Decision support systems and business intelligence

Decision
Support
systems
and
Business
Intelligence

• Business
environment
is
becoming
more
and
more
complex
and
rapidly
changing,
making
decision
making
more
difficult
• Must
respond
and
adapt
by
making
faster
and
be<er
decision.
• Intui?on
may
not
be
enough,
hence
computerised
systems
are
required.

• "Business
Intelligence
is
a
set
of
methodologies,
processes,
architectures,
and
technologies
that
transform
raw
data
into
meaningful
and
useful
informa?on
used
to
enable
more
effec?ve
strategic,
tac?cal,
and
opera?onal
insights
and
decision-‐making."[6]
• 1958
researcher
conned
this
term
intelligence,
IBMs
hans
peter
Luhn
"the
ability
to
apprehend
the
interrela?onships
of
presented
facts
in
such
a
way
as
to
guide
ac?on
towards
a
desired
goal."[4]

Car
company
case
scenario
• car
company
fic??ous
case:
•
car
logis?cs
• 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:
mul?ple
things:
flow
of
informa?on,
fast
decisions,
vast
amounts
of
data,
collabora?on:

The
Business
Environment
• because
of
the
modern
factors,
decision
making
is
become
complex
requiring
knowledge
of
business,
data,
data
representa?on;
hence
a
computerized
system
is
required.

Different
ac;ons
taken
by
managers
to
counter
the
pressure:
• Employee
strategic
planning
• Use
new
and
innova?ve
business
models
• Restructure
business
processes
• Par?cipate
in
business
alliances
• Improve
corporate
informa?on
system
Con?nue…

• Improve
partnership
rela?onships
• Encourage
innova?on
and
crea?vity
• Improve
customer
service
and
rela?onships
• Move
to
electronic
commerce(e-‐commerce)
• Move
to
make-‐to-‐order
produc?on
and
on-‐
demand
manufacturing
and
services
• Use
new
IT
to
improve
communica?on,
data
access(discovery
of
informa?on)
Con?nue…

• Respond
quickly
to
compe?tor’s
ac?ons(e.g.
in
pricing,
promo?on,
new
products
and
services)
• Automate
many
tasks
of
white-‐collar
employees
• Automate
certain
decision
processes,
especially
those
dealing
with
customers
• Improve
decision
making

Why
we
use
computerized
Decision
Support
System
• Speedy
computa?ons
• Improved
communica?on
and
collabora?on
• Increased
produc?vity
of
group
members
• Improved
data
management
• Managing
giant
data
warehouses
• Quality
support
• Agility
support
Con?nue….

• Overcoming
cogni?ve
limits
in
processing
and
storing
informa?on
• Using
the
web
• Anywhere,
any?me
support

Decision
Support
Frameworks(gory
and
scoD
morton[1971]

Simon’s
Decision
Making
Process
• Decision
making
process:
Intelligence
(searching
for
condi?ons
•
Design
•
Choice
•
Implementa?on

Computerized
Decision
Support
• Computer
support
for
Structured
decision
-‐Automated
Decision
making(rule
based
system,
price
determina?on;
loan
or
not,
price
op?msa?on)
• Computer
support
for
unstructured
decision
• Computer
support
for
semi
structured
problems

Automated
Decision-‐Making
Framework

Decision
Support
System(DSS)
• “Decision
support
system
couple
the
intellectual
resources
of
individuals
with
the
capabili?es
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
Sco<-‐Morton(1978)

Architecture
of
DSS
• Types
of
DSS
1.Model-‐oriented
DSS
2.Data-‐oriented
DSS
1
–
model
is
quan?ta?ve
D-‐
data
oriented
:
adhoc
queries
and
repor?ng

Framework
for
Business
Intelligence
(BI)
What
is
BI?
• An
umbrella
that
combines
architectures,
tools,
database,
analy?cal
tools,
applica?ons
and
methodologies.
• Content-‐free
expression
• Objec?ve:1.To
enable
interac?ve
access
to
data
2.To
enable
manipula?on
of
data
3.To
give
managers
&
analyst
the
ability
to
conduct
appropriate
analysis.

Components
Of
BI
system
BI
system
has
four
major
components:
• Data
warehouse:
Source
data
• Business
Analy2cs:
a
collec?on
of
tools
for
manipula?ng,
mining,
and
analyzing
the
data
in
the
data
warehouse
• Business
performance
management:
for
monitoring
&
analyzing
performance
• User
interface:
Dashboard
&
other
informa?on
broadcas?ng
tools

Benefits
of
BI
The
major
benefits
of
BI:
• Faster,
more
accurate
repor?ng
• Improved
decision
making
• Improved
customer
service
• Increased
revenue
Apart
from
these,
there
are
several
other
like-‐
• Time
saving
• Single
version
of
the
“truth”
• Be<er
strategies
and
plans
• More
efficient
process
• Cost
saving

Bperformance
mgmt
• Adds
management
and
feedback
to
core
BI
• Top
–
bo<m
process
• Balanced
scorecard
and
dashboards

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
execu?ve
&
strategic
orienta?on
while
DSS
is
oriented
toward
analyst.
• BI
are
constructed
with
commercially
available
tools
&
components
while
DSS
is
construc?ng
solu?ons
to
unstructured
problems.
• DSS
were
mostly
in
the
academic
world.BI
were
developed
by
solware
companies.
• Many
of
the
tools
that
BI
uses
are
also
considered
DSS
tools.

Management
Support
System
• Combina?on
of
DSS
and
BI
tools.
• Technology
that
supports
managerial
tasks
in
general
and
decision
making
in
par?cular.
• 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,
microsol,
IBM,
oracle,
Hyperion,
cognos,
Business
objects,SAS,exsys,SAP

Work
system
view
• Remove
systems
from
DSS
• Improve
decision
making
• Alter(2004)
Process,
par?cpants,
info,tech,product,customers.infra,environmen
t,strategy

• Case
study
on
microstrategy
• Microsol
BI
offering

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