Decision Support

Systems

c
 ˜earning Objectives

‡ Identify the changes taking place in

the form and use of decision support
in e-business enterprises.

‡ Identify the role and reporting

alternatives of management
information systems.

2
 ˜earning Objectives (continued)

‡ Describe how online analytical

processing can meet key
information needs of managers.

‡ Explain the decision support system

concept and how it differs from
traditional management information
systems.

r
 ˜earning Objectives (continued)

‡ Explain how the following

information systems can support the
information needs of executives,
managers, and business
professionals:
± Executive information systems
± Enterprise information portals
± Enterprise knowledge portals

ð
 ˜earning Objectives (continued)

‡ Identify how neural networks, fuzzy

logic, genetic algorithms, virtual
reality, and intelligent agents can be
used in business.

‡ How can expert systems be used in

business decision-making situations?

Ä
 Section I

‡ Decision Support in Business

v
 ãusiness and Decision Support

‡ To succeed, companies need

information systems that can
support the diverse information and
decision-making needs of their
managers and business
professionals.

(
 ãusiness and Decision Support (continued)

‡ Information, Decisions, &

Management

± The type of information required by

decision makers is directly related to
the level of management and the
amount of structure in the decision
situations.
ãusiness and Decision Support (continued)

È
 ãusiness and Decision Support (continued)

‡ Information Quality
± Timeliness
‡ Provided WHEN it is needed
‡ Up-to-date when it is provided
‡ Provided as often as needed
‡ Provided about past, present, and future
time periods as necessary

c

 ãusiness and Decision Support (continued)

‡ Information Quality (continued)

± Content
‡ Free from errors
‡ Should be related to the information needs of a
specific recipient for a specific situation
‡ Provide all the information that is needed
‡ Only the information that is needed should be
provided
‡ Can have a broad or narrow scope, or an internal
or external focus
‡ Can reveal performance

cc
 ãusiness and Decision Support (continued)

‡ Information Quality (continued)

± Form
‡ Provided in a form that is easy to
understand
‡ Can be provided in detail or summary form
‡ Can be arranged in a predetermined
sequence
‡ Can be presented in narrative, numeric,
graphic, or other forms
‡ Can be provided in hard copy, video, or
other media.

c2
ãusiness and Decision Support (continued)

cr
 ãusiness and Decision Support (continued)

‡ Decision Structure
± Structured decisions
‡ Involve situations where the procedures to
be followed can be specified in advance
± Unstructured decisions
‡ Involve situations where it is not possible
to specify most of the decision procedures
in advance

cð
 ãusiness and Decision Support (continued)

‡ Decision structure (continued)

± Semistructured decisions
‡ Some decision procedures can be
specified in advance, but not enough to
lead to a definite recommended decision

cÄ
 ãusiness and Decision Support (continued)

± Amount of structure is typically tied to

management level
‡ Operational ± more structured
‡ Tactical ± more semistructured
‡ Strategic ± more unstructured

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 Decision Support Trends

‡ The growth of corporate intranets,

extranets and the Web has
accelerated the development and
use of ³executive class´ information
delivery & decision support
software tools to virtually every
level of the organization.

c(
 'anagement Information Systems

‡ The original type of information system

‡ Produces many of the products that
support day-to-day decision-making
‡ These information products typically take
the following forms:
± Periodic scheduled reports
± Exception reports
± Demand reports and responses
± Push reports

c
 'anagement Information Systems (continued)

‡ Management reporting alternatives

± Periodic scheduled reports
‡ Prespecified format
‡ Provided on a scheduled basis
± Exception reports
‡ Produced only when exceptional
conditions occur
‡ Reduces information overload

cÈ
 'anagement Information Systems (continued)

‡ Management reporting alternatives

(continued)
± Demand reports and responses
‡ Available when demanded.
‡ Ad hoc
± Push reports
‡ Information is sent to a networked PC
over the corporate intranet.
‡ Not specifically requested by the recipient

2

 Online Analytical Processing

‡ Enables managers and analysts to

interactively examine & manipulate
large amounts of detailed and
consolidated data from many
perspectives
± Analyze complex relationships to
discover patterns, trends, and
exception conditions
± Real-time
2c
 Online Analytical Processing (continued)

‡ Involves..
± Consolidation
‡ The aggregation of data.
‡ From simple roll-ups to complex
groupings of interrelated data
± Drill-Down
‡ Display detail data that comprise
consolidated data

22
 Online Analytical Processing (continued)

± Slicing and Dicing

‡ The ability to look at the database from
different viewpoints.
‡ When performed along a time axis, helps
analyze trends and find patterns

2r
 Decision Support Systems

‡ Computer-based information systems

that provide interactive information
support during the decision-making
process
‡ DSS¶s use
± Analytical models
± Specialized databases
± The decision maker¶s insights & judgments
± An interactive, computer-based modeling
process to support making semistructured
and unstructured business decisions

2ð
 Decision Support Systems (continued)

‡ Designed to be ad hoc, quick-response

systems that are initiated and controlled
by the decision maker

‡ DSS Models and Software

± Rely on model bases as well as databases
± Might include models and analytical
techniques used to express complex
relationships

2Ä
 Decision Support Systems (continued)

‡ DSS models and software

(continued)
± Can combine model components to
create integrated models in support of
specific types of business decisions

2v
 Decision Support Systems (continued)

‡ Geographic Information & Data

Visualization Systems
± Special categories of DSS that
integrate computer graphics with other
DSS features
± GIS
‡ A DSS that uses geographic databases to
construct and display maps and other
graphics displays

2(
 Decision Support Systems (continued)

‡ Geographic information and data

visualization systems (continued)

± Data visualization systems

‡ Represent complex data using
interactive three-dimensional graphic
forms
‡ Helps discover patterns, links, and
anomalies

2
 :sing Decision Support Systems

‡ An interactive modeling process

‡ Four types of analytical modeling
± What-if analysis
± Sensitivity analysis
± Goal-seeking analysis
± Optimization analysis

2È
 :sing Decision Support Systems (continued)

‡ What-If Analysis
± End user makes changes to variables,
or relationships among variables, and
observes the resulting changes in the
values of other variables

r

 :sing Decision Support Systems (continued)

‡ Sensitivity Analysis
± A special case of what-if analysis
± The value of only one variable is
changed repeatedly, and the resulting
changes on other variables are
observed
± Typically used when there is
uncertainty about the assumptions
made in estimating the value of certain
key variables

rc
 :sing Decision Support Systems (continued)

‡ Goal-Seeking Analysis
± Instead of observing how changes in a
variable affect other variables, goal-
seeking sets a target value (a goal) for
a variable, then repeatedly changes
other variables until the target value is
achieved

r2
 :sing Decision Support Systems (continued)

‡ Optimization Analysis
± A more complex extension of goal-
seeking
± The goal is to find the optimum value
for one or more target variables, given
certain constraints

rr
 :sing Decision Support Systems (continued)

‡ Data Mining for Decision Support

± Software analyzes vast amounts of
data
± Attempts to discover patterns, trends, &
correlations
± May perform regression, decision tree,
neural network, cluster detection, or
market basket analysis

rð
 = ecutive Information Systems

‡ EIS¶s combine many of the features

of MIS and DSS
‡ Originally intended to provide top
executives with immediate, easy
access to information about the
firm¶s ³critical success factors´
‡ Alternative names
± Enterprise information systems
± Executive support systems

rÄ
 = ecutive Information Systems (continued)

‡ Features of an EIS
± Information presented in forms tailored
to the preferences of the users
± Most stress use of graphical user
interface and graphics displays
± May also include exception reporting
and trend analysis

rv
 =nterprise Portals and Decision Support

‡ A Web-based interface and

integration of intranet and other
technologies that gives all intranet
users and selected extranet users
access to a variety of internal &
external business applications and
services

r(
 =nterprise Portals and Decision Support
(continued)

‡ Business benefits
± More specific and selective information
± Easy access to key corporate intranet
website resources
± Industry and business news
± Access to company data for
stakeholders
± Less time spent on unproductive
surfing
r
 6nowledge 'anagement Systems

‡ IT that helps gather, organize, and share

business knowledge within an
organization
‡ Hypermedia databases that store and
disseminate business knowledge. May
also be called knowledge bases
‡ Best practices, policies, business
solutions
‡ Entered through the enterprise
knowledge portal

rÈ
 Section II

‡ Artificial Intelligence Technologies

in Business

ð

 ãusiness and AI

‡ ³Designed to leverage the

capabilities of humans rather than
replace them,«AI technology
enables an extraordinary array of
applications that forge new
connections among people,
computers, knowledge, and the
physical world.´

ðc
 Artificial Intelligence

‡ A field of science and technology based

on disciplines such as computer science,
biology, psychology, linguistics,
mathematics, & engineering
‡ Goal is to develop computers that can
think, see, hear, walk, talk, and feel
‡ Major thrust ± development of computer
functions normally associated with
human intelligence ± reasoning, learning,
problem solving

ð2
Artificial Intelligence (continued)

‡ Domains of AI
± Three major areas
‡ Cognitive science
‡ Robotics
‡ Natural interfaces

ðr
 Artificial Intelligence (continued)

‡ Cognitive science
± Focuses on researching how the
human brain works & how humans
think and learn
± Applications
‡ Expert systems
‡ Adaptive learning systems
‡ Fuzzy logic systems
‡ Neural networks
‡ Intelligent agents

ðð
 Artificial Intelligence (continued)

‡ Robotics
± Produces robot machines with computer
intelligence and computer controlled,
humanlike physical capabilities
‡ Natural interfaces
± Natural language and speech recognition
± Talking to a computer and having it
understand
± Virtual reality

ðÄ
 eural etworks

‡ Computing systems modeled after

the brain¶s mesh like network of
interconnected processing
elements, called neurons
‡ Goal ± the neural network learns
from data it processes

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 uzzy ˜ogic Systems

‡ A method of reasoning that resembles

human reasoning
‡ Allows for approximate values and
inferences
‡ Allows for incomplete or ambiguous data
‡ Allows ³fuzzy´ systems to process
incomplete data and provide approximate,
but acceptable, solutions to problems

ð(
 ýenetic Algorithms

‡ Uses Darwinian, randomizing, &

other mathematical functions to
simulate an evolutionary process
that can yield increasingly better
solutions
‡ Especially useful for situations in
which thousands of solutions are
possible & must be evaluated

ð
 irtual Reality

‡ Computer-simulated reality
‡ Relies on multi-sensory input/output
devices
‡ Allows interaction with computer-
simulated objects, entities, and
environments in three dimensions

ðÈ
 Intelligent Agents

‡ A ³software surrogate´ for an end

user or a process that fulfills a
stated need or activity
‡ Uses built-in and learned
knowledge base about a person or
process to make decisions and
accomplish tasks

Ä

 = pert Systems

‡ A knowledge-based information system

that uses its knowledge about a specific,
complex application area to act as an
expert consultant

‡ Provides answers to questions in a very

specific problem area

‡ Must be able to explain reasoning

process and conclusions to the user

Äc
 = pert Systems (continued)

‡ Components
± Knowledge base
± Software resources
‡ Knowledge base
± Contains
» Facts about a specific subject area
» Heuristics that express the reasoning
procedures of an expert on the subject

Ä2
 = pert Systems (continued)

‡ Software Resources
± Contains an inference engine and other
programs for refining knowledge and
communicating
» Inference engine processes the
knowledge, and makes associations and
inferences
» User interface programs, including an
explanation program, allows
communication with user

Är
 Developing = pert Systems

‡ Begin with an expert system shell

‡ Add the knowledge base

‡ Built by a ³knowledge engineer´

± Works with experts to capture their
knowledge
± Works with domain experts to build
the expert system

Äð
The alue of = pert Systems

ÄÄ
 The alue of = pert Systems (continued)

‡ Benefits
± Can outperform a single human expert in
many problem situations
± Helps preserve and reproduce knowledge of
experts

‡ Limitations
± Limited focus, inability to learn, maintenance
problems, developmental costs

Äv
 Discussion Questions

‡ Is the form and use of information

and decision support in e-business
changing and expanding?

‡ Has the growth of self-directed

teams to manage work in
organizations changed the need for
strategic, tactical, and operational
decision making in business?
Ä(
 Discussion Questions (continued)

‡ What is the difference between the ability

of a manager to retrieve information
instantly on demand using an MIS and
the capabilities provided by a DSS?

‡ In what ways does using an electronic

spreadsheet package provide you with
the capabilities of a decision support
system?

Ä
 Discussion Questions (continued)

‡ Are enterprise information portals

making executive information
systems unnecessary?

‡ Can computers think? Will they

EVER be able to?

ÄÈ
 Discussion Questions (continued)

‡ What are some of the most important

applications of AI in business?

‡ What are some of the limitations or

dangers you see in the use of AI
technologies such as expert systems,
virtual reality, and intelligent agents?
What could be done to minimize such
effects?

v

 References

‡ James A. O'Brien; George M. Marakas.

Management Information Systems:
Managing Information Technology in the
Business Enterprise vth Ed., Boston:
McGraw-Hill/ Irwin,2

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