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Decision support systems and business intelligence
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Transcript of Decision support systems and business intelligence
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Decision Support systems and Business Intelligence
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• Business environment is becoming more and more complex and rapidly changing, making decision making more difficult
• Must respond and adapt by making faster and better decision.
• Intuition may not be enough, hence computerised systems are required.
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• "Business Intelligence is a set of methodologies, processes, architectures, and technologies that transform raw data into meaningful and useful information used to enable more effective strategic, tactical, and operational insights and decision-making."[6]
• 1958 researcher conned this term intelligence, IBMs hans peter Luhn "the ability to apprehend the interrelationships of presented facts in such a way as to guide action towards a desired goal."[4]
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Car company case scenario
• car company fictitious case:• car logistics • problem:increasing costs• increasing issues, delays , data entry errors. some
issues resolved with data analysis• more managers could see problems of overbilling
and delays• sample indicates: multiple things: flow of
information, fast decisions, vast amounts of data, collaboration:
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The Business Environment
• because of the modern factors, decision making is become complex requiring knowledge of business, data, data representation; hence a computerized system is required.
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Different actions taken by managers to counter
the pressure:
• Employee strategic planning
• Use new and innovative business models
• Restructure business processes
• Participate in business alliances
• Improve corporate information system
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• Improve partnership relationships
• Encourage innovation and creativity
• Improve customer service and relationships
• Move to electronic commerce(e-commerce)
• Move to make-to-order production and on-demand manufacturing and services
• Use new IT to improve communication, data access(discovery of information)
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• Respond quickly to competitor’s actions(e.g. in pricing, promotion, new products and services)
• Automate many tasks of white-collar employees
• Automate certain decision processes, especially those dealing with customers
• Improve decision making
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Why we use computerized Decision Support System
• Speedy computations
• Improved communication and collaboration
• Increased productivity of group members
• Improved data management
• Managing giant data warehouses
• Quality support
• Agility support
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• Overcoming cognitive limits in processing and storing information
• Using the web
• Anywhere, anytime support
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Decision Support Frameworks(goryand scott morton[1971]
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Simon’s Decision Making Process
• Decision making process:
Intelligence(searching for conditions
•Design
•Choice
•Implementation
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Computerized Decision Support
• Computer support for Structured decision
-Automated Decision making(rulebased system, price determination; loan or not, price optimsation)
• Computer support for unstructured decision
• Computer support for semi structured problems
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Automated Decision-Making Framework
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Decision Support System(DSS)
• “Decision support system couple the intellectual resources of individuals with the capabilities of the computer to improve the quality of decisions. It is a computer-based support system for management decision makers who deal with semi structured problems”
-By Keen and Scott-Morton(1978)
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Architecture of DSS
• Types of DSS
1.Model-oriented DSS
2.Data-oriented DSS
1 – model is quantitative
D- data oriented : adhocqueries and reporting
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Framework for Business Intelligence(BI)
What is BI?• An umbrella that combines architectures, tools,
database, analytical tools, applications and methodologies.
• Content-free expression• Objective:1.To enable interactive access to data
2.To enable manipulation of data3.To give managers & analyst the ability
to conduct appropriate analysis.
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The Architecture of BI
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Components Of BI system
BI system has four major components:
• Data warehouse: Source data
• Business Analytics: a collection of tools for manipulating, mining, and analyzing the data in the data warehouse
• Business performance management: for monitoring & analyzing performance
• User interface: Dashboard & other information broadcasting tools
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Benefits of BI
The major benefits of BI:• Faster, more accurate reporting• Improved decision making• Improved customer service• Increased revenueApart from these, there are several other like-• Time saving• Single version of the “truth”• Better strategies and plans• More efficient process
• Cost saving
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Bperformance mgmt
• Adds management and feedback to core BI
• Top – bottm process
• Balanced scorecard and dashboards
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Summary• Similar architecture because BI evolved from DSS.• DSS are constructed to directly support specific
decision making while BI are for indirect support.• BI has an executive & strategic orientation while DSS is
oriented toward analyst.• BI are constructed with commercially available tools &
components while DSS is constructing solutions to unstructured problems.
• DSS were mostly in the academic world.BI were developed by software companies.
• Many of the tools that BI uses are also considered DSS tools.
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Management Support System
• Combination of DSS and BI tools.
• Technology that supports managerial tasks in general and decision making in particular.
• MSS use when the nature of the technology involved is not clear, and use it interchangeably with the combined term DSS/BI.
• Vendor names: Microstrategy, microsoft, IBM, oracle, Hyperion, cognos, Business objects,SAS,exsys,SAP
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Work system view
• Remove systems from DSS
• Improve decision making
• Alter(2004)
Process, particpants, info,tech,product,customers.infra,environment,strategy
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• Case study on microstrategy
• Microsoft BI offering