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Tonga Institute of Higher Education

Tonga Institute of Higher Education. IT 245 Management Information Systems Lecture 10 E-Business Decision Support. E-Business Decision Support Trends 1 of 2. New dimensions of competitions added by E-Business and E-commerce: Price, Quality and Features comparison by customers

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Tonga Institute of Higher Education

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  1. Tonga Institute of Higher Education IT 245 Management Information Systems Lecture 10 E-Business Decision Support

  2. E-Business Decision Support Trends 1 of 2 • New dimensions of competitions added by E-Business and E-commerce: • Price, Quality and Features comparison by customers • New standards in the speed and quality of delivery, service and after sales service • Time available with managers to take business decisions is shortening.

  3. E-Business Decision Support Trends 2 of 2 • Downsizing or Flattening of Organizations: Even an employee at lower level is required to take important decisions which were taken at higher levels in the old economy. • These factors require an efficient information support to take business decisions at all levels.

  4. Levels of Decisions and Information Characteristics 1 of 3 • Strategic decisions: By Board of Directors, CEO and top Executives. About Overall organizational goals, strategies, policies, objectives of the company. Strategic Planning & control. • Characteristics: Unstructured Decisions. Information required is ad hoc, summarized, Forward looking, external.

  5. Levels of Decisions and Information Characteristics 2 of 3 • Tactical Management Decisions: Middle-level management. Short-and mid-term plans, budgets. Specifying policies, procedures. Involves allocation of resources and fixing of responsibilities for execution of plans. • Characteristics:Scheduled, detailed, historical, internal, narrow focus.

  6. Levels of Decisions and Information Characteristics 3 of 3 • Operational Management Decisions: Developing short range plans like production and delivery schedules, Day-to-day operations and solving problems and bottlenecks in daily activities. • Characteristics: Routine feedback, detailed, historical, internal with narrow focus.

  7. Types of Information Systems • Management Information Systems (MIS) • On Line Analytical Processing (OLAP) • Decision Support Systems (DSS) • Geographic Information Systems (GIS) and Data Visualization Systems (DVS)

  8. Predefined Info Products for day-to-day decision-making. For Operational & Tactical Managers. Structured Decisions Reports : Periodic, Exception,Demand, Push Interactive Info support Initiated, controlled by decision maker tailored to suit personal decision style Rely on Model bases + databases, LP , Multiple regression forecasting, PV Models MIS Vs. DSS

  9. Tools and Techniques in DSS 1 of 2 • What if analysis: Changing variables and observing change on other values:Mortgage Loans: Amt, Int rate, period etc. • Sensitivity Analysis: Value of one variable is changes repeatedly and change on other variables is observed. • Goal-Seeking Analysis : Change in different variables until a goal is achieved.

  10. Tools and Techniques in DSS 2 of 2 • Optimization Analysis : More complex extension of goal-seeking analysis.Finding optimum values for one or more variables within some given constraints. • Data Mining : Discovering knowledge from an ocean of information. Discovering patterns, trends and correlations hidden in the data to get strategic business advantage.

  11. On Line Analytical Processing (OLAP) • Provide fast answers to complex business queries. • Managers can interactively manipulate large amounts of detailed data from many perspectives. • Involves analyzing complex relationships among vast data to discover patterns, trends • Analytical Operations: Consolidation, Drill Down, Slicing & Dicing

  12. Executive Information Systems (EIS) • Combines features of MIS and DSS • Focus: Meet strategic info needs of top management • Info about firm’s critical success factors. • Report formats are tailored to suit executives’ preferences. • Extensive use of graphical user interface and graphic displays. • Exception reporting, Drilled down info.

  13. Enterprise Info or Knowledge Portals • Portals for every one in the company. • Knowledge sharing • Critical info support to staff all over the world ( Refer to Real World Case 1) • Knowledge Management (KM): Creating, Sharing and disseminating knowledge in support of Business Decision Making.

  14. Artificial Intelligence Technologies in Business Section II

  15. Artificial Intelligence (AI) • A field of science and Technology based on disciplines such as computer science, biology, psychology, linguistics, mathematics and engineering. • Tries to develop computer functions normally associated with human intelligence such as reasoning, learning and problem solving.

  16. Major Application Areas of AI 1 of 3 • Cognitive Science Applications : • Expert systems • Learning Systems • Fuzzy Logic • Genetic Algorithms • Neural networks • Intelligent Agents

  17. Major Application Areas of AI 2 of 3 • Robotics Applications • Visual perceptions • Tactility • Dexterity • Locomotion • Navigation

  18. Major Application Areas of AI 3 of 3 • Natural Interface Application • Natural languages Interface • Speech recognition • Multisensory Interfaces • Virtual Reality

  19. Components of Expert Systems • Knowledge base • Software Resources: Inference Engine and User Interface Programs • Refer to Fig 6.29 on page 232

  20. Expert Systems Applications • Loan Portfolio Analysis • Investment Decisions • Insurance Underwriting (Risk Analysis) • Medical Diagnosis • Machine Control • Inventory Control • Chemical Testing etc etc.

  21. Benefits of Expert Systems • Captures and combines expertise of human expert/s in a computer-based information system. • Faster and more consistent • Does not suffer from physical fatigue or stress. • Helps preserve/reproduce knowledge of experts before they leave or retire or die. • Improve business efficiency. Competitive advantage.

  22. Limitations of Expert Systems • Limited focus • Inability to learn • Prohibitive development/maintenance Costs • Can solve specific problems in a limited domain of knowledge. • Fail miserably in solving problems requiring broad knowledge base and subjective problem solving (e.g. Assessment of Political Situation)

  23. Summary • Decision Support in E-Business • E-Business Decision Support • MIS, OAP, DSS, • Using Decision Support System • Executive Information System • Enterprise Portals & Decision Support • Artificial Intelligence Technologies in Business

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