1. The Strategic Management of Information Technology Chapter 10 Complex Decisions and Artificial Intelligence

2. Transaction Processing System Input Output Process Information Communication Systems Development

3. Process Flow l Process Flow/Elements l Components/Elements l Responsibilities

4. Overview l Business Problems –Complex, less structured l Data –Non-numerical, messy, complex relationship l Artificial Intelligence –Goal is to make computers “think” like humans

5. Specialized Problems l Diagnostic l Speed l Consistency l Training

6. Building Expert Systems l Knowledge Base l Knowledge Engineers l Case-Based Reasoning l Limitations of Expert Systems

7. Expert System l Expert l Symbolic and/or Numeric Knowledge l Knowledge Base l Expert Decisions made by non-experts

8. Decision Support System Compared to Expert System

9. Building Expert Systems l Shell = Tool to Build Expert System l Knowledge Engineer Builds l Cooperative Expert Key l Components: –Knowledge Base –Information Engineer applies rules to new data for each conclusion l Custom Program, Shell, or Pre-packaged

10. Additional Issues to Consider l Pattern Recognition/Neural Nets l Voice and Speech Recognition l Language Comprehension l Massively Parallel Computers l Robotics and Motion l Statistics, Uncertainty, Fuzzy Logic

11. Expert Systems l Goal: Make same decision an expert would make with the same data l Capture and program expert’s knowledge l Advantage of speed and consistency

12. Expert Systems Problem Type l Narrow, well-defined domain l Solutions require an expert l Complex logical processing l Handle missing, ill-structured data l Need a cooperative expert

13. Limitations of Expert Systems l Fragile Systems –Small environment changes can force revision of all of the rules l Mistakes –Who is responsible? l Expert l Multiple Expert l Knowledge Engineer l Company that uses it

14. Limitations of Expert Systems l Vague Rules –Rules can be hard to define l Conflicting Experts –With multiple opinions, who is right? –Can diverse methods be combined?

15. Limitations of Expert Systems l Unforeseen events –Events outside of domain can lead to nonsense decisions –Human experts adapt –Will human novice recognize a nonsense result?

16. AI Research Areas l Computer Science –Parallel Processing –Symbolic Processing –Neural Networks l Robotics Applications –Visual Perception –Tactility –Dexterity –Locomotion and Navigation

17. AI Research Areas l Natural Language –Speech Recognition –Language Translation –Language Comprehension l Cognitive Science –Expert Systems –Learning Systems –Knowledge-Based Systems

18. Neural Networks l Based on brain design l Hardware and software l Recognize patterns –Design specifications –Spiegel Catalogs –Pick stocks

19. Machine Vision l Advantages of Machine Vision –Broader spectrum of light –Will not suffer fatigue –Damage less easy l Literal –Problems less detection than processing

20. Speech Recognition l Voice: primarily ID l Speech –Transcripts –Hands-free operations l Limitations –Need to train –Accents and colds –Synonyms, punctuation, context

21. AI Questions l What is intelligence? l Can machines ever think like humans? l How do humans think? l Do we really want computers to think like us?

22. Other AI Applications l Massively Parallel Processing –only if task can be split into independent pieces –math computation and database searches l Robotics and Motion –welding and painting l Statistics, Unclear, and Fuzzy Logic –use subjective and incomplete description

23. The Future l Intelligent Agents –Learn what you want from what you ask for and go get it for you –Automated personal assistant –Network traffic can be a problem –Agents are independent of one another

24. Product Change Process Change Dynamic Stable Dynamic Mass customization Invention Mass production Continuous improvement Product-Process Change Matrix

25. Product Change Process Change Dynamic Stable Dynamic Mass Production Change conditionsPeriodic/forecastable changes in product market demand and process technology StrategyProduction Key organizational toolStandardized, dedicated production process WorkflowsSerial, linear flow of work, executed to plan Employee rolesSeparate doers and thinkers Control systemCentralized, hierarchical command system I/T alignment challengeAutomation of manual processes to achieve cost justified efficiency enhancement Critical synergyReliance on invention form to supply new product designs and new process tech.; linked with invention forms in single corporate entity Product-process change matrix

26. Product change Process change Dynamic Stable Dynamic Invention Change conditionsConstant/unforecastable changes in product market demand and process technology StrategyProduction of unique or novel product or process Key organization toolSpecialization of creative or high craft skills WorkflowsIndependent work Employee rolesProfessionals and craftspeople Control systemSystem decentralized to specialized individuals and groups I/T alignmentDevelopment and distribution of customized systems Critical synergyMass production form supplied with new processes; operates in market niches too dynamic or small for mass production; sometimes incorporated into single corporate entity with multiproduct mass-production forms Figure 3 Product-process change matrix

27. Product change Process change Dynamic Stable Dynamic Mass Customization Change conditionsConstant/unforecastable changes in market demand; periodic/forcastable changes in process technology StrategyLow cost process differentiation within new markets Key organization toolLoosely coupled networks of modular, flexible processing units WorkflowsCustomer/product unique value chains Employee rolesNetwork coordinator and on-demand processors Control systemHub and web system; centralized network coordination, independent processing control I/T alignmentIntegration of constantly changing network info processing/communication requirements; interoperability, data communication, and coprocessing critical to network efficiency Critical synergyReliance on continuous improvement form for increasing process flexibility within processing units Figure 5 Product-process change matrix

28. Product change Process change Dynamic Stable Dynamic Continuous Improvement Change conditionsConstant/unforecastable changes in process technology, periodic/forecastable changes in market demand StrategyLow cost process differentiation within mature markets Key organization toolSelf-managing/cross-functional teams WorkflowsIntensive and reciprocal workflow within teams Employee rolesDual, combined doers and thinkers Control systemMicrotransformations; rapid and frequent switching between decentralized team decision making and team-managed command systems I/T alignmentDesign of cross-functional info and communication systems that support micro- transformations Critical synergyMass-customization form supplied with flexible new processes; sometimes functions as transition form in re-engineering to mass customization Figure 6 Product-process change matrix

29. PERFORMANCE FOCUSPERFORMANCE FOCUS ORGANIZATIONAL FOCUS New core competence Phase 3 Redefinition Phase 2 Enhancement Transition Barriers Phase 1 Automation Value -added process and services Excellence Efficiency Internal Operations Customer and Supplier interface New Business Units