1. 10.1 © 2007 by Prentice Hall 10 Chapter Improving Decision Making and Managing Knowledge

2. 10.2 © 2007 by Prentice Hall STUDENT OBJECTIVES Essentials of Business Information Systems Chapter 10 Improving Decision Making and Managing Knowledge Compare different types of decisions and describe the decision-making process. Evaluate the role of information systems in helping people working individually and in groups make decisions more effectively. Evaluate the business benefits of using intelligent techniques in decision making and knowledge management.

3. 10.3 © 2007 by Prentice Hall STUDENT OBJECTIVES Define and describe the types of systems used for enterprise-wide knowledge management and demonstrate how they provide value for businesses. Define and describe the major types of knowledge work systems and demonstrate how they provide value for firms. Essentials of Business Information Systems Chapter 10 Improving Decision Making and Managing Knowledge

4. 10.4 © 2007 by Prentice Hall Procter & Gamble Restructures Its Supply Chain Problem: Cost pressures, complex supply chain. Solutions: Deploy modeling and optimization software to maximize return on investment and predict the most successful supply chain. Modeling software fueled with data from Oracle data warehouse improved efficiency and reduced costs. Demonstrates IT’s role in restructuring a supply chain. Illustrates digital technology improving decision making through information systems. Essentials of Business Information Systems Chapter 10 Improving Decision Making and Managing Knowledge

5. 10.5 © 2007 by Prentice Hall Decision Making and Information Systems Business Value of Improved Decision Making Measuring the value of improved decision making Identifying key decisions that may benefit from new system investments that could improve decision making Decisions may be common, routine, and numerous Value of improving multitudes of small decisions that may not provide much value as single decisions Essentials of Business Information Systems Chapter 10 Improving Decision Making and Managing Knowledge

6. 10.6 © 2007 by Prentice Hall Types of Decisions Decision Making and Information Systems Essentials of Business Information Systems Chapter 10 Improving Decision Making and Managing Knowledge Unstructured Structured Semistructured

7. 10.7 © 2007 by Prentice Hall Essentials of Business Information Systems Chapter 10 Improving Decision Making and Managing Knowledge Figure 10-1 Senior managers, middle managers, operational managers, and employees have different types of decisions and information requirements. Information Requirements of Key Decision-Making Groups in a Firm Decision Making and Information Systems

8. 10.8 © 2007 by Prentice Hall The Decision-Making Process Decision Making and Information Systems Essentials of Business Information Systems Chapter 10 Improving Decision Making and Managing Knowledge Intelligence Design Choice Implementation

9. 10.9 © 2007 by Prentice Hall Decision Making and Information Systems Essentials of Business Information Systems Chapter 10 Improving Decision Making and Managing Knowledge Figure 10-2 The decision-making process can be broken down into four stages. Stages in Decision Making

10. 10.10 © 2007 by Prentice Hall Quality of Decisions and Decision Making Decision Making and Information Systems Essentials of Business Information Systems Chapter 10 Improving Decision Making and Managing Knowledge Accuracy Comprehensiveness Fairness Speed (efficiency) Coherence Due process

11. 10.11 © 2007 by Prentice Hall Systems and Technologies for Supporting Decisions Decision Making and Information Systems Essentials of Business Information Systems Chapter 10 Improving Decision Making and Managing Knowledge Management information systems (MIS) Decision-support systems (DSS) Executive support systems (ESS) Group-decision support systems (GDSS) Intelligent techniques

12. 10.12 © 2007 by Prentice Hall Management Information Systems (MIS) Systems for Decision Support Essentials of Business Information Systems Chapter 10 Improving Decision Making and Managing Knowledge Help managers monitor and control a business Produce regular reports on performance, such as monthly or annual sales Sometimes highlight exceptional conditions Reports often available online

13. 10.13 © 2007 by Prentice Hall Decision-Support Systems (DSS) Support semistructured and unstructured problem analysis Model-driven “What-if” analysis Data-driven Online analytical processing (OLAP) Systems for Decision Support Essentials of Business Information Systems Chapter 10 Improving Decision Making and Managing Knowledge

14. 10.14 © 2007 by Prentice Hall Components of DSS Systems for Decision Support Essentials of Business Information Systems Chapter 10 Improving Decision Making and Managing Knowledge DSS database DSS software system Models Sensitivity analysis DSS user interface

15. 10.15 © 2007 by Prentice Hall Examples of DSS Systems for Decision Support Essentials of Business Information Systems Chapter 10 Improving Decision Making and Managing Knowledge Burlington Coat Factory: DSS for pricing decisions Parkway Corporation: DSS for asset utilization Compass Bank: DSS for customer relationship management

16. 10.16 © 2007 by Prentice Hall Data Visualization and Geographic Information Systems (GIS) Systems for Decision Support Essentials of Business Information Systems Chapter 10 Improving Decision Making and Managing Knowledge Data visualization tools present data in graphical form to help users see patterns and relationships in large quantities of data Geographic information systems (GIS) use data visualization technology to analyze and display data in the form of digitized maps GIS support decisions that require knowledge about the geographic distribution of people or other resources

17. 10.17 © 2007 by Prentice Hall Systems for Decision Support Essentials of Business Information Systems Chapter 10 Improving Decision Making and Managing Knowledge Bermuda’s High-Tech Rat Trap Read the Focus on Technology and then discuss the following questions: What was the problem facing the island of Bermuda? What was the business impact of the problem? How did the GIS solve the problem? Was it a good solution? Describe the technology involved in the solution. Do you think there was room for improvement on any aspect of the solution? What else might have been done?

18. 10.18 © 2007 by Prentice Hall Systems for Decision Support Essentials of Business Information Systems Chapter 10 Improving Decision Making and Managing Knowledge Interactive Session: GIS What other kinds of problems can you think of that could be solved using geographic information systems? How would GIS technology provide a solution in your example? Are there any disadvantages or negative consequences of GIS technology? What are they?

19. 10.19 © 2007 by Prentice Hall Web-Based Customer Decision-Support Systems (CDSS) Systems for Decision Support Essentials of Business Information Systems Chapter 10 Improving Decision Making and Managing Knowledge Interactivity and personalization Intensity of information Customer decision-support systems assist customers in the decision-making process Search engines, intelligent agents, online catalogs, Web directories, newsgroups, e-mail, etc.

20. 10.20 © 2007 by Prentice Hall Executive Support Systems (ESS) Give senior executives a picture of the overall performance of an organization Enable an executive to zoom in on details or zoom out for a broader view Drill down capability Digital dashboard Systems for Decision Support Essentials of Business Information Systems Chapter 10 Improving Decision Making and Managing Knowledge

21. 10.21 © 2007 by Prentice Hall Group Decision-Support Systems (GDSS) Interactive, computer-based systems that facilitates solving of unstructured problems by a set of decision makers Used in conference rooms with special hardware and software Support increased meeting sizes with increased productivity Systems for Decision Support Essentials of Business Information Systems Chapter 10 Improving Decision Making and Managing Knowledge

22. 10.22 © 2007 by Prentice Hall Artificial intelligence (AI) Expert systems Knowledge base Inference engine Knowledge engineer Case-based reasoning Fuzzy logic systems Neural networks Genetic algorithms Intelligent agents Intelligent Systems for Decision Support Essentials of Business Information Systems Chapter 10 Improving Decision Making and Managing Knowledge

23. 10.23 © 2007 by Prentice Hall Essentials of Business Information Systems Chapter 10 Improving Decision Making and Managing Knowledge Figure 10-11 Intelligent agents are helping Procter & Gamble shorten the replenishment cycles for products, such as a box of Tide. Intelligent Agents in P&G’s Supply Chain Network Intelligent Systems for Decision Support

24. 10.24 © 2007 by Prentice Hall Structured knowledge systems Semistructured knowledge systems Knowledge network systems Portals, collaboration tools, and learning management systems Enterprise-Wide Knowledge Management Systems Systems for Managing Knowledge Essentials of Business Information Systems Chapter 10 Improving Decision Making and Managing Knowledge Knowledge management: business processes developed for creating, storing, transferring, and applying knowledge

25. 10.25 © 2007 by Prentice Hall Stikeman Elliott Computerizes Its Brainpower Read the Focus on Organizations and then discuss the following questions: What are the problems and challenges that a law firm such as Stikeman Elliott faces? What solutions are available to solve these problems? How did implementing Hummingbird address these problems? How successful was the solution? Did Stikeman Elliott choose the best alternative? Systems for Managing Knowledge Essentials of Business Information Systems Chapter 10 Improving Decision Making and Managing Knowledge

26. 10.26 © 2007 by Prentice Hall Interactive Session: Stikeman Elliott Systems for Managing Knowledge Essentials of Business Information Systems Chapter 10 Improving Decision Making and Managing Knowledge Present an example of a knowledge management system that you encounter in your everyday life Describe the type of knowledge in the system and who uses it How does this system increase the value of the knowledge it manages? What are the benefits of the system to the user? How could the system be improved?

27. 10.27 © 2007 by Prentice Hall Knowledge Work Systems (KWS) Systems for Managing Knowledge Essentials of Business Information Systems Chapter 10 Improving Decision Making and Managing Knowledge Requirements of knowledge work systems Examples of knowledge work systems Computer-aided design (CAD) systems Virtual reality systems Virtual Reality Modeling Language (VRML) Investment workstations