Chapter 9
Information, Decision
Support…
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Please discontinue use of cell
phone and turn off ringer
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Decision Making and Problem Solving
Management Information Systems
Decision Support Systems
Group Decision Support Systems
Hybrid and Special-Purpose Systems
Computer Strengths
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Information Systems
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Information System Types
• Expert System (ES)
• Decision Support System (DSS)
• Management Information System (MIS)
• Transaction Processing System (TPS)
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Transaction Processing
System
 A TPS is an information system used
to support and record transactions.
E-commerce
Transactions carried
out online, over the
Internet or other
telecommunications
network.
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Architecture of a TPS
6
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MIS: The Big Picture
 MIS provides information about the
performance of an organization
 Think of entire company (the firm) as
a system.
 An MIS provides management with
feedback
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MIS: Feedback for a Firm
 Q: How are we doing?
 A: Look at the report from the MIS
Generic reports: Sales, Orders, Schedules, etc.
Periodic: Daily, Weekly, Quarterly, etc.
Pre-specified reports
 Obviously, such reports are useful for
making good decisions.
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MIS Input and Output
Corporate
Databases
Transactions
Database
Scheduled
reports
in
External
Databases
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MIS
out
Demand
reports
Exception
reports
Typical MIS Reporting
 Periodic Scheduled Reports
Example: Monthly Financial Statements
 Exception Reports
Example: List of items out of stock
 These reports contain information but they
might not directly help you determine the
best decision to make.
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More MIS Reports
 Demand Reports
 Available whenever a manager needs them, updated in
real-time.
 Push Reporting
 Information is pushed to a managers computer
 Example: Report is pushed every time a supplier is late with
a shipment
 MIS Reporting is all about giving managers
feedback and doesn’t necessarily help directly with
decision making.
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Decision Support System
 A DSS is an information system used to
support problem-specific decision-making.
www.progressive.com
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Architecture of a DSS
13
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How is a DSS different?
MIS
 Periodic reports
DSS
 Special reports that may only
be generated once
 Pre-specified,
generic reports
 May not know what kind of
report to generate until the
problem surfaces; specialized
reports.
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MIS vs. DSS: Big Differences
In a DSS, a manager generates the
report through an interactive interface
Flexible & Adaptable reports
DSS Reporting is produced through
analytical modeling, not just computing
an average, or plotting a graph.
Business Models are programmed into a
DSS
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How is DSS reporting different?
Modeling helps predict the outcome of
a decision.
This directly helps you make a decision
Possibly an optimal decision
With a DSS you can explore possible
alternatives.
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MIS vs. DSS
MIS
DSS
Support
Info about
performance
Info and modeling to
analyze problems
Report
Form
Periodic reports
or On Demand
Pre-specified
Fixed format
Interactive Inquiries
Processing Extract and
manipulate data
Analytical modeling
of data
Format
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Flexible and Adaptable
Expert System
 An ES is an
information
system that
utilizes AI
techniques to
make
suggestions
and reach
conclusions in
one particular
area of
expertise.
http://www.aiinc.ca/demos/whale.html
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Decision Support vs. Artificial
Intelligence
Helps you analyze information
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Makes or recommends a decision
for you
2. Artificial Intelligence
Simulation of human
intelligence
Reasoning, learning,
sensing, hearing, walking,
talking, etc.
AI systems deliver the
conclusion rather than
helping you analyze the
options
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Is Nicholas’ robot
“intelligent”? Will it
become “intelligent” over
the summer?
Be wary of “Artificial”
anything?
Intelligent Systems
Three types
Expert systems
Neural networks
Intelligent agents
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Expert Systems
 Typically comprised of 2 operations:
Gather input
Asks a series of questions
Sensory input
Perform inferencing
Statistical pattern matching
Predefined rules
 An example
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An expert system can
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Reduce errors
Improve customer
service
Reduce cost
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An expert system can’t
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Use common sense
Automate all processes
Learn and adapt like neural networks
Neural Network System
 Approximation of human brain functioning
 Training to establish common patterns
Past information
 New data compared to patterns
E.g., loan processing
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Can you recognize patterns
and be trained?
 You see a new breed
of dog
 How do you know it is
dog?
 How do you know it is
even an animal?
 How do you know if an
animal is a mammal?
 How about a whale?
 How about a platypus?
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Example: Neural Network System
Loan
processing
system
relying on a
neural
network
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Typical Neural Network
Structure
A Simulation
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Intelligent Agent Systems
 Program working in the background
 Bot (software robot)
 Provides service when a specific
event occurs
 More about software agents
 Chat with Alice
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Review: What do they do?
Give a one sentence description of
each term below:
TPS
MIS
DSS
Expert System
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Enterprise Resource Planning
 ERP: integrates all data processing in an
enterprise into one unified system that draws
from a common database system.
ERP
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Traditional View of Systems
Business Functions
Accounting
Finance
Marketing and
Sales
Human
Resources
Business
Processes
Business
Processes
Business
Processes
Business
Processes
Business
Processes
Manufacturing
Systems
Accounting
Systems
Finance
Systems
Marketing and
Sales Systems
Human
Resources
Systems
Vendors
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Information Systems
Organizational
Boundaries
Organizational
Boundaries
Manufacturing
Customers
Enterprise Systems
Manufacturing
Accounting
Human
Resources
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Business Process
Business Process
Business Process
Enterprise-wide business
processes
Sales and
Marketing
Organizational
Boundaries
Vendors
Organizational
Boundaries
Enterprise System
Customers
Finance
Benefits and Challenges of
Enterprise Systems
 Benefits
Firm structure and organization: One Organization
Management: Firm wide Knowledge-based
Management Processes
Technology: Unified Platform
Business: More Efficient Operations and
Customer-driven Business Processes
 Challenges
Daunting Implementation
High Up-front Costs and Future Benefits
Inflexibility
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9.5
Hybrid and SpecialPurpose Systems
Key Terms
• Knowledge Management System
• Geographic information system (GIS)
• Informatics
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Knowledge Management
System
 A knowledge management
(KM) system assists an
organization in capturing,
storing, and distributing
knowledge for use and reuse
by the organization and
sometimes by its partners and
customers.
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Question
What is the difference between “data”,
“information”, “knowledge” and
“wisdom”?
Can one be created from the previous?
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Data: A key component of information
systems
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