Information System for

Managers – IS01
Chapters Covered :
Chapter 11 : Enterprise Systems
Chapter 12 : Management Support Systems
Chapter 13 : Intelligent Information Systems
Recap of previous classes
E-commerce, it’s Advantages
– Better relationships with suppliers, customers, business partners
– Price transparency
– Round the clock and globe operations
– Gathering information on potential customers
– Increasing customer involvement
– Improving customer service
– Increasing flexibility and ease of shopping

Sales

- Cost of goods
sold

Gross margin

- Expenses

Net income
Global Information Systems: An Overview
• Global information system (GIS)
– Information system that works across national
borders
– Facilitates communication between headquarters and
subsidiaries in other countries
– Incorporates all the technologies and applications
found in a typical information system
– Stores, manipulates, and transmits data across
cultural and geographic boundaries
 BUILDING SUCCESSFUL INFORMATION SYSTEMS
• SDLC method for developing information
systems.
• Tasks involved in the planning phase.
• Tasks involved in the requirements gathering &
analysis phase.
• Tasks involved in the design phase.
• Tasks involved in the implementation phase.
• Tasks involved in the maintenance phase.
CHAPTER 11

ENTERPRISE SYSTEMS
 Chapter 11 Enterprise Systems

L e a r n i n g o u t c o m e s of this chapter

LO1 Describe the purpose of an enterprise system.

LO2 Explain how supply chain management is used.
LO3 Summarize the challenges in supply chain
management.
LO4 Describe customer relationship management
systems.
LO5 Explain knowledge management systems.
LO6 Explain how personalization technology is used to
improve customer service.
LO7 Describe enterprise resource planning systems
Supply Chain Management
• Supply chain
– Integrated network
– Consisting of an organization, its suppliers,
transportation companies, and brokers
– Used to deliver goods and services to customers
– Exist in both service and manufacturing organizations
A Supply Chain Configuration
Supply Chain Management (cont’d.)
• Supply chain management (SCM)
– Process of working with suppliers and other partners
in the supply chain to improve procedures for
delivering products and services
– Coordinates:
• Procuring materials
• Transforming materials into intermediate and
finished products or services
• Distributing finished products or services to
customers
Supply Chain Management (cont’d.)
• In manufacturing firm, information in an SCM
system flows between the following areas:
– Product flow
– Information flow
– Finances flow
• Four key decisions in supply chain management:
– Location
– Inventory
– Production
– Transportation
Dell Computer’s Supply Chain
• Modified its supply chain from a “push” to a
“pull” manufacturing process
– Also known as “built to order (BTO)”
• Main sales channel is direct sales to customers
• Dell has been able to reduce costs by eliminating
intermediaries and shortening delivery time
SCM Technologies
• Information technologies and the Internet play a
major role in implementing an SCM system
• Electronic Data Interchange (EDI)
– Enables business partners to send and receive
information on business transactions
– Expedites delivering accurate information
– Lowers the cost of transmitting documents
– Advantage of being platform independent and easy to
use
Internet-Enabled SCM
• Improves information sharing throughout the
supply chain
• Can improve the following SCM activities:
– Purchasing/procurement
– Inventory management
– Transportation
– Order processing
– Customer service
– Production scheduling
E-marketplaces
• Third-party exchange
– Provides a platform for buyers and sellers to interact
with each other and trade more efficiently online
• Benefits
– Increases efficiency and effectiveness in the supply
chain
– Provides opportunities for sellers and buyers to
establish new trading partnerships
– Provides a single platform for prices, availability, and
stock levels that’s accessible to all participants
Online Auctions
• Bring traditional auctions to customers around
the globe
– Make it possible to sell far more goods and services
than at a traditional auction
• Brokerage business model
• Reverse auctions
– Invite sellers to submit bids for products and services
Collaborative Planning, Forecasting, and Replenishment

• Coordinate supply chain members through point-

of-sale (POS) data sharing and joint planning
• Any data collected is shared with all members of
the supply chain
• Coordinating the supply chain can be difficult
• CPFR ensures that inventory and sales data are
shared across the supply chain
– So that everyone knows the exact sales and inventory
levels
• Costs for each partner are shared or minimized
• Unforeseen problems can crop up
The CPFR Process
Customer Relationship Management
• CRM
– Consists of the processes a company uses to track
and organize its contacts with customers
• Main goal of a CRM system
– Improve services offered to customers
– Use customer contact information for targeted
marketing
• Marketing strategies in a CRM system
– Focus on long-term relationships with customers
instead of transactions
Customer Relationship Management (cont’d.)
• Identifies segments of customers
• Improves products and services to meet
customers’ needs
• Improves customer retention
• Identifies a company’s most profitable (and
loyal) customers
• Helps organizations make better use of data,
information, and knowledge to understand
customers
Customer Relationship Management (cont’d.)
• Gives organizations more complete pictures of
their customers
– Integrates demographic and other external data with
customers’ transaction data to better understand
customer behavior
• Pays external agencies for additional data about
you that might be public or semiprivate
Customer Relationship Management (cont’d.)
• With a CRM system, organizations can:
– Provide services and products that meet customers’
needs
– Offer better customer service through multiple
channels
– Increase cross-selling and upselling
– Help sales personnel close deals faster by offering
data on customers’ backgrounds
– Retain existing customers and attract new ones
Customer Relationship Management (cont’d.)
• CRM systems include:
– Sales automation
– Order processing
– Marketing automation
– Customer support
– Knowledge management
– Personalization technology
CRM in Action
• Time Warner Cable Business Class
– CRM system from Salesforce.com
– Analyze business data, improve the accuracy of
forecasts, improve problem solving, and monitor sales
and business activities
• Important features of the system include:
– Dashboards, features for “drilling down,” Web-based
knowledge base for employees and customers, and
Web log for sales personnel communication
• Has increased productivity by 10%
Personalization Technology
• Personalization
– Satisfies customers’ needs, builds customer
relationships, and increases profits
– Designs goods and services that meet customers’
preferences better
• Customization
– Allows customers to modify the standard offering
• Such as selecting a different home page to be
displayed each time you open your Web browser
Knowledge Management
• Improve CRM systems by identifying, storing,
and disseminating “know-how”—facts about how
to perform tasks
• Knowledge is an asset
– Should be shared throughout an organization to
generate business intelligence and maintain a
competitive advantage in the marketplace
• Knowledge is more than information and data
– Also contextual
Knowledge Management (cont’d.)
• Knowledge repository
– Stores knowledge of experts
• Example: knowledge base of typical customer
complaints and solutions
• Motivates employees to share knowledge
– Offer reward
• Simple knowledge management system
– Using groupware
• Other tools and technologies include:
– DBMSs, data-mining tools, decision support systems
 Enterprise Resource Planning
• Integrated system
• Collects and processes data
• Manages and coordinates resources,
information, and functions
• Many components, including:
– Hardware, software, procedures, and input from all
functional areas
• ERP systems are available as modules
• Organization can purchase only the components
it needs
– Keeps costs down for organizations
• More than 40 vendors offer ERP software
Enterprise Resource Planning (cont’d.)
• Well-designed ERP system benefits:
– Increased availability and timeliness of information
– Increased data accuracy and improved response time
– Improved customer satisfaction
– Improved employee satisfaction
– Improved planning and scheduling
– Improved supplier relationship
– Improved reliability of information
– Reduction in inventory costs
– Reduction in labor costs
– Reduction in order-to-fulfillment time
Enterprise Resource Planning
Enterprise Resource Planning (cont’d.)
• ERP systems are available as modules
• Organization can purchase only the components
it needs
– Keeps costs down for organizations
• More than 40 vendors offer ERP software
Summary
• Enterprise systems
• Supply chain management (SCM)
– Technology
• Customer relationship management (CRM)
– Personalization
– Customization
• Knowledge management and enterprise
resource planning (ERP)
CHAPTER 12

MANAGEMENT SUPPORT
SYSTEMS
Chapter 12 Management Support Systems
L e a r n i n g o u t c o m e s for this
chapter
LO1 Define types of decisions and phases of the
decision-making process in a typical organization.
LO2 Describe a decision support system.
LO3 Explain an executive information system’s
importance in decision making.
LO4 Describe group support systems, including
groupware and electronic meeting systems.
LO5 Summarize uses for a geographic information
system.
LO6 Describe guidelines for designing a management
support system.
L07 Summary
Types of Decisions in an Organization
• Structured decisions
– Well-defined standard operating procedure exists
– Also called programmable tasks
– Can be automated
• Semistructured decisions
– Not as well-defined by standard operating procedures
– Include a structured aspect that benefits from
information retrieval, analytical models, and
information systems technology
Types of Decisions in an Organization (cont’d.)
• Unstructured decisions
– Unique; typically one-time decisions
– Do not rely on standard operating procedure
– Decision maker’s intuition plays the most important
role
– Information technology offers little support for these
decisions
• Management support systems (MSSs)
– Different types of information systems have been
developed to support certain aspects and types of
decisions
Phases of the Decision-Making Process
• Herbert Simon
– Winner of the 1978 Nobel Prize in economics

– Defines three phases in the decision-making process:

intelligence, design, and choice

– Fourth phase, implementation, can be added

Decision Making as a Component of Problem Solving
Decision Support Systems
• Decision support system (DSS)
– Interactive information system

– Consisting of hardware, software, data, and models

(mathematical and statistical)

– Designed to assist decision makers in an organization

Components of a DSS (Decision Support System)
DSS Capabilities
• What-if analysis
• Goal-seeking
• Sensitivity analysis
• Exception reporting analysis
• More capabilities, such as:
– Graphical analysis, forecasting, simulation, statistical
analysis, and modeling analysis
Types of Decisions
Roles in the DSS Environment
• Roles include:
– User, managerial designer, technical designer, and
model builder
• Users
– Most important role because they’re the ones using
the DSS
• Managerial designer
– Defines the management issues in designing and
using a DSS
Costs and Benefits of Decision Support Systems
• Benefits of a DSS:
– Increase in the number of alternatives examined
– Fast response to unexpected situations
– Ability to make one-of-a-kind decisions
– New insights and learning
– Improved communication
– Improved control over operations
– Cost savings from being able to make better decisions
and analyze several scenarios (what-ifs) in a short
period
Executive Information Systems
• Branch of DSSs
• Interactive information systems that give
executives easy access to internal and external
data
• Typically include:
– “Drill-down” features
– Digital dashboard
• Ease of use
– EIS designers should focus on simplicity when
developing a user interface
Avoiding Failure in Design and Use of EISs
• Factors that can lead to a failed EIS:
– Corporate culture isn’t ready
– Organizational resistance to the project
– Project is viewed as unimportant
– Management loses interest or isn’t committed
– Objectives and information requirements can’t be
defined clearly
– System doesn’t meet its objectives
– System’s objectives aren’t linked to factors critical to
the organization’s success
– Project’s costs can’t be justified
EIS Packages and Tools
• Generally designed with two or three components:
– Administrative module for managing data access
– Builder module for developers to configure data
mapping and screen sequencing
– Runtime module for using the system
• Some EIS packages provide a data storage system
• Tasks that managers perform for which an EIS is useful:
– Tracking performance
– Flagging exceptions
– Ranking, comparing, spotting trends
– Investigating/exploring
Group Support Systems
• Use computer and communication technologies to
formulate, process, and implement a decision-making
task
• Considered a kind of intervention technology that helps
overcome the limitations of group interactions
• Reduce communication barriers
• Introduce order and efficiency into situations that are
inherently unsystematic and inefficient
• Useful for:
– Committees, Review panels, Board meetings, Task
forces, Decision-making sessions that require input
from several decision makers
Groupware
• Assist groups in:
– Communicating, collaborating, and coordinating their
activities
• Intended more for teamwork than for decision support
• Some capabilities of groupware include:
– Audio and video conferencing
– Automated appointment books
– Brainstorming
– Database access
– E-mail
– Online chat
– Scheduling
– To-do lists
– Workflow automation
Groupware and Health IT
The overall goal of Clinical Groupware is to provide a
unified view of the patient by collecting and analyzing data
and information from a variety of sources. It has the
following benefits:

• Inexpensive to acquire and use

• Offers evidence-based guidance
• Routinely collects quality and performance measures
• Provides a collaborative workflow platform
Electronic Meeting Systems
• Enable decision makers in different locations to
participate in a group decision-making process
• Include:
– Real-time computer conferencing
– Video teleconferencing
– Desktop conferencing
Advantages and Disadvantages of GSSs
• Advantages:
– Costs as well as stress are reduced due to decreased
travel
– More time to talk with each other and solve problems
– Shyness isn’t as much of an issue in GSS sessions
– Increasing collaboration improves the effectiveness of
decision makers
• Disadvantages:
– Lack of the human touch
– Unnecessary meetings
– Security problems
– Costs of GSS implementation are high
Geographic Information System
• Captures, stores, processes, and displays
geographic information
• Uses spatial and nonspatial data
• Uses three geographic objects:
– Points
– Lines
– Areas
• Common example of a GIS:
– Getting driving directions from Google Maps
– User-friendly interface that helps you visualize the
route
– After you make a decision, you can print driving
directions and a map
GIS Applications
• Education planning
• Urban planning
• Government
• Insurance
• Marketing
• Real estate
• Transportation and logistics
Guidelines for Designing a Management Support
System
• Get support from the top
• Define objectives and benefits clearly
• Identify executives’ information needs
• Keep the lines of communication open
• Hide the system’s complexity and keep the
interface simple
• Keep the “look and feel” consistent
• Design a flexible system
• Make sure response time is fast
Summary
• Different types of decisions
• Phases of decision making in a typical
organization
• DSS:
– Components, capabilities, key players, and costs and
benefits
• Executive information systems
• Group support systems
• Geographic information systems
CHAPTER 13

INTELLIGENT
INFORMATION SYSTEMS
 Chapter 13 Intelligent Information Systems

L e a r n i n g o u t c o m e s of this chapter
LO1 Define artificial intelligence and explain how these technologies
support decision making.
LO2 Explain an expert system, its applications, and its components.
LO3 Describe case-based reasoning.
LO4 Summarize types of intelligent agents and how they’re used.
LO5 Describe fuzzy logic and its uses.
LO6 Explain artificial neural networks.
LO7 Describe how genetic algorithms are used.
LO8 Explain natural language processing, its advantages and
disadvantages.
LO9 Summarize the advantages of integrating AI technologies into
decision support systems.
What Is Artificial Intelligence?
• Artificial intelligence (AI)
– Consists of related technologies that try to simulate
and reproduce human thought and behavior
– Includes thinking, speaking, feeling, and reasoning
• AI technologies
– Concerned with generating and displaying knowledge
and facts
What Is Artificial Intelligence? (cont’d.)
• Knowledge engineers try to discover “rules of
thumb”
– Enable computers to perform tasks usually handled
by humans
• Capabilities of these systems have improved in
an attempt to close the gap between artificial
intelligence and human intelligence
AI Technologies Supporting Decision Making
• Decision makers use information technologies in
decision-making analyses:
– What-is
– What-if
• Other questions:
– Why?
– What does it mean?
– What should be done?
– When should it be done?
Applications of AI Technologies
Robotics
• Some of the most successful applications of AI
• Perform well at simple, repetitive tasks
• Currently used mainly on assembly lines in
Japan and the United States
• Cost of industrial robots
• Some robots have limited vision
Robotics (cont’d.)
• Honda’s ASIMO
– One of the most advanced and most popular robots
– Works with other robots in coordination
• Personal robots
– Mobility, limited vision, and some speech capabilities
• Robots have some unique advantages in the
workplace compared with humans
Expert Systems
• One of the most successful AI-related
technologies
• Mimic human expertise in a field to solve a
problem in a well-defined area
• Consist of programs that mimic human thought
behavior
– In a specific area that human experts have solved
successfully
• Work with heuristics
An Expert System Configuration
Uses of Expert Systems
• Airline industry
• Forensics lab work
• Banking and finance
• Education
• Food industry
• Personal management
• Security
• US Government
• Agriculture
Criteria for Using Expert Systems
• Human expertise is needed but one expert can’t
investigate all the dimensions of a problem
• Knowledge can be represented as rules or
heuristics
• Decision or task has already been handled
successfully by human experts
• Decision or task requires consistency and
standardization
• Subject domain is limited
• Decision or task involves many rules and
complex logic
• Scarcity of experts in the organization
Criteria for Not Using Expert Systems
• Very few rules
• Too many rules
• Well-structured numerical problems are involved
• Problems are in areas that are too wide and
shallow
• Disagreement among experts
• Problems are solved better by human experts
Advantages of Expert Systems
• Never becomes distracted, forgetful, or tired
• Duplicates and preserves the expertise of scarce
experts
• Preserve the expertise of employees who are
retiring or leaving an organization
• Creates consistency in decision making
• Improves the decision-making skills of
nonexperts
Case-Based Reasoning
• Problem-solving technique
• Matches a new case (problem) with a previously
solved case and its solution stored in a database
• If there’s no exact match between the new case
and cases stored in the database:
– System can query the user for clarification or more
information
• If still no match found:
– Human expert must solve the problem
 Intelligent Agents
• Bots (short for robots)
• Applications of artificial intelligence are
becoming more popular
– Particularly in e-commerce
• Consist of software capable of reasoning and
following rule-based processes
• Characteristics: • Web marketing
– Collects information about
– Adaptability customers, such as items
– Autonomy purchased, demographic
information, and expressed and
– Collaborative behavior implied preferences
– Human-like interface • “Virtual catalogs”
– Mobility – Display product descriptions
based on customers’ previous
– Reactivity
experiences and preferences
Shopping and Information Agents
• Help users navigate through the vast resources available on
the Web
• Provide better results in finding information
• Examples:
– PriceScan
– BestBookBuys.com
– www.mysimon.com
– DogPile
• Searches the Web by using several search engines
• Eliminates duplicate results
Personal Agents
• Agents perform specific tasks for a user
• Such as:
– Remembering information for filling out Web forms
– Completing e-mail addresses after the first few characters
are typed
 Data-Mining Agents
• Work with a data warehouse
• Detect trend changes
• Discover new information and relationships among
data items that aren’t readily apparent
• Having this information early enables decision makers
to come up with a solution that minimizes the
negative effects of the problem

Monitoring and Surveillance Agents

• Track and report on computer equipment and network
systems
– To predict when a system crash or failure might occur
Fuzzy Logic
• Allows a smooth, gradual transition between
human and computer vocabularies
• Deals with variations in linguistic terms by using
a degree of membership
• Designed to help computers simulate vagueness
and uncertainty in common situations
• Works based on the degree of membership in a
set
Uses of Fuzzy Logic
• Used in:
– Search engines, chip design, database management
systems, software development, and more
• Examples:
– Dryers
– Refrigerators
– Shower systems
– TVs
– Video camcorders
Artificial Neural Networks
• Networks that learn and are capable of
performing tasks that are difficult with
conventional computers
• Examples:
– Playing chess
– Recognizing patterns in faces
• Used for poorly structured problems
• Use patterns instead of the “If-Then-Else” rules
that expert systems use
• Create a model based on input and output
 An Artificial Neural Network Configuration

Used for many tasks, including: Bankruptcy prediction, Credit rating,

Investment analysis, Oil and gas exploration, Target marketing
Neural Networks in Action
• Many companies are able to predict customers’
shopping behavior based on past purchases
• E-banks use neural networks to rank their
customers into groups
• Visa International
– Introduced a credit authorization system based on
neural networks to reduce credit card fraud
– Could cut fraudulent transactions by as much as 40%
Genetic Algorithms
• Used mostly in techniques to find solutions to
optimization and search problems
• Applications:
– Jet engine design, portfolio development, and
network design
• Find the combination of inputs that generates
the most desirable outputs
• Techniques:
– Selection or survival of the fittest
– Crossover
– Mutation
Natural Language Processing
• Developed so that users can communicate with computers in their
own language
• Provides question-and-answer setting that’s more natural and easier
for people to use
• Products aren’t capable of a dialogue that compares with
conversations between humans
– However, progress has been steady
• Categories:
– Interface to databases
– Machine translation
– Text scanning and intelligent indexing programs for summarizing
large amounts of text
– Generating text for automated production of standard documents
– Speech systems for voice interaction with computers
Natural Language Processing (cont’d.)
• Interfacing
– Accepting human language as input
– Carrying out the corresponding command
– Generating the necessary output
• Knowledge acquisition
– Using the computer to read large amounts of text and
understand the information well enough to:
• Summarize important points and store information
so that the system can respond to inquiries about
the content
Integrating AI Technologies into Decision Support
Systems
• I-related technologies can improve the quality of
decision support systems (DSSs)
– Including expert systems, natural language
processing, and artificial neural networks
• Benefits of integrating an expert system into the
database component of a DSS are:
– Adding deductive reasoning to traditional DBMS
functions
– Improving access speed
Summary
• Intelligent information systems
– AI technologies are used to support decision-making
processes
• Expert systems
– Components
• Case-based reasoning
• Intelligent agents
• Fuzzy logic and genetic algorithms
• Natural language processing