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Managerial Support Systems

MIS 503 Management Information Systems

MBA Program

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Information Requirements by Management Level

StrategicManagement

TacticalManagement

OperationalManagement

Decis

ions

Information

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Structured vs. Semi-Structured

• For each decision you make, the decision will fall into one of the following categories:– Structured Decisions– Unstructured – Semi-Structured

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Structured Decisions

• Often called “programmed decisions” because they are routine and there are usually specific policies, procedures, or actions that can be identified to help make the decision– “This is how we usually solve this type of

problem”

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Unstructured Decisions

• Decision scenarios that often involve new or unique problems and the individual has little or no programmatic or routine procedure for addressing the problem or making a decision

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The Role of the Decision Maker• Decision makers can be

– Individuals– Teams– Groups– Organizations

• All of these types of decision makers will differ in their knowledge and experience; therefore, there will be differences in how they will react to a given problem scenario

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The Decision Making Process

• Regardless of the type of decision maker, all decisions involve the following steps– Intelligence – Design– Choice – Implementation

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How can IT be used to support decision makers?

• By supporting various individual and team activities and roles:– Communication and team interaction– The assimilation and filtering of data– Assist with problem recognition– Assist with problem solving– Putting together the results into a cohesive package

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Types of Managerial Support Systems and Applications

• Decision Support Systems– Geographic Information Systems (GIS)– Data Mining– Group Support Systems

• Business Intelligence Systems• Knowledge Management Systems• Artificial Intelligence• Expert Systems• Neural Networks• Virtual Reality

DECISION SUPPORT SYSTEMS

• Designed to assist decision makers with unstructured problems

• Usually interactive• Incorporates data and

models• Data often comes from

transaction processing systems or data warehouse

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DECISION SUPPORT SYSTEMS

Three major components

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Decision Support Systems (DSS)DSS can be classified as– data-oriented

• provide tools for the manipulation and analysis of data

– model-based• generally have some kind of mathematical model of the decision

being supported

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So, how do decision support systems benefit decision makers?• Supplements the decision maker

• Allows improved intelligence, decision, and choice activities

• Facilitates problem solving

• Provides assistance with non-structures decisions

• Assists with knowledge management

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Spatial DSS: A Geographic Information System

• A geographic information system (GIS) is a computer-based information system that provides tools to collect, integrate, manage, analyze, model, and display data that is referenced to an accurate cartographic representation of objects in space.

(Mennecke, Dangermond, Santoro, Darling, & Crossland, 1995).

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Location Based Services

• Location-based services incorporate information about the user's location into the provision of products or services. These include…– Locator services (e.g., where’s the closest ATM?)– Navigation systems (e.g., in the car or on your PC)– M-commerce applications (e.g., proximity alerts,

closest service, mobile advertizing)

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GIS Examples

• Online:– www.MapQuest.com – Maps.google.com

• Desktop– ArcGIS by ESRI– MS MapPoint 2004

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GISs – systems based on manipulation of relationships in space that use geographic data

GEOGRAPHIC INFORMATION SYSTEMS

– Early GIS users:

• Natural resource management• Public administration• NASA and the military• Urban planning• Forestry• Map makers

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Business Adopts Geographic Technologies

GEOGRAPHIC INFORMATION SYSTEMS

– Business uses:• Determining site locations• Market analysis and planning• Logistics and routing• Environmental engineering• Geographic pattern analysis

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(Reprinted courtesy of Environmental Systems Research Institute, Inc. Copyright © 2003 Environmental Systems Research Institute, Inc. All rights reserved.)

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• Approaches to representing spatial data:

– Raster-based – rely on dividing space into small, uniform cells (rasters) in a grid

– Vector-based GISs – associate features in the landscape with a point, line, or polygon

– Geodatabase model – uses object-oriented data concepts

What’s Behind Geographic Technologies

GEOGRAPHIC INFORMATION SYSTEMS

GEOGRAPHIC INFORMATION SYSTEMS

Coverage model uses different layers to represent similar types of geographic features in the same area

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• Questions geographic analysis can answer:

– What is adjacent to this feature?

– Which site is the nearest one?

– What is contained within this area?

– Which features does this element cross?

– How many features are within a certain distance of a site?

What’s Behind Geographic Technologies

GEOGRAPHIC INFORMATION SYSTEMS

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DATA MINING

– Data mining software:• Oracle 9i Data Mining and Oracle Data Mining Suite• SAS Enterprise Miner• IBM Intelligent Miner Modeling• Angoss Software’s KnowledgeSEEKER, Knowledge Studio,

and KnowledgeExcelerator• Datamation’s Data Mining and Business Intelligence Product

Data Mining – uses different technologies to search for (mine) “nuggets” of information from data stored in a data warehouse

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– Decision techniques used:• Decision trees• Linear and logistic regression• Clustering for market segmentation• Rule induction• Nearest neighbor• Genetic algorithms

DATA MINING

• Uses:– Cross-selling– Customer churn– Customer retention– Direct marketing– Fraud detection– Interactive marketing– Market basket analysis– Market segmentation– Payment or default analysis– Trend analysis

DATA MINING

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• Type of DSS to support a group rather than an individual

• Specialized type of groupware• Attempt to make group meetings more

productive• Now focus on supporting team in all its

endeavors, including “different time, different place” mode – virtual teams

GROUP SUPPORT SYSTEMS

Middle managers spend 35%, and top managers

spend 50-80% of time in meetings!

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GROUP SUPPORT SYSTEMSTraditional “same time, same place” meeting layoutTraditional “same time, same place” meeting layout

Executive Information Systems (EIS)/ Business Intelligence Systems

– Hands-on tool that focuses, filters, and organizes information so that an executive can make more effective use of it

– User base for EISs has expanded to encompass all levels of management• Today also called performance management software

– Focus on competitive information…

today referred to as business intelligence systems

Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Executive Information Systems/ Business Intelligence Systems

- Delivers online current information about business conditions in aggregate form

- Filtered and summarized transaction data

- Competitive information, assessments and insights

- Easily accessible to senior executives and other managers

- Designed to be used without intermediary assistance

- Uses state-of-the-art graphics, communications and data storage methods

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Executive Information Systems/ Business Intelligence Systems

• Executive Dashboard from Qualitech Solutions

• Oracle Enterprise performance Management Systems

• SAP Business Objects Strategy Management

• SAS/EIS

• Symphony RPM from Symphony Metreo

• IBM Cognos Business Intelligence

• MicroStrategy Intelligence Server

• Oracle Business Intelligence Suite

• SAP Business Objects BI solutions

• SAS Business Intelligence

• Infor PM

Commercial EIS software

Executive DashboardSAP Business ObjectsSAS/EIS

Symphony MetreoInfor PM

Executive DashboardSAP Business ObjectsSAS/EIS

Symphony MetreoInfor PM

Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

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Executive Information Systems/ Business Intelligence Systems

• “Dashboard” layout for data representation:

Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

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Artificial Intelligence

• Artificial intelligence systems include the people, procedures, hardware, software, data and knowledge to develop computer systems and machines that demonstrate characteristics of intelligence.

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Intelligent Systems • Turing’s test for Artificial Intelligence (AI)

– place a computer and a human in two separate rooms

– an interviewer in a third room, who cannot see the human or the computer user, asks questions that are passed to the computer and to the human

– if the interviewer cannot tell the difference between the answers from the computer and the human, the machine is said to exhibit intelligent behavior

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AI Versus Traditional Programs

• AI programs manipulate symbols or rules rather than numbers

• AI programs are generally non-algorithmic often employing heuristics or rules of thumb

• Many AI programs are concerned with pattern recognition

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• Six areas:• Natural languages• Robotics• Perceptive systems • Genetic programming • Expert systems • Neural networks

AI – the study of how to make computers do things that are currently done better by people

ARTIFICIAL INTELLIGENCE

Most relevant for managerial support 40

• Six areas:• Natural languages• Robotics• Perceptive systems • Genetic programming • Expert systems • Neural networks

AI – the study of how to make computers do things that are currently done better by people

ARTIFICIAL INTELLIGENCE

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Expert systems – attempt to capture the expertise of humans in a computer program

EXPERT SYSTEMS

• Knowledge engineer: – A specially trained systems analyst who works

closely with one or more experts in the area of study

– Tries to learn about how experts make decisions

– Loads information (what learned) into module called knowledge base

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EXPERT SYSTEMS

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• Standford University’s MYCIN – to diagnose and prescribe treatment for meningitis and blood diseases

• General Electric’s CATS-1 to diagnose mechanical problems in diesel locomotives

• AT&T’s ACE to locate faults in telephone cables• Market Surveillance software – to detect insider trading • FAST software – for credit analysis, used by banking

industry• Nestle Food’s developed system to provide employees

information on pension fund status

EXPERT SYSTEMSExamples of Expert Systems

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Neural networks – attempt to tease out meaningful patterns from vast amounts of data

• Process:1. Program given set of data2. Program analyzed data, works out correlations, selects

variables to create patterns3. Pattern used to predict outcomes, then results compared to

known results4. Program changes pattern by adjusting variable weights or

variables themselves5. Repeats process over and over to adjust pattern6. When no further adjustment possible, ready to be used to

make predictions for future cases

NEURAL NETWORKS

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NEURAL NETWORKS

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Neural Networks• Two Types:

– Biological neural networks– Artificial neural networks

• The most popular type of artificial NN are used to classify input into different categories

• A neural network has to be first trained by presenting it with past cases– After training the network can be used for

classification

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Intelligent Agents

• An agent is a piece of software that performs a task for its owner – involves AI combined with networks– applications for intelligent agents have

been for consumer tasks like shopping and providing recommendations based on profile matches

KNOWLEDGE MANAGEMENT SYSTEMS

What is Knowledge management (KM)?

– Practices to manage Organizational knowledge

– Strategies and processes for identifying, creating, capturing, organizing, transferring, and leveraging knowledge held by individuals and the firm

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Data is turned into information, but the decision maker also needs Knowledge to make decisions

• Types of knowledge:– Descriptive Knowledge– Procedural Knowledge– Reasoning Knowledge

• Forms of Knowledge – Tacit Knowledge– Explicit Knowledge

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Examples of technologies that can support or enhance the transformation of knowledge

(IBM Systems Journal) Tacit to Tacit Tacit to Explicit

E-meetings Answering questions

Synchronous collaboration (chat) Annotation

Explicit to Tacit Explicit to Explicit

Visualization Text search

Browsable video/audio of presentations

Document categorization

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Knowledge Management Tools

• Text and Forms management• Database and Reporting management• Spreadsheet, Solvers and Charts

management• Programming management.• Rules management

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VIRTUAL REALITYVirtual reality – use of a computer-based system to create an environment that seems real to one or more senses of users

Non-entertainment uses of VR:- Training - Design- Marketing- Meetings- Social Collaborations

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Training U.S. Army to train tank crews

Amoco for training its drivers

Duracell for training factory workers on using new equipment

Design Design of automobiles

Walk-throughs of air conditioning/ furnace units

Marketing Interactive 3-D images of products (used on the Web)

Virtual tours used by real estate companies or resort hotels

VIRTUAL REALITY

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VIRTUAL REALITY

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ENTERPRISE RESOURCE PLANNING (ERP) SYSTEMS

Enterprise Resource Planning (ERP) Systems

• Set of integrated business applications (modules) that carry out common business functions- Transaction data accessible to workers in multiple functional units (sales + accounting

+…)

• Process-oriented way of doing business- Not separate systems for separate functions

- Support for “Order fulfillment,” not just Sales

• Usually purchased from a software vendor

• ERP = “First wave” of enterprise system packages“Later waves” of enterprise system packages

- Customer relationship management (CRM)

- Supply chain management (SCM) systems

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CUSTOMERS

ProductionProcurement Distribution

MaterialsManagement modules

Production/Operations modules

Sales/Distribution modules

Financials/Accounting modules

Human Resources modules

SUPPLIERS

3 Modules for Value-Chain Activities

2 Modules for Enterprise Support Activities

By mid-1990s, SAP and other vendors designed “suites” of integrated modules for “back-office” transaction processing that eliminated the need for many custom-developed interfaces

• Suite from one vendor OR “best of breed” from multiple vendors

• Some organizations implement Enterprise Support modules only ( Financials, HR)

• Value-Chain module implementations involve large investment of money and people resources because of impact on business

• Have become “essential” systems in many industries

Source: Gartner Dataquest

SAP BUSINESS SUITE

Today’s vendors offer modules beyond the “back-office” modules

FinancialsFinancial Supply Chain ManagementFinancial AccountingManagement AccountingTreasury Applications

Human Capital ManagementTalent ManagementWorkforce Process ManagementWorkforce Deployment

OperationsProcurementInventory and Warehouse ManagementInbound and Outbound LogisticsTransportation ManagementProduction PlanningManufacturing ExecutionProduct DevelopmentLife-Cycle Data ManagementSales Order ManagementAftermarket Sales and ServiceProfessional-Service Delivery

Corporate ServicesReal Estate ManagementEnterprise Asset ManagementProject and Portfolio ManagementTravel ManagementEnvironment, Health, and Safety ManagementQuality ManagementGlobal Trade Services

End-User Service DeliveryManager PortalEmployee PortalEmployee Interaction Support Center

AnalyticsFinancial Analytics Operations AnalyticsWorkforce Analytics

Figure 5.6 Key Functional Areas of SAP ERP

• Support for Cross-Functional processes - Modules were designed to support business processes that involved

multiple business functions and multiple geographic locations

• Access to Integrated Data via a unified platform- Data entered into one module could be accessed in real-time by other

modules, by employees in dispersed business units, if a single centralized database is implemented.

• Support for Global Transactions - National currencies are automatically converted to the parent firm’s currency- Employees in different countries can see the same screen in their own

languages

ERP Business Benefits