1. Information Systems Today: Managing in the Digital World7
COIS WEEK 7
Chapter
Enhancing Business Intelligence Using Information Systems
Use of outdated information systems can be costly. A software glitch at the Tokyo Stock Exchange cost Misuho Securities Co. $US350 million.
Information Systems Today: Managing in the Digital World

2. Information Systems Today: Managing in the Digital World
Learning Objectives
Information Systems Today: Managing in the Digital World

3. Information Systems Today: Managing in the Digital World
Learning Objectives
Information Systems Today: Managing in the Digital World

4. Decision-Making Levels of an Organization
Information Systems Today: Managing in the Digital World

5. Information Systems Today: Managing in the Digital World
Operational Level
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
Information Systems Today: Managing in the Digital World

6. Summary of Characteristics: Operational Level
Information Systems Today: Managing in the Digital World

7. Information Systems Today: Managing in the Digital World
Managerial Level
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
Information Systems Today: Managing in the Digital World

8. Summary of Characteristics: Managerial Level
Information Systems Today: Managing in the Digital World

9. Information Systems Today: Managing in the Digital World
Executive Level
The president, CEO, vice presidents, board of directors
Decisions
Long-term strategic issues
Complex and nonroutine problems
Unstructured decisions
Long-term ramifications
Information Systems Today: Managing in the Digital World

10. Summary of Characteristics: Executive Level
Information Systems Today: Managing in the Digital World

11. Comparison of Decision-Making Levels
Operational Level
Managerial
Level
Executive
Who
Foreman or supervisor
Midlevel 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)
Information Systems Today: Managing in the Digital World

12. Information Systems Today: Managing in the Digital World
Learning Objectives
Information Systems Today: Managing in the Digital World

13. General Types of Information Systems
Input-process-output model
Basic systems model
Payroll system example
Information Systems Today: Managing in the Digital World

14. Transaction Processing System
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
Etc.
Information Systems Today: Managing in the Digital World

15. Information Systems Today: Managing in the Digital World
Architecture of a TPS
Information Systems Today: Managing in the Digital World

16. Architecture of a TPS: Inputs
Source Documents
Different data entry methods
Information Systems Today: Managing in the Digital World

17. Architecture of a TPS: Processing
Online processing
Immediate results
Batch processing
Transactions collected and later processed together
Used when immediate notification not necessary
Information Systems Today: Managing in the Digital World

18. Architecture of a TPS: Outputs
Counts, summary reports
Inputs to other systems
Feedback to systems operator
Information Systems Today: Managing in the Digital World

19. Summary of TPS Characteristics
Information Systems Today: Managing in the Digital World

20. Management Information Systems
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
Etc.
Information Systems Today: Managing in the Digital World

21. Information Systems Today: Managing in the Digital World
Architecture of an MIS
Information Systems Today: Managing in the Digital World

22. Architecture of an MIS: Inputs
TPS data
Internal data
Requests for reports
Information Systems Today: Managing in the Digital World

23. Architecture of an MIS: Processing
Aggregation
Summary
Information Systems Today: Managing in the Digital World

24. Architecture of an MIS: Outputs
Information Systems Today: Managing in the Digital World

25. Summary of MIS Characteristics
Information Systems Today: Managing in the Digital World

26. Executive Information Systems
A.k.a. Executive support systems
Executive level
Purpose
Aid in executive decision-making
Provide information in highly aggregated form
Examples
Monitoring of internal and external events and resources
Crisis management
Etc.
Information Systems Today: Managing in the Digital World

27. Information Systems Today: Managing in the Digital World
Architecture of an EIS
Information Systems Today: Managing in the Digital World

28. Architecture of an EIS: Inputs
Hard data
Facts and numbers
Generated by TPS & MIS
Soft data
Nonanalytical information
Web-based news portals
Customizable
Delivery to different media
Information Systems Today: Managing in the Digital World

29. Architecture of an EIS: Processing
Summarizing
Graphical interpreting
Information Systems Today: Managing in the Digital World

30. Architecture of an EIS: Outputs
Summary reports
Trends
Simulations
Information Systems Today: Managing in the Digital World

31. EIS Output: Digital Dashboards
Presentation of summary information
Information from multiple sources
Ability to drill down if necessary
Information Systems Today: Managing in the Digital World

32. EIS Output: Digital Dashboard (II)
Total employee absenteeism
a) line chart b) drill-down numbers
Information Systems Today: Managing in the Digital World

33. Summary of EIS Characteristics
Information Systems Today: Managing in the Digital World

34. Information Systems Today: Managing in the Digital World
Learning Objectives
Information Systems Today: Managing in the Digital World

35. 7 Information Systems that Span Organizational Boundaries
Information Systems Today: Managing in the Digital World

36. 1. Decision Support Systems
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
E.g., Microsoft Excel
Information Systems Today: Managing in the Digital World

37. Information Systems Today: Managing in the Digital World
Architecture of a DSS
Information Systems Today: Managing in the Digital World

38. Information Systems Today: Managing in the Digital World
Common DSS Models
Information Systems Today: Managing in the Digital World

39. Summary of DSS Characteristics
Information Systems Today: Managing in the Digital World

40. Information Systems Today: Managing in the Digital World
Using DSS to Buy a Car
Selling price – $22,500
Down payment – $2,500
Monthly payment – about $400
Interest rate information from the bank
Information Systems Today: Managing in the Digital World

41. Microsoft Excel: Loan Analysis Template
Calculate
Monthly payment
Total amount paid
Total interest paid
What-if analysis
Change inputs
See the results
Information Systems Today: Managing in the Digital World

42. Information Systems Today: Managing in the Digital World
Loan Analysis Summary
Examine results
Choose best solution for given situation
E.g., based on monthly payment or total interest
Information Systems Today: Managing in the Digital World

43. Information Systems Today: Managing in the Digital World
2. Intelligent Systems
Artificial intelligence
Simulation of human intelligence
Reasoning, learning, sensing, hearing, walking, talking, etc.
Information Systems Today: Managing in the Digital World

44. Example: Artificial Intelligence
Information Systems Today: Managing in the Digital World

45. Information Systems Today: Managing in the Digital World
Intelligent Systems
Intelligent system
Sensors, software and computers
Emulate and enhance human capabilities
Three types
Expert systems
Neural networks
Intelligent agents
Information Systems Today: Managing in the Digital World

46. Information Systems Today: Managing in the Digital World
Expert Systems
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
Information Systems Today: Managing in the Digital World

47. Example: Expert System
Expert system to make a medical recommendation
Information Systems Today: Managing in the Digital World

48. Architecture of an Expert System
Information Systems Today: Managing in the Digital World

49. Summary of ES Characteristics
Information Systems Today: Managing in the Digital World

50. Information Systems Today: Managing in the Digital World
Neural Network System
Approximation of human brain functioning
Training to establish common patterns
Past information
New data compared to patterns
E.g., loan processing
Information Systems Today: Managing in the Digital World

51. Example: Neural Network System
Loan processing system relying on a neural network
Information Systems Today: Managing in the Digital World

52. Intelligent Agent Systems
Program working in the background
Bot (software robot)
Provides service when a specific event occurs
Information Systems Today: Managing in the Digital World

53. Intelligent Agent Types
Buyer agents (shopping bots) – search for best price
User agents – perform a task for the user
Monitoring and sensing agents – keep track of key information
Data-mining agents – analyze large amounts of data
Web crawlers (web spiders) – browse the Web for specific information
Destructive agents – malicious agents designed by spammers
Information Systems Today: Managing in the Digital World

54. 3. Data Mining and Visualization Systems
Application of sophisticated statistical techniques
What-if analyses to support decision making
Capabilities can be embedded into a large range of systems
Information Systems Today: Managing in the Digital World

55. Information Systems Today: Managing in the Digital World
Visualization
Display of complex data relationships using graphical methods
Visualization of a weather system
Information Systems Today: Managing in the Digital World

56. Information Systems Today: Managing in the Digital World
Text Mining
Extraction of information from textual documents
Web crawlers used to extract information from Internet
Information Systems Today: Managing in the Digital World

57. 4. Office Automation Systems
Developing documents, scheduling resources, communicating
Examples
Word processing
Desktop publishing
Electronic calendars
Information Systems Today: Managing in the Digital World

58. Architecture of an Office Automation System
Information Systems Today: Managing in the Digital World

59. Summary of OAS Characteristics
Information Systems Today: Managing in the Digital World

60. 5. Collaboration Technologies
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
Information Systems Today: Managing in the Digital World

61. Information Systems Today: Managing in the Digital World
Video Conferencing
Costs – few thousand dollars to $500,000
Dedicated videoconferencing systems
Located within organizational conference rooms
Highly realistic
Information Systems Today: Managing in the Digital World

62. Desktop Videoconferencing
Low-cost alternative to dedicated videoconferencing
Enablers
Increase in processing power
Internet connection speed
Information Systems Today: Managing in the Digital World

63. Future of Desktop Videoconferencing
Notebook computers with built in video cameras
Microsoft Office RoundTable 2007
360-degree camera
Unified communications software
Built in microphone
Meeting content can be recorded, indexed and stored
Information Systems Today: Managing in the Digital World

64. Information Systems Today: Managing in the Digital World
Groupware
Enables more effective team work
Distinguished along two dimensions
Information Systems Today: Managing in the Digital World

65. Information Systems Today: Managing in the Digital World
Benefits of Groupware
Information Systems Today: Managing in the Digital World

66. Asynchronous Groupware
1989 – Lotus Development released Notes
Lotus Notes still an industry leader
Other tools
, newsgroups, mailing lists, group calendars, collaborative writing tools, etc.
Information Systems Today: Managing in the Digital World

67. Synchronous Groupware
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
Information Systems Today: Managing in the Digital World

68. Example: Electronic Meeting System
Information Systems Today: Managing in the Digital World

69. 6. Knowledge Management Systems
Generating value from knowledge assets
Collection of technology-based systems
Knowledge assets
Skills, routines, practices, principles, formulas, methods, heuristics and intuition
Used to improve efficiency, effectiveness and profitability
Documents storing both facts and procedures
Examples
Databases, manuals, diagrams, books, etc.
Information Systems Today: Managing in the Digital World

70. Benefits and Challenges of Knowledge Based Systems
Information Systems Today: Managing in the Digital World

71. How Organizations Utilize KMS
Successful KMS facilitate the exchange of knowledge
Information Systems Today: Managing in the Digital World

72. Web-Based Knowledge Portals
Knowledge repository
Information Systems Today: Managing in the Digital World

73. 7. Functional Area Information Systems
Cross-organizational-level IS
Support specific functional area
Focus on specific set of activities
Information Systems Today: Managing in the Digital World

74. Business Processes Supported by Functional Area Information Systems
Information Systems Today: Managing in the Digital World

75. Organizational Functions and Representative Information Systems
Information Systems Today: Managing in the Digital World

76. Geographic Information System
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
Information Systems Today: Managing in the Digital World