of errors, causing a chain reaction throughout the organization. Rapidly changing global economies and markets are producing greater uncertainty and requiring faster response in order to maintain competitive advantages. Increasing governmental regulation coupled with political destabilization have caused great uncertainty.

12. © 2005 Prentice Hall, Decision Support Systems and Intelligent Systems, 7th Edition, Turban, Aronson, and Liang 1-12

13. © 2005 Prentice Hall, Decision Support Systems and Intelligent Systems, 7th Edition, Turban, Aronson, and Liang 1-13 What do Decision Support Systems Offer? Quick computations at a lower cost Group collaboration and communication Increased productivity Ready access to information stored in multiple databases and data warehouse (ex. Large data warehouse like the one operated by Wal-Mart, contain petabytes of data special methods and sometimes parallel computing are needed to organize and search the data) Ability to analyze multiple alternatives and apply risk management Enterprise resource management Tools to obtain and maintain competitive advantage – (p10)

14. © 2005 Prentice Hall, Decision Support Systems and Intelligent Systems, 7th Edition, Turban, Aronson, and Liang 1-14 Cognitive Limits The human mind has limited processing and storage capabilities. Any single person is therefore limited in their decision making abilities. Collaboration with others allows for a wider range of possible answers, but will often be faced with communications problems. Computers improve the coordination of these activities. This knowledge sharing is enhanced through the use of GSS (Group Support System), KMS (Knowledge Management System), and EIS (Enterprise Information System).

15. © 2005 Prentice Hall, Decision Support Systems and Intelligent Systems, 7th Edition, Turban, Aronson, and Liang 1-15 For example, many of us are hit daily with a barrage of e-mail. Intelligent agents ( a type of artificial intelligence) as part of e-mail client system can effectively filter out the undesired e-mail messages.

16. © 2005 Prentice Hall, Decision Support Systems and Intelligent Systems, 7th Edition, Turban, Aronson, and Liang 1-16 Management Support Systems (MSS) The support of management tasks by the application of technologies –Sometimes called Decision Support Systems or Business Intelligence

17. © 2005 Prentice Hall, Decision Support Systems and Intelligent Systems, 7th Edition, Turban, Aronson, and Liang 1-17 Management Support Systems Tools Decision Support System (DSS) Management Science (MS/ operations research (OR) Business Analytics Data Mining Data Warehouse Business Intelligence Online Analytical Processing (OLAP) Computer-Assisted Systems Engineering (CASE) tools Group Support Systems (GSS) Enterprise Information systems (EIS) Enterprise Information Portals (EIP) Enterprise Resource Management (ERM) Enterprise Resource Planning (ERP) Customer Resource Management (CRM) Supply-Chain Management (SCM) Knowledge Management Systems (KMS) Knowledge Management Portals (KMP) Expert systems (ES) Artificial Neural Network (ANN) Intelligent Agents E-commerce DSS

18. 18 Three Phase Decision-making Process (Simon) Intelligence--searching for conditions that call for decisions Design--inventing, developing, and analyzing possible courses of action Choice--selecting a course of action from those available Decision Support Systems and Intelligent Systems, Efraim Turban and Jay E. Aronson, 6th edition. Copyright 2001, Prentice Hall, Upper Saddle River, NJ

19. © 2005 Prentice Hall, Decision Support Systems and Intelligent Systems, 7th Edition, Turban, Aronson, and Liang 1-19 Decision Support Frameworks A structured decision (Programmed) is one in which the phases of the decision-making process (intelligence: Searching for conditions that call for decisions. Design: Inventing, developing and analyzing possible courses of action. and choice: Selecting a course of action from those available.) have standardized procedures, clear objectives, and clearly specified input and output. There exists a procedure for arriving at the best solution.(SIMON’S Idea) An unstructured decision (Unprogrammed) is one where not all of the decision-making phases are structured and human plays an important role. (SIMON’S Idea) A semistructured decision has some, but not all, structured phases where standardized procedures may be used in combination with individual judgment. By intuition Gorry and Scott Morton

20. © 2005 Prentice Hall, Decision Support Systems and Intelligent Systems, 7th Edition, Turban, Aronson, and Liang 1-20 Decision Support Frameworks Based on Simon’s Idea Type of Control Type of Decision: Operational ControlManagerial Control Strategic Planning Structured (Programmed) Accounts receivable, accounts payable, order entry Budget analysis, short-term forecasting, personnel reports Investments, warehouse locations, distribution centers SemistructuredProduction scheduling, inventory control Credit evaluation, budget preparation, project scheduling, rewards systems Mergers and acquisitions, new product planning, compensation, QA, HR policy planning Unstructured (Unprogrammed) Buying software, approving loans, help desk Negotiations, recruitment, hardware purchasing R&D planning( Research And Development ), technology development, social responsibility plans

21. © 2005 Prentice Hall, Decision Support Systems and Intelligent Systems, 7th Edition, Turban, Aronson, and Liang 1-21 Technologies for Decision-Making Processes Type of DecisionTechnology Support Needed Structured (Programmed) MIS, Management Science Models, Transaction Processing SemistructuredDSS, KMS, GSS, CRM, SCM Unstructured (Unprogrammed) GSS, KMS, ES, Neural networks

22. © 2005 Prentice Hall, Decision Support Systems and Intelligent Systems, 7th Edition, Turban, Aronson, and Liang 1-22 Technology Support Based on Anthony’s Taxonomy Type of Control Operational Control Managerial Control Strategic Planning Technology Support Needed MIS, Management Science Management Science, DSS, ES, EIS, SCM, CRM, GSS, SCM GSS, CRM, EIS, ES, neural networks, KMS Strategic Planning: Defines long-range goals and policies for resource allocation Managerial Control: The acquisition and efficient use of resource in the accomplishment of organizational goals. Operational Control: The efficient and effective execution of specific tasks

23. © 2005 Prentice Hall, Decision Support Systems and Intelligent Systems, 7th Edition, Turban, Aronson, and Liang 1-23

24. © 2005 Prentice Hall, Decision Support Systems and Intelligent Systems, 7th Edition, Turban, Aronson, and Liang 1-24 Management Science/Operations Research Adopts systematic approach 1.Define problem (a decision situation that may deal with some difficulty or with an opportunity) 2.Classify into standard category 3.Construct mathematical model that describes the real-word problem 4.Evaluate alternative solutions 5.Select solution

25. Turban, Aronson, Liang Sauter 25 Enterprise Information Systems Evolved from Executive Information Systems combined with Web technologies EIPs view information across entire organizations Provide rapid access to detailed information through drill-down. Provide user-friendly interfaces through portals. Identifies opportunities and threats

26. Turban, Aronson, Liang Sauter 26 Enterprise Information Systems Specialized systems include ERM/ERP, CRM, and SCM Provides timely and effective corporate level tracking and control. Filter, compress, and track critical data and information.

27. © 2005 Prentice Hall, Decision Support Systems and Intelligent Systems, 7th Edition, Turban, Aronson, and Liang 1-27 Knowledge Management Systems Knowledge that is organized and stored in a repository for use by an organization Can be used to solve similar or identical problems in the future

28. Turban, Aronson, Liang Sauter 28 Issues in Knowledge Management Systems Where to find knowledge How to classify it How to ensure its quality How to store it How to maintain it How to use it Motivate people to contribute their knowledge People who leave the organization take their knowledge with them

29. KMS Application: Xerox Experience Problem: With decreasing demand for copying, Xerox strugled to survive the digital revolution. Solution Method: Developed an intranet based knowledge repository in 1996 to support sales people to quickly answer customers’ queries. Result: Days of investigations have decreased to a few minutes. Implications: –Questions and solutions are indexed to easily retrieve information in the latter requests. So the system improves itself. –Accumulated knowledge is analyzed to learn the products strenghts, weaknesses, customer trends, etc. Challenges in organizational culture change: –Persuade people to share knowledge. –Learn to use intranet and KMS. Turban, Aronson, Liang Sauter 29

30. Turban, Aronson, Liang Sauter 30 Expert Systems Decison makers ask for expert opinions! ES Attempts to mimic human experts’ problem solving Uses technologies that apply reasoning methodologies in a specific domain Examples include: –Artificial Intelligence Systems –Artificial Neural Networks (neural computing) –Genetic Algorithms –Fuzzy Logic –Intelligent Agents Most ES software is implemented on the web tools (java applets), installed on web servers and use web browsers for interfaces. Ex: Corvid Exsys

31. Turban, Aronson, Liang Sauter 31 Group Support Systems Getting people at one place is expensive and time consuming Time limitation to give the decision Traditional meetings last long Systems that provide interaction and communication between people with the aid of IT are called collaborative computing systems, groupware systems, electronic systems, or simply GSS Videoconferencing, audioconferencing, voting, document sharing, etc..

32. © 2005 Prentice Hall, Decision Support Systems and Intelligent Systems, 7th Edition, Turban, Aronson, and Liang 1-32 Hybrid Support Systems Integration of different computer system tools to resolve problems Tools perform different tasks, but support each other Together, produce more sophisticated answers Work together to produce smarter answers

33. © 2005 Prentice Hall, Decision Support Systems and Intelligent Systems, 7th Edition, Turban, Aronson, and Liang 1-33 Why is it important to collect data on customers? customer data is important because customer preferences are not uniform. How do DSS technologies (data mining, data warehouse, customer resource management, etc.) help managers identify customer profiles and their profit ? DSS technology enables organizations to store and analyze vast amounts of information quickly. It enables managers to meet services with individual customer needs.

34. © 2005 Prentice Hall, Decision Support Systems and Intelligent Systems, 7th Edition, Turban, Aronson, and Liang 1-34 List and define the three phases of the decision-making process (according to Simon). Simon's three phases of the decision ‑ making process are: intelligence, where conditions that call for decisions are identified; design, where possible courses of action are invented, developed, and analyzed; and choice, where a course of action is selected.

35. © 2005 Prentice Hall, Decision Support Systems and Intelligent Systems, 7th Edition, Turban, Aronson, and Liang 1-35 Define DSS. Decision Support Systems are computer ‑ based information systems that use data and models to support un-structured decisions made by managers.

36. © 2005 Prentice Hall, Decision Support Systems and Intelligent Systems, 7th Edition, Turban, Aronson, and Liang 1-36 There are four major characteristics of DSS. These are: 1)It uses data and models. 2)It is used to assist managers when they solve semistructured or unstructured problems. 3)It is used to support the manager; it does not replace the manager. 4)Its goal is to support the effectiveness of decisions.

37. © 2005 Prentice Hall, Decision Support Systems and Intelligent Systems, 7th Edition, Turban, Aronson, and Liang 1-37 The major benefits provided by DSS include: 1)It may provide solutions for problems that cannot be solved by other methods. 2)It performs a thorough, quantitative analysis in a very short time. 3)It exposes the user to new insights, and these can be used as learning tools.

38. © 2005 Prentice Hall, Decision Support Systems and Intelligent Systems, 7th Edition, Turban, Aronson, and Liang 1-38 4)It facilitates communication and improves teamwork. 5)It allows increased control and may improve performance. 6)It can reduce or eliminate the cost of wrong decisions. 7)It provides consistent and objective decisions. 8)It frees managers for more important tasks because they are able to perform tasks in less time and with less effort.

39. © 2005 Prentice Hall, Decision Support Systems and Intelligent Systems, 7th Edition, Turban, Aronson, and Liang 1-39 Define management science. Management science is a quantitative field that utilizes a scientific approach to decision-making. It involves: 1) defining the problem, 2) classifying the problem, 3) constructing an appropriate mathematical model, 4) finding and evaluating potential solutions, and 5) choosing a solution.