Managerial Support Systems

MIS 503 Management Information Systems MBA Program

Information Requirements by Management Level

Strategic Management

Tactical Management

Operational Management
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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

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

Semi-structured Decisions
Decision scenarios that have some structured components and some unstructured components.

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 Decision Implementation

Strategies for Making Decisions

Optimization Satisficing Elimination by Aspects Incrementalism Mixed Scanning Analytic Hierarchy Process
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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

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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

Figure 7.1 Decision Support Systems 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., wheres 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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GEOGRAPHIC INFORMATION SYSTEMS

GISs systems based on manipulation of relationships in space that use geographic data Early GIS users:
Natural resource management Public administration NASA and the military Urban planning Forestry Map makers

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GEOGRAPHIC INFORMATION SYSTEMS

Business Adopts Geographic Technologies

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.)

Figure 7.3 Department Store Analysis

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GEOGRAPHIC INFORMATION SYSTEMS

Whats Behind Geographic Technologies

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 24 220 Page

GEOGRAPHIC INFORMATION SYSTEMS

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

Figure 7.4 Map Layers in a GIS

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GEOGRAPHIC INFORMATION SYSTEMS

Whats Behind Geographic Technologies

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?
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DATA MINING
Data Mining uses different technologies to search for (mine) nuggets of information from data stored in a data warehouse

Data mining software:

Oracle 9i Data Mining and Oracle Data Mining Suite SAS Enterprise Miner IBM Intelligent Miner Modeling Angoss Softwares KnowledgeSEEKER, Knowledge Studio, and KnowledgeExcelerator Datamations Data Mining and Business Intelligence Product

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

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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
see Table 7.1 Uses of Data Mining

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GROUP SUPPORT SYSTEMS

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 Page 217-218
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GROUP SUPPORT SYSTEMS

Traditional same time, same place meeting layout

Figure 7.2 Group Support System Layout

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EXECUTIVE INFORMATION SYSTEMS/BUSINESS INTELLIGENCE SYSTEMS

EISs a hands-on tool that focuses, filters, and organizes an executives information so he or she can make more effective use of it
Where does EIS data come from? Filtered and summarized transaction data (internal) Collected competitive information (internal and external)
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EXECUTIVE INFORMATION SYSTEMS/BUSINESS INTELLIGENCE SYSTEMS

Executive information system (EIS):
Delivers online current information about business conditions in aggregate form 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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(Courtesy of Geac Computer Corporation Limited. Copyright 2003 Geac Computer Corporation Limited.)

Figure 7.5 Example Geac Performance Management Displays

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(Courtesy of Geac Computer Corporation Limited. Copyright 2003 Geac Computer Corporation Limited.)

Figure 7.5 Example Geac Performance Management Displays

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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
Turings 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 37 intelligent behavior

AI Versus Traditional Programs

AI programs manipulate symbols or rules rather than numbers AI programs are generally nonalgorithmic often employing heuristics or rules of thumb Many AI programs are concerned with pattern recognition

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

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

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

Most relevant for managerial support

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

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

Figure 7.6 Architecture of an Expert System

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EXPERT SYSTEMS
Obtaining an Expert System

Approaches:
Buy a fully developed system created for a specific application Develop using a purchased expert system shell (basic framework) and user-friendly special language

Have knowledge engineers custom build using special-purpose language (such as Prolog or Lisp)

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EXPERT SYSTEMS
Examples of Expert Systems
Standford Universitys MYCIN to diagnose and prescribe treatment for meningitis and blood diseases General Electrics CATS-1 to diagnose mechanical problems in diesel locomotives AT&Ts ACE to locate faults in telephone cables Market Surveillance software to detect insider trading FAST software for credit analysis, used by banking industry Nestle Foods developed system to provide employees Page 44 230 information on pension fund status

Online Expert Systems

Whats wrong with your car?
http://www.expertise2go.com/webesie/car/

Buying the right PDA

http://www.expertise2go.com/shop/pda.htm

Choosing a Desktop PC
http://www.expertise2go.com/shop/desktop.htm
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NEURAL NETWORKS
Neural networks attempt to tease out meaningful patterns from vast amounts of data Process:
1. 2. 3. 4. 5. 6. Program given set of data Program analyzed data, works out correlations, selects variables to create patterns Pattern used to predict outcomes, then results compared to known results Program changes pattern by adjusting variable weights or variables themselves Repeats process over and over to adjust pattern When no further adjustment possible, ready to be used to 46 make predictions for future cases Page 232

NEURAL NETWORKS

Table 7.2 Uses of 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 (check out botspot.com)
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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 E-meetings Tacit to Explicit Answering questions

Synchronous collaboration (chat)

Explicit to Tacit

Annotation
Explicit to Explicit

Visualization
Browsable video/audio of presentations

Text search
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 REALITY
Virtual reality use of a computer-based system to create an environment that seems real to one or more senses of users

Non-entertainment categories:
Training Design Marketing

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VIRTUAL REALITY
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
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VIRTUAL REALITY

(Courtesy of Homestore, Inc. Copyright 2004 Homestore, Inc.)

Figure 7.7 Hometour 360o Virtual Tour of Living Room

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ENTERPRISE RESOURCE PLANNING SYSTEMS

Also include transaction processing systems Set of integrated business applications (modules) that carry out common business functions:
General ledger, accounts payable, accounts receivable, material requirements planning, order management, inventory control, human resources management

Usually purchased from software vendor

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ENTERPRISE RESOURCE PLANNING SYSTEMS

How they differ:
1. ERP modules are integrated

2. ERP modules reflect a particular way of doing business

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ENTERPRISE RESOURCE PLANNING SYSTEMS

Choosing right software and implementation difficult and expensive Requires large investment of money and people resources Leading ERP software vendors:
SAP PeopleSoft, Inc. (bought J.D. Edwards) Oracle Baan

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And now what really needs to happen to be an innovator!

Identify an Opportunity Develop a Concept Determine the Required Resources Acquire the Necessary Resources Implement and Manage Harvest the Venture

Entrepreneurship and creativity are really represented by a process!

Source: Morris et al. Entrepreneurship & Innovation

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Entrepreneurship and Business Models

Frameworks
The Environment

The Organizational Context

Entrepreneurial Process

The Entrepreneur

The Concept

The Resources

Source: Morris et al. Entrepreneurship & Innovation

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 How to find opportunities

Types Perennial Methods Deliberate Search vs. Discovery Sources Occasional Market Pull vs. Resource or Capacity Push

Entrepreneurship and Business Models

Detractors No Need Present Window is not yet open Strong Loyalties High Switching Costs The Rules Change Demographics Change Underserved Markets Social Trends

Multiple Causes

New customers to the market

Satisfied customers

Multiple Effects

Increase in usage rates Shortages

Easy for others to enter with alternatives Intense competition

Customers hard to reach

New Knowledge

Source: Morris et al. Entrepreneurship & Innovation

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Entrepreneurship and Business Models

Types of Innovations
New to the world products or services New to the market products or services New product or service line that at least one competitor is offering Addition to existing products or service lines Product/service improvement, revision, including addition of new features or options New application of existing products or services, including application to a new market segment Repositioning of an existing product or service
Source: Morris et al. Entrepreneurship & Innovation
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Entrepreneurship and Business Models

Entry Wedges
Other Entry Wedges
Exploiting Parallel Momentum Geographic Transfer Supply Shortages Tapping Utilized Resources Customer Sponsorship Customer Contract Becoming a 2nd Source Parent Co. Sponsorship Joint Venture Licensing Market Relinquishment Selloff Division Governmental Sponsorship Favored Purchasing Rule Changes
New Product or Service Parallel Competition Franchising Acquisition

X X X X X X X X X X X

Source: Morris et al. Entrepreneurship & Innovation

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What is a Business Model?

Six key questions
How do we create value? For whom do we create value? What is our source of competence/ advantage? How do we differentiate ourselves? How do we make money? What are our time, scope, and size ambitions?

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Porters Competitive Forces Model: How the Internet Influences Industry Structure

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