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7. COIS11011 WEEK 7. Chapter. Enhancing Business Intelligence Using Information Systems. Use of outdated information systems can be costly. A software glitch at the Tokyo Stock Exchange cost Misuho Securities Co. $US350 million. Learning Objectives. Learning Objectives.

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  1. 7 COIS11011 WEEK 7 Chapter Enhancing Business Intelligence Using Information Systems Use of outdated information systems can be costly. A software glitch at the Tokyo Stock Exchange cost Misuho Securities Co. $US350 million. Information Systems Today: Managing in the Digital World

  2. Learning Objectives Information Systems Today: Managing in the Digital World

  3. Learning Objectives Information Systems Today: Managing in the Digital World

  4. Decision-Making Levels of an Organization Information Systems Today: Managing in the Digital World

  5. Operational Level • Day-to-day business processes • Interactions with customers • Information systems used to: • Automate repetitive tasks • Improve efficiency • Decisions: • Structured • Recurring • Can often be automated using IS Information Systems Today: Managing in the Digital World

  6. Summary of Characteristics: Operational Level Information Systems Today: Managing in the Digital World

  7. Managerial Level • Functional managers • Monitoring and controlling operational-level activities • Providing information to executive level • Midlevel managers • Focus on effectively utilizing and deploying resources • Goal of achieving strategic objectives • Managers’ decisions • Semistructured • Contained within business function • Moderately complex • Time horizon of few days to few months Information Systems Today: Managing in the Digital World

  8. Summary of Characteristics: Managerial Level Information Systems Today: Managing in the Digital World

  9. Executive Level • The president, CEO, vice presidents, board of directors • Decisions • Long-term strategic issues • Complex and nonroutine problems • Unstructured decisions • Long-term ramifications Information Systems Today: Managing in the Digital World

  10. Summary of Characteristics: Executive Level Information Systems Today: Managing in the Digital World

  11. Comparison of Decision-Making Levels Information Systems Today: Managing in the Digital World

  12. Learning Objectives Information Systems Today: Managing in the Digital World

  13. General Types of Information Systems • Input-process-output model • Basic systems model • Payroll system example Information Systems Today: Managing in the Digital World

  14. Transaction Processing System • Operational level • Purpose: • Processing of business events and transactions • Increase efficiency • Automation • Lower costs • Increased speed and accuracy • Examples • Payroll processing • Sales and order processing • Inventory management • Etc. Information Systems Today: Managing in the Digital World

  15. Architecture of a TPS Information Systems Today: Managing in the Digital World

  16. Architecture of a TPS: Inputs • Source Documents • Different data entry methods Information Systems Today: Managing in the Digital World

  17. Architecture of a TPS: Processing • Online processing • Immediate results • Batch processing • Transactions collected and later processed together • Used when immediate notification not necessary Information Systems Today: Managing in the Digital World

  18. Architecture of a TPS: Outputs • Counts, summary reports • Inputs to other systems • Feedback to systems operator Information Systems Today: Managing in the Digital World

  19. Summary of TPS Characteristics Information Systems Today: Managing in the Digital World

  20. Management Information Systems • Managerial level • Purpose: • Produce reports • Support of midlevel managers’ decisions • Examples • Sales forecasting • Financial management and forecasting • Manufacturing, planning and scheduling • Inventory management and planning • Etc. Information Systems Today: Managing in the Digital World

  21. Architecture of an MIS Information Systems Today: Managing in the Digital World

  22. Architecture of an MIS: Inputs • TPS data • Internal data • Requests for reports Information Systems Today: Managing in the Digital World

  23. Architecture of an MIS: Processing • Aggregation • Summary Information Systems Today: Managing in the Digital World

  24. Architecture of an MIS: Outputs Information Systems Today: Managing in the Digital World

  25. Summary of MIS Characteristics Information Systems Today: Managing in the Digital World

  26. Executive Information Systems • A.k.a. Executive support systems • Executive level • Purpose • Aid in executive decision-making • Provide information in highly aggregated form • Examples • Monitoring of internal and external events and resources • Crisis management • Etc. Information Systems Today: Managing in the Digital World

  27. Architecture of an EIS Information Systems Today: Managing in the Digital World

  28. Architecture of an EIS: Inputs • Hard data • Facts and numbers • Generated by TPS & MIS • Soft data • Nonanalytical information • Web-based news portals • Customizable • Delivery to different media Information Systems Today: Managing in the Digital World

  29. Architecture of an EIS: Processing • Summarizing • Graphical interpreting Information Systems Today: Managing in the Digital World

  30. Architecture of an EIS: Outputs • Summary reports • Trends • Simulations Information Systems Today: Managing in the Digital World

  31. EIS Output: Digital Dashboards • Digital dashboard • Presentation of summary information • Information from multiple sources • Ability to drill down if necessary Information Systems Today: Managing in the Digital World

  32. EIS Output: Digital Dashboard (II) • Total employee absenteeism a) line chart b) drill-down numbers Information Systems Today: Managing in the Digital World

  33. Summary of EIS Characteristics Information Systems Today: Managing in the Digital World

  34. Learning Objectives Information Systems Today: Managing in the Digital World

  35. 7 Information Systems that Span Organizational Boundaries Information Systems Today: Managing in the Digital World

  36. 1. Decision Support Systems • Decision making support for recurring problems • Used mostly by managerial level employees (can be used at any level) • Interactive decision aid • What-if analyses • Analyze results for hypothetical changes • E.g., Microsoft Excel Information Systems Today: Managing in the Digital World

  37. Architecture of a DSS Information Systems Today: Managing in the Digital World

  38. Common DSS Models Information Systems Today: Managing in the Digital World

  39. Summary of DSS Characteristics Information Systems Today: Managing in the Digital World

  40. Using DSS to Buy a Car • Selling price – $22,500 • Down payment – $2,500 • Monthly payment – about $400 • Interest rate information from the bank Information Systems Today: Managing in the Digital World

  41. Microsoft Excel: Loan Analysis Template • Calculate • Monthly payment • Total amount paid • Total interest paid • What-if analysis • Change inputs • See the results Information Systems Today: Managing in the Digital World

  42. Loan Analysis Summary • Examine results • Choose best solution for given situation • E.g., based on monthly payment or total interest Information Systems Today: Managing in the Digital World

  43. 2. Intelligent Systems • Artificial intelligence • Simulation of human intelligence • Reasoning, learning, sensing, hearing, walking, talking, etc. Information Systems Today: Managing in the Digital World

  44. Example: Artificial Intelligence Information Systems Today: Managing in the Digital World

  45. Intelligent Systems • Intelligent system • Sensors, software and computers • Emulate and enhance human capabilities • Three types • Expert systems • Neural networks • Intelligent agents Information Systems Today: Managing in the Digital World

  46. Expert Systems • Use reasoning methods • Manipulate knowledge rather than information • System asks series of questions • Inferencing/pattern matching • Matching user responses with predefined rules • If-then format • Fuzzy logic • Represent rules using approximations Information Systems Today: Managing in the Digital World

  47. Example: Expert System Expert system to make a medical recommendation Information Systems Today: Managing in the Digital World

  48. Architecture of an Expert System Information Systems Today: Managing in the Digital World

  49. Summary of ES Characteristics Information Systems Today: Managing in the Digital World

  50. Neural Network System • Approximation of human brain functioning • Training to establish common patterns • Past information • New data compared to patterns • E.g., loan processing Information Systems Today: Managing in the Digital World

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