chapter9

CHAPTER 9

Chapter 9 – Enabling the Organization-Decision Making

Decision Making

:)  Reasons for Growth of Decision Making Information System

       - People need to analyze large amounts of information – Improvements in technology itself, innovations in communication, and globalization have resulted in a dramatic increase in the alternatives and                   dimensions people need to consider when making a decision or appraising an opportunity

       - People must make decisions quickly – Time is of the essence and people simply do not have time to               sift through all the information manually

      -  People must apply sophisticated analysis techniques, such as modeling and forecasting, to  make good           decisions – Information systems substantially reduce the time required to perform these sophisticated             analysis techniques

      -  People must protect the corporate asset of organizational information – Information systems offer the              security required to ensure organizational information remains safe.

:)  Model – A simplified representation or abstraction of reality

:)  IT systems in an enterprise

Transaction Processing System

:)  Moving up through the organizational pyramid users move from requiring transactional information to analytical information

:)  Transaction processing system – the basic business system that serves the operational level (analysis) in an organization

:)  Online transaction processing (OLTP) – the capturing of transaction and event information using technology to (1) process the information according to defined business rules, (2) store the information, (3) update existing information to reflect the new information

:)  Online analytical processing (OLAP) – the manipulation of information to create business intelligence in support of strategic decision making

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;

1.       Sensitivity analysis – the study of the impact that changes in one (or more) parts of the model have on other parts of the model

2.       What-if analysis – checks the impact of a change in an assumption on the proposed solution

3.       Goal-seeking analysis – finds the inputs necessary to achieve a goal such as a desired level of outputs

Executive information system

:)  Executive information system (EIS) – A specialized DSS that supports senior level executives within the                                                                  organization

:)  Most EISs offering the following capabilities;

- Consolidation – involves the aggregation of information and features simple roll-ups to complex                                              groupings of interrelated information

- Drill-down – enables users to get details, and details of information

- Slice-and-dice – looks at information from different perspectives

  Interaction between a TPS and an EIS

:) Digital dashboard – integrates information from multiple components and presents it in a united display

                                  Artificial intelligence (AI)

:)  The ultimate goal of AI is the ability to build a system that can mimic human intelligence

:)  Intelligent system – various commercial applications of artificial intelligence

:)  Artificial intelligence (AI) – simulates human intelligence such as the ability to reason and learn

:)  Four most common categories of AI include;

   1.Expert system – computerized advisory programs that imitate the reasoning processes of experts in                                         solving difficult problems

   2. Neural network – attempts to emulate the way the human brain works

                                  o   Fuzzy logic – a mathematical method of handling imprecise or subjective                                                                             information

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

   4. Intelligent agent – special-purposed knowledge-based information system that accomplishes specific                                          tasks on behalf of its users

Data Mining

:)  Data-mining software includes many forms of AI such as neutral networks and expert systems

Accessing Organizational 

Information – Data Warehouse

What is

DATA WAREHOUSE?

History of Data Warehousing

vIn the 1990’s executives became less concerned with the day-to-day business operations and more concerned with overall business functions

vThe data warehouse provided the ability to support decision making without disrupting the day-to-day operations, because:

§Operational information is mainly current – does not include the history for better decision making

§Issue of quality information

vWithout information history, it is difficult to tell how and why things change over time.

Data Warehouse Fundamentals

vData warehouse – a logical collection of information – gathered from many different operational databases – that supports business analysis activities and decision-making tasks

vThe primary purpose of a data warehouse is to combined information throughout an organization into a single repository for decision-making purposes – data warehouse support only analytical processing

Data Warehouse Model

vExtraction, transformation, and loading (ETL) – a process that extracts information from internal and external databases, transforms the information using a common set of enterprise definitions, and loads the information into a data warehouse.

vData warehouse  then send subsets of the information to data mart.

vData mart – contains a subset of data warehouse information

        Multidimensional Analysis
and Data Mining 

vRelational Database contain information in a series of two-dimensional tables.

vIn a data warehouse and data mart, information is multidimensional, it contains layers of columns and rows

§Dimension –

a particular attribute

of information. 

vOnce a cube of information is created, users can begin to slice and dice the cube to drill down into the information.

vUsers can analyze information in a number of different ways and with number of different dimensions.

Multidimensional Analysis
and Data Mining

vData mining – the process of analyzing data to extract information not offered by the raw data alone. Also known as "knowledge discovery" – computer-assisted tools and techniques for sifting through and analyzing vast data stores in order to find trends, patterns, and correlations that can guide decision making and increase understanding.

vTo perform data mining users need data-mining tools

Data-mining tool – uses a variety of techniques to find patterns and relationships in large volumes of information. Eg: retailers can use knowledge of these patterns to improve the placement of items in the layout of a mail-order catalog page or Web page.

 Information Cleansing or Scrubbing 

vAn organization must maintain high-quality data in the data warehouse

vInformation cleansing or scrubbing – a process that weeds out and fixes or discards inconsistent, incorrect, or incomplete information

vOccur during ETL process and second on the information once if is in the data warehouse

Business Intelligence

vBusiness intelligence – refers to applications and technologies that are used to gather, provide access, analyze data, and information to support decision making effort.

vthese systems will illustrate business intelligence in the areas of customer profiling, customer support, market research, market segmentation, product profitability, statistical analysis, and inventory and distribution analysis to name a few

vEg: Excel, Access

CHAPTER 5: ORGANIZATIONAL STRUCTURES THAT SUPPORT STRATEGIC INITIATIVES.

OrGaNiZaTiONaL STrUcTuReS:-

v  Organizational employees must work closely together to develop strategic initiatives that create competitive advantages.

v  Ethics and security are two fundamental building blocks that organizations must base their businesses upon.

InFoRmATiOn TeChNoLoGy RoLeS AnD 

ReSpOnSiBiLiTiEs:-

Ø  Information technology is a relatively new functional area, having only been around formally for around 40 years.

Ø   Recent IT – related strategic positions:

ü  Chief Information Officer (CIO)

ü  Chief Technology Officer (CTO)

ü  Chief Security Officer (CSO)

ü  Chief Privacy Officer (CPO)

ü  Chief Knowledge Officer (CKO)

Ø  Chief Information Officer (CIO) – oversees all uses of IT and ensures the strategic alignment of IT with business goals and objectives.

Ø  Broad CIO functions include;

ü  Manager – ensuring the delivery of all IT projects, on time and within budget.

ü  Leader – ensuring the strategic vision of IT is in line with the strategic vision of the organization.

ü  Communicator – building and maintaining strong executive relationships.

Ø  Average CIO compensation by industry:

Industry	Average CIO Compensation
Wholesale/Retail/Distribution	$ 243,304
Finance	$ 210,547
Insurance	$ 197,697
Manufacturing	$ 190,250
Medical/Dental/Health Care	$ 171,032
Government	$ 118,359
Education	$   93,750

Ø  What concerns CIOs the most:

Percentages %	CIOs Concerns
94	Enhancing customer satisfaction
92	Security
89	Technology evaluation
87	Budgeting
83	Staffing
66	ROI analysis
64	Building new applications
45	Outsourcing hosting

v  Chief Technology Officer (CTO) – responsible for ensuring the throughput , speed, accuracy, availability and reliability of IT.

v  Chief Security Officer (CSO) – responsible for ensuring the security of IT systems.

v  Chief Privacy Officer (CPO) – responsible for ensuring the ethical and legal use of information.

v  Chief Knowledge Officer (CKO) – responsible for collecting, maintaining and distributing the organization’s knowledge.

ThE GaP BeTwEeN BuSiNeSs PeRsOnNeL 

AnD iT PeRsOnNeL:-

Ø  Business personnel possess expertise in functional areas such as marketing, accounting and sales.

Ø  IT personnel have the technological expertise.

Ø  This typically causes a communications gap between the business personnel and IT personnel.

ImPrOvInG CoMmUnIcATiOnS:-

v  Business personnel must seek to increase their understanding of IT.

v  IT personnel must seek to increase their understanding of the business.

v  It is the responsibility of the CIO to ensure effective communication between business personnel and IT personnel.

OrGaNiZaTiOnAL FuNdAmEnTaLs – EtHiCs 

AnD SeCuRiTy:-

ü  Ethics and security are two fundamental building blocks that organizations must base their businesses on to be successful.

ü  In recent years, such event as the 9/11 have shed new light on the meaning of ethics and security.

EtHiCs:- 

v  Ethics – the principles and standards that guide our behavior toward other people.

v  Privacy is a major ethical issues;

v  Privacy – the right to be left alone when you want to be to have control ever your own personnel possessions and not to be observed without your consent.

v  Issues affected by technology advances.

Intelligent property	Intangible creative work that is embodied in physical form
Copyright	The legal protection afforded an expression of an idea, such as a song, video game and some types of proprietary documents
Fair use doctrine	In certain situations, it is legal to use copyrighted material
Pirated software	The unauthorized use, duplication, distribution or sale of copyrighted software
Counterfeit software	Software that is manufactured to lock like the real thing and sold as such

·                      One of the main ingredients in trust is privacy.

·                     Primary reasons privacy issues lost trust for e-business.

1.	Loss of personnel privacy is a top concern for Americans in the 21st century
2.	Among Internet users, 37 percent would be “a lot” more inclined to purchase a product on a websites that had a privacy policy
3.	Privacy/security is the number one factors that would convert Internet researchers into Internet buyers

PrOTeCTiNg InTeLLeCTuAL AsSeTs:-

ü  Organizational information is intellectual capital – it must be protected.

ü  Information security – the protection of information from accidental or intentional misuse by persons inside or outside an organization.

ü  E-business automatically crates tremendous information security risks for organization.