1. CHAPTER TWO OVERVIEW SECTION 2.1 - DECISION-MAKING SYSTEMS
Transaction Processing Systems
Decision Support Systems
Executive Information Systems
SECTION 2.2 – BUSINESS PROCESSES
Understanding the Importance of Business Processes
Business Process Improvement
Business Process Reengineering
Business Process Modeling
Business Process Management

2. DECISION MAKING
Model – a simplified representation or abstraction of reality
IT systems in
an enterprise

3. TRANSACTION PROCESSING SYSTEMS
Moving up users move from requiring transactional information to analytical information

4. DECISION SUPPORT SYSTEMS
Decision support system (DSS) – models information to support managers and business professionals during the decision-making process
Three quantitative models used by DSSs include:
Sensitivity analysis
What-if analysis
Goal-seeking analysis

5. EXECUTIVE INFORMATION SYSTEMS
Executive information system (EIS) – a specialized DSS that supports senior level executives within the organization
Most EISs offering the following capabilities:
Consolidation; Drill-down ; Slice-and-dice
Digital dashboard – a common feature of EIS that integrates information from multiple components

6. ARTIFICIAL INTELLIGENCE (AI)
Artificial intelligence (AI) – simulates human intelligence such as the ability to reason and learn
Four most common categories of AI include:
Expert system
Neural Network
Genetic algorithm
Intelligent agent
Data-mining systems sift instantly through information to uncover patterns and relationships, and include many forms of AI such as neural networks and expert systems

7. UNDERSTANDING THE IMPORTANCE OF BUSINESS PROCESS
Business process – a standardized set of activities that accomplish a specific task, such as processing a customer’s order
Customer facing process - results in a product or service that is received by an organization’s external customer
Business facing process - invisible to the external customer but essential to the effective management of the business

8. BUSINESS PROCESS IMPROVEMENT
Business process improvement model

9. BUSINESS PROCESS REENGINEERING
Business process reengineering (BPR) - analysis and redesign of workflow within and between enterprises

10. BUSINESS PROCESS MODELING
Business process modeling (or mapping) - the activity of creating a detailed flow chart or process map of a work process showing its inputs, tasks, and activities, in a structured sequence
Business process model - a graphic description of a process, showing the sequence of process tasks, which is developed for a specific
As-Is process model
To-Be process model

11. BUSINESS PROCESS MANAGEMENT
Business process management (BPM) - integrates all of an organization’s business process to make individual processes more efficient

12. DECISION SUPPORT & ARTIFICIAL INTELLIGENCE
Brainpower for Your Business
Business Information to Business Intelligence
It is replacing human brainpower to a limited degree

13. INTRODUCTION
Computer-aided decision support

14. DECISIONS, DECISIONS, DECISIONS
Phases of decision making (Simon’s Model)
Intelligence – find or recognize a problem, need, or opportunity
Design – consider possible ways of solving the problem
Choice – weigh the merits of each solution
Implementation – carry out the solution

15. Types of Decisions You Face
Structured decision – processing a certain information in a specified way so that you will always get the right answer
Semi Structured decisions – Partially structured, Models are used to assist in making decisions
Nonstructured decision – one for which there may be several “right” answers, without a sure way to get the right answer

16. Types of Decisions You Face
Recurring decision – one that happens repeatedly
Nonrecurring (ad hoc) decision – one you make infrequently

17. DECISION SUPPORT SYSTEMS
Decision support system (DSS) – a highly flexible and interactive system that is designed to support decision making when the problem is not structured
Decision support systems help you analyze, but you must know how to solve the problem, and how to use the results of the analysis

18. Components of a DSS
Model management component – consists of both the DSS models and the model management system
Data management component – stores and maintains the information that you want your DSS to use
User interface management component – allows you to communicate with the DSS

19. Decision Support Systems
Using Decision Support
What-if Analysis
Sensitivity Analysis
Goal-Seeking Analysis
Optimization Analysis
Continue the discussion of DSS explaining the goals cited in the onscreen points.

20. GEOGRAPHIC INFORMATION SYSTEMS
Geographic information system (GIS) – DSS designed specifically to analyze spatial information
Spatial information is any information in map form
Businesses use GIS software to analyze information, generate business intelligence, and make decisions
San Francisco Police Beat system was the first DSS That used GIS to allocate officers based on crime statistics

21. ARTIFICIAL INTELLIGENCE
Artificial intelligence (AI) – the science of making machines imitate human thinking and behavior
Robot – a mechanical device equipped with simulated human senses and the ability to take action on its own

22. ARTIFICIAL INTELLIGENCE
Types of AI systems used in business
Expert systems
Neural networks
Genetic algorithms
Intelligent agents
AI systems deliver the conclusion (rather than helping you analyze the options)

23. EXPERT SYSTEMS
Expert (knowledge-based) system – an artificial intelligence system that applies reasoning capabilities to reach a conclusion (used extensively in business)
Used for
Diagnostic problems (what’s wrong?)
Prescriptive problems (what to do?)
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24. What Expert Systems Can and Can’t Do
An expert system can
Reduce errors
Improve customer service
Reduce cost
An expert system can’t
Use common sense
Automate all processes

25. An Example

26. NEURAL NETWORKS AND FUZZY LOGIC
Neural network (artificial neural network or ANN) – an artificial intelligence system that is capable of finding and differentiating patterns

27. Layers of a Neural Network

28. Neural Networks Can…
Learn and adjust to new circumstances on their own
Take part in massive parallel processing
Function without complete information
Cope with huge volumes of information
Analyze nonlinear relationships

29. Fuzzy Logic
Fuzzy logic – a mathematical method of handling imprecise or subjective information
Used to make ambiguous information such as “short” usable in computer systems
Applications
Google’s search engine
Washing machines
Antilock breaks

30. GENETIC ALGORITHMS
Genetic algorithm – an artificial intelligence system that mimics the evolutionary, survival-of-the-fittest process to generate increasingly better solutions to a problem

31. INTELLIGENT AGENTS
Intelligent agent – software that assists you, or acts on your behalf, in performing repetitive computer- related tasks
Types
Information agents
Monitoring-and-surveillance or predictive agents
Data-mining agents
User or personal agents

32. Information Agents
Information Agents – intelligent agents that search for information of some kind and bring it back
Ex: Buyer agent or shopping bot – an intelligent agent on a Web site that helps you, the customer, find products and services you want

33. Monitoring-and-Surveillance Agents
Monitoring-and-surveillance (predictive) agents – intelligent agents that constantly observe and report on some entity of interest, a network, or manufacturing equipment, for example

34. Data-Mining Agents
Data-mining agent – operates in a data warehouse discovering information

35. User Agents
User or personal agent – intelligent agent that takes action on your behalf
Examples:
Prioritize
Act as gaming partner
Assemble customized news reports
Fill out forms for you
“Discuss” topics with you
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36. MULTI-AGENT SYSTEMS AND AGENT-BASED MODELING
Biomimicry – learning from ecosystems and adapting their characteristics to human and organizational situations
Used to
Learn how people-based systems behave
Predict how they will behave under certain circumstances
Improve human systems to make them more efficient and effective
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© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

37. Agent-Based Modeling
Agent-based modeling – a way of simulating human organizations using multiple intelligent agents, each of which follows a set of simple rules and can adapt to changing conditions
Multi-agent system – groups of intelligent agents have the ability to work independently and to interact with each other
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© 2007 The McGraw-Hill Companies, Inc. All rights reserved.