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Business Driven Information Systems e9

Chapter TWO:<br>Digital Transformation: Decisions, Processes, & Artificial Intelligence<br>PPTX

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Business Driven Information Systems e9

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  1. CHAPTER twoDigital transformation: decisions, processes, and artificial intelligence © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.

  2. CHAPTER TWO OVERVIEW • SECTION 2.1 – Decision Support Systems • Making Organizational Business Decisions • Measuring Organizational Business Decisions • Using M͏I͏S to Make Business Decisions • SECTION 2.2 – Digital Transformation: Business Process and Artificial Intelligence • Managing Business Processes • Using M͏I͏S to Improve Business Processes • Using AI to Make Business Decisions and Drive Digital Transformation

  3. SECTION 2.1: DECISION SUPPORT SYSTEMS

  4. LEARNING OUTCOMES 1 • Explain the importance of decision making for managers at each of the three primary organization levels along with the associated decision characteristics • Define critical success factors (CSF’s) and key performance indicators (KPI’s), and explain how managers use them to measure the success of M͏I͏S projects • Classify the different operational, managerial, and strategic support systems, and explain how managers can use them to make decisions & gain competitive advantage

  5. MAKING ORGANIZATIONAL BUSINESS DECISIONS • Access the text alternative for slide images.

  6. THE DECISION-MAKING PROCESS • The Six-step Decision-making Process • Access the text alternative for slide images.

  7. DECISION-MAKING LEVELS • Organizational Decision-Making Levels • Access the text alternative for slide images.

  8. OPERATIONAL DECISION-MAKING LEVELS • Operational level –Employees develop, control, and maintain core business activities required to run the day-to-day operations • Operational decisions – Affect how the firm is run from day to day • Structured decisions –Situations where established processes offer potential solutions OPERATIONAL

  9. Managerial DECISION-MAKING levels • Managerial level –Employees evaluate company operations to identify, adapt to, and leverage change • Managerial decisions –These concern how the organization should achieve the goals and objectives set by its strategy • Semistructured decisions –Occur in situations in which a few established processes help to evaluate potential solutions, but not enough to lead to a definite recommended decision MANAGERIAL

  10. Strategic DECISION-MAKING levels • Strategic level – Managers develop overall strategies, goals, and objectives • Strategic decisions – Involve higher-level issues concerned with the overall direction of the organization • Unstructured decisions –Occurs in situations in which no procedures or rules exist to guide decision makers toward the correct choice STRATEGIC

  11. MEASURING ORGANIZATIONAL BUSINESS DECISIONS 1 • Project – A temporary activity a company undertakes to create a unique product, service, or result • Metrics – Measurements that evaluate results to determine whether a project is meeting its goals

  12. MEASURING ORGANIZATIONAL BUSINESS DECISIONS 2 • Critical success factors (CSF’s) – The crucial steps companies make to perform to achieve their goals and objectives and implement strategies • Create high-quality products • Retain competitive advantages • Reduce product costs • Increase customer satisfaction • Hire and retain the best professionals

  13. MEASURING ORGANIZATIONAL BUSINESS DECISIONS 3 • Key performance indicators (KPI’s) – The quantifiable metrics a company uses to evaluate progress toward critical success factors • Turnover rates of employees • Number of product returns • Number of new customers • Average customer spending

  14. MEASURING ORGANIZATIONAL BUSINESS DECISIONS 4 • Access the text alternative for slide images.

  15. EFFICIENCY AND EFFECTIVENESS METRICS 1 • Efficiency M͏I͏S metrics – Measure the performance of M͏I͏S itself, such as throughput, transaction speed, and system availability • Effectiveness M͏I͏S metrics –Measures the impact M͏I͏S has on business processes and activities, including customer satisfaction and customer conversation rates

  16. EFFICIENCY AND EFFECTIVENESS METRICS 2 • Access the text alternative for slide images.

  17. THE INTERRELATIONSHIP BETWEEN EFFICIENCY AND EFFECTIVENESS • Ideal Operation Occurs in the Upper Right Corner • Access the text alternative for slide images.

  18. THE INTERRELATIONSHIP BETWEEN EFFICIENCY AND EFFECTIVENESS METRICS • Benchmark – Baseline values the system seeks to attain • Benchmarking – A process of continuously measuring system results, comparing those results to optimal system performance (benchmark values), and identifying steps and procedures to improve system performance

  19. USING M͏I͏S TO MAKE BUSINESS DECISIONS 1 • Model – A simplified representation or abstraction of reality • Models help managers to • Calculate risks • Understand uncertainty • Change variables • Manipulate time to make decisions

  20. USING M͏I͏S TO MAKE BUSINESS DECISIONS 2 • Types of Decision-Making M͏I͏S Systems • Access the text alternative for slide images.

  21. OPERATIONAL SUPPORT SYSTEMS 1 • Transactional Data –Encompasses all of the data contained within a single business process or unit of work, and its primary purpose is to support the performing of daily operational or structured decisions • Transaction processing system (TPS) –Basic business system that serves the operational level and assists in making structured decisions • Online transaction processing (OLTP) – Capturing of transaction and event data using technology to process, store, and update • Source document – The original transaction record

  22. OPERATIONAL SUPPORT SYSTEMS 2 • Systems Thinking View of a TPS

  23. MANAGERIAL SUPPORT SYSTEMS 1 • Analytical Information – Encompasses all organizational data, and its primary purpose is to support the performing of managerial analysis or semistructured decisions • Online analytical processing (O͏L͏A͏P) – Manipulation of information to create business intelligence in support of strategic decision making • Decision support system (DSS) – Models information to support managers and business professionals during the decision-making process

  24. MANAGERIAL SUPPORT SYSTEMS 2 • Systems Thinking View of a DSS • Access the text alternative for slide images.

  25. MANAGERIAL SUPPORT SYSTEMS 3 • Interaction Between a TPS and DSS • Access the text alternative for slide images.

  26. STRATEGIC SUPPORT SYSTEMS 1 • Executive information system (EIS) – A specialized DSS that supports senior-level executives and unstructured, long-term, nonroutine decisions requiring judgment, evaluation, and insight

  27. STRATEGIC SUPPORT SYSTEMS 2 • Organization Information Levels • Access the text alternative for slide images.

  28. STRATEGIC SUPPORT SYSTEMS 3 • Interaction Between a TPS and EIS • Access the text alternative for slide images.

  29. STRATEGIC SUPPORT SYSTEMS 4 • Digital dashboard –Tracks KPI’s and CSF’s by compiling information from multiple sources and tailoring it to meet user needs • Access the text alternative for slide images.

  30. SECTION 2.2: DIGITAL TRANSFORMATION: BUSINESS PROCESS AND ARTIFICIAL INTELLIGENCE

  31. LEARNING OUTCOMES 2 • Explain the value of business processes for a company and differentiate between customer-facing and business-facing processes • Demonstrate the value of business process modeling and compare As-Is and To-Be models • Differentiate among automation, streamlining, and reengineering • Describe artificial intelligence and its six branches

  32. MANAGING BUSINESS PROCESSES 1 • Access the text alternative for slide images.

  33. MANAGING BUSINESS PROCESSES 2 • The Order-to-Delivery Process • Access the text alternative for slide images.

  34. MANAGING BUSINESS PROCESSES 3 • Customer facing process –Results in a product or service that is received by an organization’s external customer • Business facing process –Invisible to the external customer but essential to the effective management of the business • Access the text alternative for slide images.

  35. BUSINESS PROCESS MODELING 1 • Business Process Model and Notation (BPMN) –A graphical notation that depicts the steps in a business process • Business Process Model and Notation (BPMN) • A table titled, Business Process Model and Notation (BPMN) EVENT is divided into three columns explaining the notations.

  36. BUSINESS PROCESS MODELING 2 • Business process model –A graphic description of a process, showing the sequence of process tasks, which is developed for a specific • Business process modeling (or mapping) – The activity of creating a detailed flow chart or process map of a work process showing its inputs, tasks, and activities, in a structured sequence • As-Is process model –Represent the current state of the operation that has been mapped, without any specific improvements or changes to existing processes • To-Be process model –Shows the results of applying change improvement opportunities to the current (As-Is) process model

  37. BUSINESS PROCESS MODELING 3 • Access the text alternative for slide images.

  38. BUSINESS PROCESS MODELING 4 • Access the text alternative for slide images.

  39. BUSINESS PROCESS BEST PRACTICES 1 • Business Process Driving M͏I͏S Choices • The Best Choice for Operations • Access the text alternative for slide images.

  40. BUSINESS PROCESS BEST PRACTICES 2 • M͏I͏S Driving Business Processes • The Worst Choice for Operations • Access the text alternative for slide images.

  41. BUSINESS PROCESS BEST PRACTICES 3 • Use case –A description of how a system, product, or service can be used to achieve specific goals, tasks, or objectives • Access the text alternative for slide images.

  42. BUSINESS PROCESS BEST PRACTICES 4 • Workflow – Includes the tasks, activities, and responsibilities required to execute each step in a business process • Digitization – The automation of existing manual and paper-based processes and workflows to a digital format

  43. BUSINESS PROCESS BEST PRACTICE • Types of change an organization can achieve, along with the magnitudes of change and the potential business benefit • Access the text alternative for slide images.

  44. OPERATIONAL BUSINESS PROCESSES - AUTOMATION • Operational business processes –Static, routine, daily business processes such as stocking inventory, checking out customers, or daily opening and closing processes • Business process improvement – Attempts to understand and measure the current process and make performance improvements accordingly • Automation – The process of computerizing manual tasks, making them more efficient and effective, and dramatically lowering operational costs

  45. OPERATIONAL BUSINESS PROCESSES – ROBOTIC PROCESS AUTOMATION • Robotic process automation –The use of software with artificial intelligence (AI) and machine learning capabilities to handle high-volume, repeatable tasks that previously required a human to perform

  46. MANAGERIAL BUSINESS PROCESSES STREAMLINING • Managerial business processes –Semidynamic, semiroutine, monthly business processes such as resource allocation, sales strategy, or manufacturing process improvements • Streamlining – Improves business process efficiencies by simplifying or eliminating unnecessary steps • Bottleneck – Occur when resources reach full capacity and cannot handle any additional demands • Redundancy – Occurs when a task or activity is unnecessarily repeated

  47. STRATEGIC BUSINESS PROCESSES REENGINEERING 1 • Strategic business processes – Dynamic, nonroutine, long-term business processes such as financial planning, expansion strategies, and stakeholder interactions • Business process reengineering (BPR) –Analysis and redesign of workflow within and between enterprises

  48. STRATEGIC BUSINESS PROCESSES REENGINEERING 2 • A company can improve the way it travels the road by moving from foot to horse and then horse to car • BPR looks at taking a different path, such as an airplane which ignore the road completely

  49. STRATEGIC BUSINESS PROCESSES REENGINEERING 3 • Progressive Insurance Mobile Claims Process • Access the text alternative for slide images.

  50. STRATEGIC BUSINESS PROCESSES REENGINEERING 4 • Access the text alternative for slide images.

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