CHAPTER 9

Chapter 9 – Enabling the Organization-Decision Making

Decision Making

:)  Reasons for Growth of Decision Making Information System

       - People need to analyze large amounts of information – Improvements in technology itself, innovations in communication, and globalization have resulted in a dramatic increase in the alternatives and                   dimensions people need to consider when making a decision or appraising an opportunity

       - People must make decisions quickly – Time is of the essence and people simply do not have time to               sift through all the information manually

      -  People must apply sophisticated analysis techniques, such as modeling and forecasting, to  make good           decisions – Information systems substantially reduce the time required to perform these sophisticated             analysis techniques

      -  People must protect the corporate asset of organizational information – Information systems offer the              security required to ensure organizational information remains safe.

:)  Model – A simplified representation or abstraction of reality

:)  IT systems in an enterprise

Transaction Processing System

:)  Moving up through the organizational pyramid users move from requiring transactional information to analytical information

:)  Transaction processing system – the basic business system that serves the operational level (analysis) in an organization

:)  Online transaction processing (OLTP) – the capturing of transaction and event information using technology to (1) process the information according to defined business rules, (2) store the information, (3) update existing information to reflect the new information

:)  Online analytical processing (OLAP) – the manipulation of information to create business intelligence in support of strategic decision making

Decision support systems

:)  Decision support system (DSS) – models information to support managers and business professionals during the decision-making process

:)  Three quantitative models used by DSSs include;

1.       Sensitivity analysis – the study of the impact that changes in one (or more) parts of the model have on other parts of the model

2.       What-if analysis – checks the impact of a change in an assumption on the proposed solution

3.       Goal-seeking analysis – finds the inputs necessary to achieve a goal such as a desired level of outputs

                           What-if analysis

                            Goal-seeking analysis

Executive information system

:)  Executive information system (EIS) – A specialized DSS that supports senior level executives within the                                                                  organization

:)  Most EISs offering the following capabilities;

- Consolidation – involves the aggregation of information and features simple roll-ups to complex                                              groupings of interrelated information

- Drill-down – enables users to get details, and details of information

- Slice-and-dice – looks at information from different perspectives

  Interaction between a TPS and an EIS

  Interaction between a TPS and a DSS

 

:) Digital dashboard – integrates information from multiple components and presents it in a united display

                                  Artificial intelligence (AI)

:)  The ultimate goal of AI is the ability to build a system that can mimic human intelligence

:)  Intelligent system – various commercial applications of artificial intelligence

:)  Artificial intelligence (AI) – simulates human intelligence such as the ability to reason and learn

:)  Four most common categories of AI include;

   1.Expert system – computerized advisory programs that imitate the reasoning processes of experts in                                         solving difficult problems

   2. Neural network – attempts to emulate the way the human brain works

                                  o   Fuzzy logic – a mathematical method of handling imprecise or subjective                                                                             information

   3. Genetic algorithm – an artificial intelligent system that mimics the evolutionary, survival-of-the-fittest                                             process to generate increasingly better solutions to a problem

   4. Intelligent agent – special-purposed knowledge-based information system that accomplishes specific                                          tasks on behalf of its users

Data Mining

:)  Data-mining software includes many forms of AI such as neutral networks and expert systems

CHAPTER 8

Chapter 8 – Accessing Organizational Information – Data Warehouse

What is Data Warehouse?

:)  Defined in many different ways, but not rigorously

-    A decision support database that is maintained separately from the organization’s operational   database.

-    A consistent database source that bring together information from multiple sources for decision support       queries.

-  Support information processing by providing a solid platform of consolidated, historical data for analysis.

History of Data Warehousing

:)  In the 1990’s executives became less concerned with the day-to-day business operations and more concerned with overall business functions

:) The data warehouse provided the ability to support decision making without disrupting the day-to-day operations, because;

-          Operational information is mainly current – does not include the history for better decision making

-          Issues of quality information

-          Without information history, it is difficult to tell how and why things change over time

Data warehouse fundamentals

:) Data warehouse – A logical collection of information – gathered from many different operational databases – that supports business analysis activities and decision-making takes

:)  The primary purpose of a data warehouse is to combined information throughout an organization into a single repository for decision-making purposes – data warehouse support only analytical processing

Data warehouse model

:)  Extraction, transformation and loading (ETL) – A process that extracts information from internal and external databases, transforms the information using a common set of enterprise definitions, and loads the information into a data warehouse.

:)  Data warehouse then send subsets of the information to data mart.

:)  Data mart – contains a subset of data warehouse info

Multidimensional Analysis and Data Mining

:)  Relational Database contains information in a series of two-dimensional tables.

:)  In a data warehouse and data mart, information is multidimensional, it contains layers of columns and rows

-          Dimension – A particular attribute of information

:)  Cube – common term for the representation of multidimensional information

:)  Once a cube of information is created, users can begin to slice and dice the cube to drill down into the information.

:)  Users can analyze information in a number of different ways and with number of different dimensions.

:)  Data Mining – the process of analyzing data to extract information not offered by the raw data alone. Also known as “knowledge discovery” – computer-assisted tools and techniques for sifting through and analyzing vast data stores in order to finds trends, patterns and correlations that can guide decision making and increase understanding

:)  To perform data mining users need data-mining tools

     - Data-mining tool – uses a variety of techniques to finds patterns and relationships in large volumes of information. Eg: retailers and use knowledge of these patterns to improve the placement of items in the layout of a mail-order catalog page or Web page.

Information Cleansing or Scrubbing

:)  An organization must maintain high-quality data in the data warehouse

:)  Information cleansing or scrubbing – A process that weeds out and fixes or discards inconsistent,                   incorrect or incomplete information

:)  Occurs during ETL process and second on the information once if is in the data warehouse

:)  Contract information in an operational system

:)  Standardizing Customer  name from Operational Systems

:)  Information cleansing activities

-          Missing Records or Attributes

-          Redundant Records

-          Missing Keys or Other Required Data

-          Erroneous Relationships or References

-          Inaccurate Data

Business Intelligence

:)  Business Intelligence – refers to applications and technologies that are used to gather, provides access, analyze data and information to support decision making efforts

:)  These systems will illustrate business intelligence in the areas of customer profiling, customer support, market research, market segmentation, product profitability, statistical analysis, and inventory and distribution analysis to name a few

:)  Eg; Excel, Access

CHAPTER 7

Chapter 7 - Storing Organizational Information - Database

RELATIONAL DATABASE FUNDAMENTALS

  

 -    Information is everywhere in an organization

 -  Information is stored in databases

::)   Database – maintains information about various types of objects (inventory), events (transactions), people (employees), and places (warehouses)

 -     Database models include;

::)  Hierarchical database model – information is organized into a tree-like structure (using parent/child relationships) in such a way that it cannot have too many relationships.

:)  Network database model – a flexible way of representing objects and their relationships

::) Relational database model – stores information in the form of logically related two-dimensional tables

ENTITIES AND ATTRIBUTES

-    Entity – a person, place, thing, transaction, or event about which information is stored

:)  The rows in each table contains the entities

-    Attributes (fields, columns) – characteristics or properties of an entity class

:) The columns in each table contain the attributes

KEYS AND RELATIONSHIPS

-    Primary keys and foreign keys identity the various entity classes (tables) in the database

:)  Primary key – a fields (or group of fields) that uniquely identities a given entity in a table

:)  Foreign key – a primary key of one table that appears an attribute in another table and acts to provide a logical relationships among the two tables 

RELATIONAL DATABASE ADVANTAGES

-    Database advantages from a business perspective include;

:) Increased flexibility

:)  Increased scalability and performance

:)  Reduced information redundancy

:)  Increased information integrity (quality)

:)  Increased information security

INCREASED FLEXIBILITY

-     A well-designed database should;

:)  Handle changes quickly and easily

:)  Provide users with different views

:)  Have only one physical views

:)  Physical view – deals with the physical storage of information on a storage device

:)  Have multiple logical views

:)  Logical view – focuses on how users logically access information

INCREASED SCALABILITY AND PERFORMANCE

-    A database must scale to meet increased demand, while maintaining acceptable performance levels

:)  Scalability – refers to how well a system can adapt to increased demands

:)  Performance – measures how quickly a system performs a certain process or transaction

REDUCED INFORMATION REDUNDANCY

-      Databases reduce information redundancy

:)  Redundancy – the duplication of information or storing the same information in multiple places

-     Inconsistency is one of the primary problems with redundant information

INCREASED INFORMATION SECURITY

-      Information is an organization asset and must be protected

-      Databases offer several security features including;

:) Password – provides authentication of the user

:) Access level – determines who has access to the different types of information

:) Access control – determines types of user access, such as read-only access

 DATABASE MANAGEMENT SYSTEMS

-     Database management systems (DBMS) – software through which users and application programs interact with a database

DATA-DRIVEN WEB SITES

-       Data-driven Web sites – an interactive Web site kept constantly updated and relevant to the needs of its   customers through the use of database

DATA-DRIVEN WEB SITE BUSINESS ADVANTAGES

-         Development

-         Content Management

-         Future Expandability

-         Minimizing Human Error

-         Cutting Production and Update Costs

-         More Efficient

-         Improved Stability

CHAPTER 6

CHAPTER 6 :Valuing Organizational Information

                 ORGANIZATIONAL INFORMATION

·     Information is everywhere in an organization

·          Employees must be able to obtain and analyze the many different levels, formats           and granularity of organizational information to make decisions

·         Successfully collecting, compiling, sorting and analyzing information can provide            tremendous insight into how an organization is performing

·     Levels, formats and granularity of organizational information

                 THE VALUE OF TIMELY INFORMATION

-   Timeliness is an aspect of information that depends on the situation

-   Real-time information – immediate, up-to-date information

-   Real-time system – provides real-time information in response to query requests

                 THE VALUE OF QUALITY INFORMATION

-    Business decisions are only as good as the quality of the information used to make the          decisions

-   You never want to find yourself using technology to help you make a bad decision faster

-   Characteristics of high-quality information include;

                UNDERSTANDING THE COSTS OF POOR INFORMATION

-   The four primary sources of low quality information include;

- Online customers intentionally enter inaccurate information to protect their privacy 

- Information from different systems have different entry standards and formats 

- Call center operators enter abbreviated or erroneous information by accident or to save time 

- Third party and external information contains inconsistencies, inaccuracies and errors

-   Potential business effects resulting from low quality information include;

- Inability to accurately track customers

- Difficulty identifying valuable customers 

- Inability to identify selling opportunities 

- Marketing to nonexistent customers 

- Difficulty tracking revenue due to inaccurate invoices 

- Inability to build strong customer relationships

UNDERSTANDING THE BENEFITS OF GOOD INFORMATION

-   High quality information can significantly improve the chances of making a good decision

-   Good decisions can directly impact an organization’s bottom line

CHAPTER 5

Chapter 5 – Organizational Structures that Support Strategic Initiatives

ORGANIZATIONAL STRUCTURE 

:) Organizational employees must work closely together to develop strategic initiatives that create                      competitive advantages

:) Ethics and security are two fundamental building blocks that organizations must base their businesses upon.

INFORMATION TECHNOLOGY ROLES AND RESPONSIBILITIES

:) Information technology is a relatively new functional area, having only been around formally for around 40 years.

Recent IT – related strategic positions:

                -   Chief Information Officer (CIO)

                -   Chief Technology Officer (CTO)

                -   Chief Security Officer (CSO)

                -   Chief Privacy Officer (CPO)

                -   Chief Knowledge Officer (CKO)

Chief Information Officer (CIO) – oversees all uses of IT and ensures the strategic alignment of IT with business goals and objectives.

-  Broad CIO functions include;

 :)Manager – ensuring the delivery of all IT projects, on time and within budget.

 :)Leader – ensuring the strategic vision of IT is in line with the strategic vision of the organization.

 :)Communicator – building and maintaining strong executive relationships.

Average CIO compensation by industry

   

Industry	Average CIO Compensation
Wholesale/Retail/Distribution	$ 243,304
Finance	$ 210,547
Insurance	$ 197,697
Manufacturing	$ 190,250
Medical/Dental/Health Care	$ 171,032
Government	$ 118,359
Education	$   93,750

·         What concerns CIOs the most

Percentages %	CIOs Concerns
94	Enhancing customer satisfaction
92	Security
89	Technology evaluation
87	Budgeting
83	Staffing
66	ROI analysis
64	Building new applications
45	Outsourcing hosting

:) Chief Technology Officer (CTO) – responsible for ensuring the throughput , speed, accuracy,                        availability and reliability of IT

:) Chief Security Officer (CSO) – responsible for ensuring the security of IT systems

:) Chief Privacy Officer (CPO) – responsible for ensuring the ethical and legal use of information

:)Chief Knowledge Officer (CKO) – responsible for collecting, maintaining and distributing the organization’s    knowledge

 

THE GAP BETWEEN BUSINESS PERSONNEL AND IT PRSONNEL

:) Business personnel possess expertise in functional areas such as marketing, accounting and sales

:) IT personnel have the technological expertise

:)This typically causes a communications gap between the business personnel and IT personnel

IMPROVING COMMUNICATIONS

:) Business personnel must seek to increase their understanding of IT

:) IT personnel must seek to increase their understanding of the business

:) It is the responsibility of the CIO to ensure effective communication between business personnel and IT         personnel 

ORGANIZATIONAL FUNDAMENTALS – ETHICS AND SECURITY

:)  Ethics and security are two fundamental building blocks that organizations must base their businesses on to     be successful.

:)  In recent years, such event as the 9/11 have shed new light on the meaning of ethics and security.

 ETHICS 

:) Ethics – the principles and standards that guide our behavior toward other people

:) Privacy is a major ethical issues;

         :(Privacy – the right to be left alone when you want to be to have control ever your own personnel                 possessions and not to be observed without your consent

:) Issues affected by technology advances 

Intelligent property	Intangible creative work that is embodied in physical form
Copyright	The legal protection afforded an expression of an idea, such as a song, video game and some types of proprietary documents
Fair use doctrine	In certain situations, it is legal to use copyrighted material
Pirated software	The unauthorized use, duplication, distribution or sale of copyrighted software
Counterfeit software	Software that is manufactured to lock like the real thing and sold as such

•  One of the main ingredients in trust is privacy
• Primary reasons privacy issues lost trust for e-business

1.	Loss of personnel privacy is a top concern for Americans in the 21st century
2.	Among Internet users, 37 percent would be “a lot” more inclined to purchase a product on a websites that had a privacy policy
3.	Privacy/security is the number one factors that would convert Internet researchers into Internet buyers

SECURITY – HOW MUCH WILL DOWNTIME COST YOUR BUSINESS??

Sources of Unplanned Downtime
Bomb threat	Hacker	Snowstorm
Burst pipe	Hail	Sprinkler malfunction
Chemical spill	Hurricane	Static electricity
Construction	Ice storm	Strike
Corrupted data	Insects	Terrorism
Earthquake	Lightning	Theft
Electrical short	Network failure	Tornado
Epidemic	Plane crash	Train derailment
Equipment failure	Frozen pipe	Smoke damage
Evacuation	Power outage	Vandalism
Explosion	Power surge	Vehicle crash
Fire	Rodents	Virus
Flood	Sabotage	Water damage (various)
Fraud	Shredded data	Wind

PROTECTING INTELLECTUAL ASSETS

·Organizational information is intellectual capital – it must be protected

· Information security – the protection of information from accidental or intentional misuse by persons                inside or outside an organization

· E-business automatically crates tremendous information security risks for organization