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INS 601 MANAGEMENT INFORMATION SYSTEMS

Topic VI Business Intelligent Systems

Decision Support systems


Business Intelligence Systems Level of management Decision making Information Quality Dimensions Management Information systems DSS
DSS Types DSS Components DSS Analyses

A.I in Business

Neural Networks Fuzzy Logic Virtual Reality Expert System

Business Intelligence Systems

Applications & Technologies that focus on: Gathering Storing Analysing Providing Access to data

From many different sources to help users make better business decisions. eg MIS, DSS, Artificial Intelligence based systems

Decisions in the E-Business


Decision Characteristics
Unstructured Excutive Level
In rm fo
Information Characteristic Ad-Hoc, Unscheduled, Wide Scope

cis i

Semistructured

on

io at

De

Management Level

Structured

Operational Level

Pre-specified, Detailed, Narrow Scope

Decisions in the E-Business

Strategic Management: Board of Directors, CEOs etc


They develop overall organisational goals, strategies, policies as part of strategic planning process.

Tactical Management: General Manager, Divisional Director


They develop short & medium range plans. They allocate resources and monitor performance of their subunits.

Operational Management: Operational Managers, Supervisors etc


They direct the use of resources and performance of tasks according to procedures and within budgets & schedules.

Attributes of Decision Making

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Information, Decisions & Management


Three Dimensions of Information Quality

Time

Content

Form

Information Quality Dimensions


Time Dimension : Timeliness Frequency Currency Time Period Content Dimension : Accuracy Relevance Completeness Performance

Information Quality Dimensions

Form Dimension :
Clarity Detail Order Presentation Media

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Management Information Systems [MIS]


MIS primarily provide information on the firms performance to help managers in monitoring & controlling the business. They typically produce fixed, regularly scheduled reports based on the data extracted and summarized from the organisations underlying TPS.

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Management Information System Reports


Scheduled Scheduled Reports Reports Exception Exception Reports Reports

Major Management Information Systems Reports

Demand Demand Reports Reports Push Push Reports Reports

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MIS Reports:
Periodic Scheduled Reports:
This traditional form of providing information to managers uses a prespecified format designed to provide managers with information on a regular basis. eg: Daily or weekly Sales Analysis Reports, Monthly Financial Statements.

Exception Reports:
These reports are produced only when exception occurs. In some cases, reports are produced periodically, but contain information only about these exceptional conditions. eg: Credit Managers can be provided with a report that contains only information on customers who exceed their credit limits.

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MIS Reports:
Demand Report:
Information is available only when a manager demands it. eg : Query Languages & Report Generators enable managers at PC workstations to get immediate responses or obtain customised reports as a result of their requests for the information they need.

Push Report:
Information is PUSHED to a managers networked workstation. eg: Many companies are using web casting software to selectively broadcast reports and other information to the networked PCs of managers and specialists over their corporate Intranets.

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MIS Examples:Organisation

MIS Application

California Pizza Kitchen

Inventory Express applications remember each restaurants ordering patterns and compares the amount of ingredients used per menu item to predefined portion measurements established by management. The system identifies restaurants with out-of-line portions and notifies their management so that corrective action can be taken.

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Decision Support Systems


DSS are computer based Information Systems that provide interactive information support to managers & business professionals during the decision making process.
DSS systems are :1. Analytical Models. 2. Specialized databases. 3. An Interactive computer based modeling process to support the making of semi structured & unstructured business decisions.

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Components of a DSS

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MODEL Driven DSS


Model Driven DSS were primarily stand alone systems isolated from major organisational Information systems that used some type of model to perform What-if analysis or Sensitivity analysis. Such systems were often developed by end user divisions or groups not under central Information system control. Their analysis capabilities were based on a strong theory or model combined with a good user interface that made the model easy to use.

Model Driven DSS

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What If ? Analysis
This analysis involves observing how changes to selected variables, or relationships among variables result into changes in the values of other variables. Eg If the Advertising Budget is cut by 10% - What would be the affect on Sales? This type of analysis would be repeated until the manager is satisfied with what results are revealed about affects of various possible decisions.

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Sensitivity Analysis
This analysis observes how repeated changes to a single variable affect other variables? Sensitivity analysis is a special case of What if? analysis where typically the value of only one variable is changed repeatedly and the resulting changes on other variables are observed. e.g. Lets cut advertising budget repeatedly by $100 so we can see its impact on sales?

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Goal Seeking Analysis


(How Can? Analysis)
This involves making repeated changes to select variables until a chosen variable reaches a target value. This reverses the direction of the analysis done in What if & Sensitivity analysis. eg. Lets try increasing the advertising budget until Sales reach $ 1 Million.

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Optimisation Analysis
This involves finding an optimum value for selected variables ( given certain constraints) Optimisation Analysis is more complex extension of Goal seeking analysis. Instead of setting a specific target value for one or more target variables, giving certain constraints. eg. Whats the best amount of adverting to have given our budget and choices of media?

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Online Analytical Processing


OLAP enables managers and analysts to interactively examine & manipulate large amounts of detailed & consolidated data from many perspectives. OLAP involves analyzing complex relationships among 1000s or even millions of data items stored in multi-dimensional databases to discover patterns, trends & exception conditions.

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Online Analytical Processing


Data is retrieved from corporate databases and staged in an OLAP multi-dimensional database

Client PC
OLAP OLAP Server Server

Corporate Databases

Web-enabled OLAP Software

Multidimensional database

Operational DB Data Marts Data Warehouse

OLAP analytical operations:-

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OLAP analytical operations:

Consolidation: Consolidation involves the aggregation of data. This can involve simple roll-ups or complex groupings.
eg SALES Data can be rolled up to DISTRICT level from OFFICE level.

Drill Down: OLAP can go in the reverse direction and automatically display detail data that comprise consolidated data. This process is called Drill Down.
eg SALES figures of Individual products.

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OLAP analytical operations:

Slicing & Dicing: Slicing & Dicing refers to the ability to look at the database from different viewpoints. eg
One Slice: of Sales database would be all sales of product type within all regions. Another Slice: of Sales database might show all sales channel within each product type.

Slicing & Dicing is often performed along a time axis in order to analyse trends & find time based patterns in the data.

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Components of a DSS DSS Database


DSS Database is a collection of current or

historical data from a number of applications. It may be a small database residing on a PC, combined with external data or a huge data warehouse. The data in DSS database are copies of Production databases so that using the DSS does not interfere with critical operational systems.

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Components of a DSS DSS Software System


It contains software tools that are used for data analysis. It contains : OLAP tools Data mining Tools

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Components of a DSS DSS User Interface


The DSS user interface permits easy interaction between users of the system and the DSS software Tools. A Graphical, Easy-to-use, flexible user interface supports a dialogue between the user & the DSS. DSS requires a high level of user participation to make sure that the system provides the information needed by the managers.

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Group Decision Support Systems


DSS focus primarily on Individual Decision Making. But much of the work is accomplished in Groups within groups, hence a special category of DSS has been developed to support group decision making GDSS.

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GDSS
A GDSS is an interactive computer based system to facilitate the solution of unstructured problems by a set of decision makers working together as a group. GDSS make meetings more productive by providing tools to facilitate planning, generating, organizing and evaluating ideas, establishing priorities & documenting meeting proceeding for others in organisations.

GDSS Components

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GDSS Components
Hardware: It includes : Electronic Hardware:

Electronic Display Boards Audio Visuals Computers Networking Equipments

Conference Facilities:
ROOM CHAIRS TABLES

Laid out in a manner that supports Group Collaboration

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GDSS Components
Software Tools:Although groupware tools for collaborative work can be used to support Group Decision Making, there are specific GDSS tools for supporting Group Meetings. These tools were originally developed for meetings in which all participants are in the same room, but they can be used for networked meetings in which participants are in different locations.

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GDSS Software TOOLS


Electronic Questionnaires Electronic Brain Storming Tools Idea Organizers Questionnaire tools Tools for voting or setting priorities Stakeholder Identification & Analysis Tools Policy Formation Tools Group Dictionaries

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Collaboration Laboratories
In a collaboration laboratory, individuals work on their own desktop PCs or workstations. Their Input is integrated on a file server and is viewable on a common screen to all participants. In most systems the integrated Input is also viewable on the individual participant's screen

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Electronic Meeting System


In an EMS :Each attendee has a workstation. The workstations are networked and connected to the facilitators console, which acts as Control panel for the meeting. Attendees have full control over their own desktop systems can work on PC tools or on the screen associated with current meeting agenda & tools. During the meeting, all input to the integrated screens is saved on the file server & the participants work is kept confidential. On completion of meeting, the full record of the meeting is available to anyone in need for access

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Overview of AI
Artificial Intelligence (AI) is a field of Science &

Technology based on disciplines such as


Computer Science Biology Linguistics Mathematics Engineering

The Goal of (AI) is to develop computers that can

Think Hear See Walk Talk Feel Like Humans

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Overview of AI
A Major thrust in is to develop computer functions

normally associated with Human Intelligence:

Reasoning Learning Problem Solving

Turing Test (Alan Turing 1950)

According to this test, a computer could demonstrate intelligence if a human interviewer conversing with an unseen human or an unseen computer could not tell which is which.

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AI Application Areas in Business


Neural Neural Networks Networks

Fuzzy Fuzzy Logic Logic Systems Systems Virtual Virtual Reality Reality

AI AIApplication Application Areas Areasin in Business Business

Expert Expert Systems Systems

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Neural Networks
Neural Networks are computing systems modeled

after the brains mesh-like network of interconnected processing elements called as neurons. Like the brain, the interconnected processors in a neural network operate in parallel and interconnect dynamically with each other, enabling the network to learn from data it processes.

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Neural Networks

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Neural Networks
A neural network can be trained to learn which

credit characteristics can lead to :


Good Loan Bad Loan

In the above example the developers of the

neural network can provide it with data from many examples of credit applications and loan results to process the knowledge in Neurons

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Fuzzy Logic Systems


Fuzzy Logic systems represents a small but gradually growing application of AI in business. Fuzzy Logic resembles Human reasoning as it allows approximate values and inferences and incomplete or ambiguous data instead of relying on crisp data such as Yes/No choices.

Fuzzy Logic Systems

Fuzzy Logic systems consist of:-

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Fuzzy Logic Systems Credit Analysis Application


Fuzzy Logic Rules If INCOME is INCREASING Then RISK is somewhat DECREASING If CASH RESERVES are LOW Then RISK is very INCREASED

Fuzzy Logic SQL Query

SELECT companies FROM database WHERE Revenues are very HIGH AND (Income/Total Employee) Ratio is Reasonable.

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Fuzzy Logic Systems


Notice that Fuzzy Logic uses terminology such as Very High, Increasing, Somewhat Decreasing. This enables Fuzzy Systems to process incomplete data and quickly provide approximate but acceptable solutions to problems that are difficult for other methods to solve.

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Virtual Reality
VR is a computer simulated reality, and is a fast

growing area of AI that had its origins in efforts to build more natural, multi sensory human computer interfaces. VR relies on multi sensory I/O devices such as
Tracking Headset with Video Goggles & Stereo phones. Data glove with fiber optic sensors that track your body movements. A Walker that monitors the movement of your feet.

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Virtual Reality

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Virtual Reality

Virtual Reality - Applications

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Expert Systems
A Knowledge Based Information System (KBIS) adds a knowledge base to the major components found in other types of CBIS. An Expert System (ES) is a KBIS that uses its knowledge about a specific complex application area to act as an expert consultant to end users. Expert Systems provide answers to questions in a very specific problem area by making human like inferences about knowledge contained in a specialized knowledge base.

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Components of Expert Systems


The Expert System
Expert Advice

User User Interface Interface Programs Programs

Inference Inference Engine Engine Program Program

Knowledge Base

User

Workstation

Expert System Development


Knowledge Engineering

Knowledge Knowledge Acquisition Acquisition Program Program Workstation


Expert and/or Knowledge Engineer

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Expert Systems - Components

Knowledge Base
1. Facts about a specific area 2. Heuristics (rules of thumb) that expresses the reasoning

procedures of an Expert on the subject.

Software Resources
1. Inference Engine 2. Software User Interface 3. Knowledge acquisition programs

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Expert System Applications


Decision DecisionManagement Management Diagnostic/Troubleshooting Diagnostic/Troubleshooting Maintenance/Scheduling Maintenance/Scheduling Design/Configuration Design/Configuration

Major Application Categories of Expert Systems

Selection/Classification Selection/Classification Process ProcessMonitoring/Control Monitoring/Control

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Expert Systems can be used to accomplish many business tasks:

Decision Management. This includes systems

that appraise situations or consider alternatives and make recommendations based on criteria supplied during the discovery process. Examples include loan portfolio analysis, employee evaluation, insurance underwriting, demographic forecasts.

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Expert Systems can be used to accomplish many business tasks: Diagnostic/Troubleshooting. This is the use of

systems that infer underlying causes from reported symptoms and history. Examples include equipment calibration, help desk operations, software debugging, medical diagnosis. Maintenance/Scheduling. This includes systems that prioritize and schedule limited or time-critical resources. Examples include maintenance scheduling, production scheduling, education scheduling, project management.

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Expert Systems can be used to accomplish many business tasks: Design/Configuration. This is the use of systems that help configure equipment components, given existing constraints that must be taken into account. Examples include computer option installation, manufacturability studies, communications networks, optimum assembly plan. Selection/Classification. These are systems that help users choose products or processes from among large or complex sets of alternatives. Examples include material selection, delinquent account identification, information classification, suspect identification.

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Expert Systems can be used to accomplish many business tasks: Process Monitoring/Control. This includes systems that monitor and control procedures or processes. Examples include machine control (including robotics), inventory control, production monitoring, chemical testing. Expert systems provide a business with faster, consistent expertise. They also help preserve organizational knowledge. However, they are not without limitations. ES are not suitable for every problem situation. They excel only in solving specific types of problems in a limited domain of knowledge. They fail to solve problems requiring a broad knowledge base. Expert Systems are also difficult and costly to develop and maintain.

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