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CHAPTER 11 Managerial Support Systems

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CHAPTER OUTLINE Managers and Decision Making Business Intelligence Systems Data Visualization Technologies Intelligent Systems 2

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How Managers Make Decisions Herbert Simons three-phase process 3

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How Managers Make Decisions (cont.) Rational Managers follow Objective Rationality must know all the alternatives must know all the outcomes must optimize Administrative Decision-Makers follow Bounded Rationality Satisfice Adaptive decision-making 4

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Why Managers Need IT Support Large number of alternatives to be considered Decisions under time pressure and high degree of uncertainty Decisions are more complex Decision makers can be in different locations and so is the information 5

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Business Intelligence (BI) Systems Applications that allow managers to access, consolidate, and analyze vast amounts of data for decision support Multidimensional data analysis Data mining Decision support systems (DSS) Digital Dashboards 6

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How Business Intelligence Works 7

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Data Mining Searching for valuable business information in a large data warehouse. Two basic operations: Predicting trends and behaviors Identifying previously unknown patterns and relationships Example: targeted marketing in CRM 8

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Decision Support Systems (DSSs) Using analytical models to understand relationships between decision variables and outcomes Mathematical models e.g., Linear Programming Statistical models e.g., Regression Analysis Emphasizing interactive problem-solving 9

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Common Analyses in DSS Used to examine alternative scenarios Sensitivity Analysis understand how output variables respond to changes in an input variable What-if Analysis understand how changes in assumptions affect outcome Goal-Seeking Analysis understand what it takes to achieve a preset outcome 10 A Goal-Seeking example

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Digital Dashboards Previously called Executive Information Systems, now no longer limited to executive uses Provide rapid access to summarized as well as detailed information Emphasize graphical support to allow easy interpretation of patterns/trends 11

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Sample Performance Dashboard (Figure 11.4) An Executive Dashboard Demo 12

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Data Visualization Systems Making data easier to understand and use Data Visualization in Action: Visa Operation Center East 13

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Virtual Reality: Flight or Driving Simulator 14

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Geographic Information System Hans RoslingHans Rosling at the TED Talks Example of data visualization: 15

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Intelligent Systems Based on Advances in Artificial Intelligence (AI) Uses s ensors, software and computers Emulates / enhances human capabilities: reasoning, learning, sensing, talking, etc. Expert systems Natural Language Processing Neural networks 16

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Expert Systems (ESs) Codifies human expert knowledge to analyze specific problems within a very narrow domain System asks a series of questions Reasoning based on pattern matching Matching user responses with predefined rules If-then format 17

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Examples of ES Applications Medical Diagnosis Credit Card Fraud Detection Unusually large transaction amounts Unusual usage patterns Device Troubleshooting Quality Control in Auditing 18

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Natural Language Processing Speech (voice) recognition Natural language generation/voice synthesis Natural language understanding 19

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Neural Networks A system of programs and data structures that approximates the operation of the human brain Particularly good at recognizing subtle, hidden and newly emerging patterns within complex data Requires extensive training with past information (learning) 20

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Neural Network 21