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REVIEW FOR EXAM 3

REVIEW FOR EXAM 3. BUS3500 - Abdou Illia, Spring 2007. Information Systems For Decision-Making. Part 1. The Decision-Making Process. Simon’s model of the decision-making process Intelligence Design Choice. Intelligence Phase. Data source. Scan the environment for a problem.

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REVIEW FOR EXAM 3

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  1. REVIEW FOR EXAM 3 BUS3500 - Abdou Illia, Spring 2007

  2. Information Systems For Decision-Making Part 1

  3. The Decision-Making Process • Simon’s model of the decision-making process • Intelligence • Design • Choice

  4. Intelligence Phase Data source • Scan the environment for a problem. • Determine if decision-maker can solve the problem. • Within scope of influence • Fully define the problem by gathering more information about the problem. Scan Environment forproblem to be solvedor decision to be made MIS Problem ? No END Yes Problem within scope of influence? No END Gather more informationabout the problem Internal & External data

  5. Design Phase • Develop a model of the problem. • Determine type of model. • Verify model. • Develop and analyze potential solutions. Develop a model ofproblem to be solved Verify that the model is accurate Develop potentialsolutions

  6. Choice Phase • Select the solution to implement. • More detailed analysis of selected solutions might be needed. • Verify initial conditions. • Analyze proposed solution against real-world constraints.

  7. Decision Support Systems • Designed to help individual managers make decisions • Major components • Data management subsystem • Internal and external data sources • Model management subsystem • Typically mathematical in nature • User interface • How the people interact with the DSS • Data visualization is the key • Text • Graphs • Charts UserInterface Model Management - Sensitivity Analysis -> What-if Analysis -> Goal-seeking Analysis Data Management - Transactional Data- Data warehouse- Business partners data- Economic data

  8. Modeling Tools and Techniques • Simulation • Used to examine proposed solutions and their impact • Sensitivity analysis • Determine how changes in one part of the model influence other parts of the model • What-if analysis • Manipulate variables to see what would happen in given scenarios • Goal-seeking analysis • Work backward from desired outcome Determine monthly payment given various interest rates. Works backward from a given monthly payment to determine various loans that would give that payment.

  9. Groups Decision Support Systems • DSS designed to help groups make decisions with the help of a Group Facilitator • GDSS Tools: • Brainstorming tools: Allow users enter ideas simultaneously & anonymously • Commenter tools:Allow users to anonymously comment on others’ ideas • Categorizing tools: Groups ideas into categories • Idea-ranking tools: Ranks ideas. Identify the best ones. • Electronic-voting tools: Allow users to vote for their favorite ideas. Front Screen GDSS tools

  10. Executive Information Systems • Computer-based tool that specifically helps top-level management make strategic decisions • Processes both internal and external data • Presents data in summary form • Drill-down is a key feature – gives the manager the ability to see more details when needed

  11. KWS. Expert Systems • AI systems that codify human expertise in a computer system • Main goal is to transfer knowledge from one person to another • Wide range of subject areas • Medical diagnosis • Computer purchasing • Knowledge engineer elicits the expertise from the expert and encodes it in the expert system

  12. Example of rules IFfamily is albatross ANDcolor is white THENbird is laysan albatross. IFfamily is albatross ANDcolor is dark THENbird is black footed albatross Expert Systems Components • Knowledge base: database of the expertise, often in IF THEN rules. • Inference engine: derives recommendations from knowledge base and problem-specific data • User interface: controls the dialog between the user and the system • Explanation system: Explain the how and why of recommendations User Domain Expert UserInterface Expertise System Engineer InferenceEngine Knowledge Engineer Encoded expertise Knowledgebase ExplanationSystem

  13. Summary Questions Note: the numbers refer to the slide numbers in the Powerpoint class notes, NOT in these review notes.

  14. Review Questions • Make sure you can answer the questions in Chapter 8 Exercise available in the Notes’ section of the course web site. Direct link: Chapter 8 Exercise.

  15. Information Systems For Business Integration Part 2

  16. Business Integration? Suppliers Integration Vertical ProductionDepartment SalesDepartment LogisticsDepartment HorizontalIntegration Customers

  17. Process1 Process1 Process1 Process1 Process1 Process1 Process2 Process2 Process2 Process2 Process2 Process2 Systems for Horizontal Integration • Enterprise Resource Planning (ERP) systems • integrate all the internal processes through a common information system ERP system ProductionDepartment Warehousing SalesDepartment LogisticsDepartment CommonDatabase MarketingDepartment AccountingDepartment

  18. Integrating Internal Processeswith ERP • ERP systems integrate all the functions and departments within an organization through a common information system • Most common modules for an ERP system • Finance • Manufacturing: helps from product development to production • Human resources: Handles all HR functions • Procurement: helps manage the purchase of office supply & raw material • Marketing: manage relationship with customers • ERP mainly used by medium and large businesses • Average lifetime cost: $15 Million (in 2003) • Implementation process: up to 5 years • Up to 50% ERP implementation projects fail

  19. Process1 Process1 Process1 Process2 Process2 Process2 ProductionDepartment SalesDepartment DeliveryDepartment Vertical Integration with suppliers • Possible problems: • Raw material shortage • Receiving more raw material than needed • Etc. Suppliers Lack of good integration Company’s Internal processes Q: What kind of solution can provide business integration in this specific case?

  20. Process1 Process1 Process1 Process2 Process2 Process2 ProductionDepartment SalesDepartment DeliveryDepartment Systems for Vertical Integration • Electronic Data Interchange (EDI): • Direct computer-to-computer transfer of business documents in electronic form Suppliers Value Added Network (VAN)orPrivate network connection EDI System Company’s Internal processes

  21. Electronic Data Interchange (EDI) • Allows automatic transfer of electronic order forms and their automatic processing • EDI relies on a pair of message standards • ANSI X12 – used in North America • EDIFACT – international, but widely used in Europe • Advantages: • Eliminates paperwork • Reduces errors • Speeds supply process • Disadvantages: • Provides connection only between two companies • Limits freedom of comparing prices.

  22. Suppliers Three main functions Process1 Process1 Process1 Process2 Process2 Process2 - Forecast demand- Handle purchase of supply- Manage storage + shipping SCM System Company’s Internal processes ProductionDepartment SalesDepartment DeliveryDepartment Systems for Vertical Integration • Supply chain management (SCM) system • provide a direct electronic connection with suppliers Network connection

  23. Company’s Internal processes Process1 Process1 Process1 Process2 Process2 Process2 ProductionDepartment SalesDepartment DeliveryDepartment Vertical Integration with customers • Possible problems: • Out of product • Poor customer support • Etc. Lack of good integration Customers Q: What kind of solution can provide business integration in this specific case?

  24. Systems for Vertical Integration • Customer Relationship Management (CRM) • information system to manage all the functions that deal with customers • Goal of CRM is to increase sales and repeat business by learning the customer • Remember the customer’s needs and preferences • Determine the customer’s satisfaction with service • Determine which customers are in the magic 20 percent (or have the potential to become part of it)

  25. Summary Questions

  26. Review Questions • Make sure you can answer the questions in Chapter 9 Exercise available in the Notes’ section of the course web site.

  27. Managing the Development and Purchase of IS Part 3

  28. Traditional Systems Development Life Cycle (SDLC) Planning Analysis • Seven phases • Planning 5) Testing • Systems Analysis 6) Implementation • Systems Design 7) Maintenance • Development • Typically one phase needs to be completed before beginning the next • Problem in later phase may require return to previous phase Design Development Testing Implementation Maintenance

  29. SDLC: Recap

  30. Summary Questions + Make sure you check the Chapter 11 Exercise (1) available in the Notes’ section of the course web site.

  31. Managing Security Part 4

  32. Summary Questions

  33. Review Questions • Make sure you can answer the questions in Chapter 12 Exercise available in the Notes’ section of the course web site.

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