management information system-mis

Management Information System

What Is ManagementWhat Is Management

• Management• the process of coordinating work activities

so that they are completed efficiently and effectively with and through other people• Process - represents ongoing functions or

primary activities engaged in by managers• Coordinating - distinguishes a managerial

position from a non-managerial one

What is ManagementWhat is Management

• Management (cont.)• Efficiency - getting the most output from the least

amount of inputs• “doing things right” (not wasting resources)• concerned with means• Examples: cutting inventory levels• Decreasing the amount of time to manufacture

products• Effectiveness - completing activities so that

organizational goals are attained• “doing the right things” • concerned with ends

Efficiency and Effectiveness in Management

Management Strives For:Low resource waste (high efficiency)

High goal attainment (high effectiveness)

ResourceUsage

Efficiency (Means)

GoalAttainment

Effectiveness (Ends)

Low Waste High Attainment

Key Resources of MIS Information

• DataAre raw facts that describe a particular phenomenone.g Current Temperature, Price of property, Age of a person etc.

A message which source wants to communicate to the receivere.g Text, Voice, Image, movies, Music etc

• Information: Data that is organized, meaningful, and useful• data with context

• processed data

• value-added to data

• summarized• organized• analyzed

Data and InformationData and Information

Changing Data into Information

• Data – Raw facts stored in databases– Need additional processing to become useful

• Information– Required by decision maker – Data processed and presented in a meaningful form– Transformation (any process that changes data into information).

Program instructions

Data collected within an organisation

Data collected Where from? Used for?

Order details, customer details complaints

customers

Financial data bank

Cost of goods, new products

suppliers

Sales data Sales Dept

Data collected within an organisation

Data collected Where from? Used for?

Order details, customer details complaints

customers Supplying goods, creating invoices and statements

Improved performance

Financial data bank Planning strategic decisions

Cost of goods, new products

suppliers Selling to customers

Sales data Sales Dept Monitor sales against forecasts, re-order of stock

Characteristics of Valuable Information

1. Accuracy.

2. Verifiable.

3. Timeliness.

4. Organized.

5. Meaningful.

6. Cost effective.

1.Accuracy

• The information a user receives has been processed correctly

• Correct information

• Free from errors

• Inaccurate information can lead to incorrect decisions

2. Verifiable

User can confirm and verify the information.

Identify source of information

Having information when users need it.

Right information must be produced to users at right time.

3.Timely Information

4. Organized

Information is arranged to suit the needs and

requirements of the users.

5. Meaningful Relevant to the user who

receives or uses it.

Unnecessary information must be eliminated.

6.Cost-effective

The cost to produce the information should be less than the

actual cost of the information.

What is a System?What is a System?

• A system is…• A set of interrelated components• With a clearly defined boundary• Working together• To achieve a common set of objectives• By accepting inputs and producing

outputs• In an organized transformation process

Basic Functions of a System

• Input:• Capturing and assembling elements that enter the system to be

processed

• Processing:

• Transformation process that converts input into output

• Output:

• Transferring transformed elements to their ultimate destination

IT and IS• What is Information Technology?

Any form of technology used by people to handle information.

• What are Information Systems?“A collection of hardware, software, data, people, and procedures that are designed to generate information that support day-to-day

activities of users in an organization”

• The branch of Engineering that deals with the use of Computers and Telecommunications to retrieve, store and transmit information

• Any computer based tool that people use to work with information & support the information & information processing needs of an organization

Information Technology (IT)

Definition of Information Systems

“A collection of hardware, software, data, people, and procedures that

are designed to generate information that support day-to-

day activities of users in an organization”

Components of Information Systems

• Data

• Software

• Hardware

• People

• Procedures

Information System Activities

• Input of data resources• Data entry activities

• Processing of data into information• Calculations, comparisons, sorting, and so on

• Output of information products• Messages, reports, forms, graphic images

• Storage of data resources• Data elements and databases

• Control of system performance• Monitoring and evaluating feedback

Types of Information SystemsTypes of Information Systems

• Operations Support Systems:• TPS( Sales, Inventory, and accounting systems)• PCS( Monitor and control industrial processes ( Petroleum refining,

power generation and steel production systems.• Enterprise collaboration systems, such as e-mail, chat and

videoconferencing systems.

• Management Support Systems:• MIS( Provide information as reports and displays)• DSS(such as products pricing, profitability forecasting, and risk

analysis.• EIS( Provides critical information from MIS, DSS such as system

for easy access to analysis of business performance, action of competitors, and strategic planning

Types of Operations Support SystemsTypes of Operations Support Systems

• Transaction Processing Systems• Record and process business transactions• Examples: sales processing, inventory systems,

accounting systems

• Process Control Systems• Monitor and control physical processes• Example: using sensors to monitor chemical processes

in a petroleum refinery

• Enterprise Collaboration Systems• Enhance team and workgroup communication• Examples: email, video conferencing

Transaction Processing SystemsTransaction Processing Systems

• TPS is the important examples of Operations support systems that record and process data resulting from business transactions.

• Computerized systems that perform and record the daily routine transactions necessary to conduct the business; they serve the organization’s operational level

• Examples• Accounting information systems• TCS, DHL, all have systems that are TPS

Two Ways to Process TransactionsTwo Ways to Process Transactions

• Batch Processing:

• Accumulate transactions over time and process periodically

• Example: a bank processes all checks received in a batch at night

• Online Processing:

• Process transactions immediately• Example: a bank processes an ATM withdrawal

immediately

Example of TPSExample of TPS

1. An inventory control system keeps a file of records about the stock of goods that a business has on hand (the inventory) which is one aspect of the state of the business.

2. When items are shipped or received, the state of the

business is affected, and the inventory control system makes changes about the inventory in the stored records.

• 4. It also prints a report giving the quantity on hand for each item in inventory, which is a characteristic of the state of the business.

• Finally, when inventory is low, the system produces output that causes more inventory to be ordered, which is another type of business transaction.

Example of TPSExample of TPS

Types of TPS Systems

Transaction Processing System Functions

Input function

• Capture input data• Enter input data• Validate input data

Processing function:

• perform computation• make decision

Output function:

• produce screen output• print output

Storage function:

• stored data• Access data• Update data

• Transaction processing systems perform input, output, storage, and processing functions.

• Input functions include capturing data on a source document, entering the input data into the system, and checking input data for errors, a process called data validation

• Output functions include producing screen or paper reports, such as detail reports, summary reports, and exception reports.

Transaction Processing SystemTransaction Processing System

• Storage functions include storing data in files and databases, accessing stored data, sorting stored data, and updating stored data.

• Processing functions involve the manipulation of data, including computation and decision making

Transaction Processing SystemTransaction Processing System

Management Information Systems

• MIS provides information in the form of reports and displays to managers and many business professionals. Such as sales analysis, production performance.

• Provides information to business professionals in a variety of easy-to-use formats.

• Examples– Systems that provide managers with reports and online real-

time access to company performance and historical records.

Management Information System (MIS)

Decision Support Systems

Decision Support Systems are concerned with providing useful information to support the decision process.

A Production Manager may use a DSS to decides how much product to manufacture based on the expected sales associated with a future promotion and the location and availability of the raw materials necessary to manufacture the product.

• Examples– May take data from both internal sources (TPS, MIS) but

also from external sources (Stock prices or product prices of competitors)

– Shipping companies use voyage-estimating systems that take various shipping information into account and give advice on costs, freight rates for various types of cargo and port expenses etc

Voyage-estimating Decision Support System

• Needs voyage-estimating system to calculate• financial details

• Ship/time costs (fuel, labour, capital)• Freight rates for various types of cargo• Port expenses

• technical details• Ship cargo capacity• Speed• Port distances• Fuel and water consumption• Cargo loading patterns

Decision Support Systems

Decision Support System (DSS)

Executive Information SystemsExecutive Information Systems

• Information Systems at the organizations strategic level designed to address unstructured decision making through advanced graphics and communications.

• Examples:– Incorporate data about external events such as tax

laws or competitors, but also draw summarized information from internal MIS and DSS.

– Filter, compress and track critical data, emphasizing the reduction of time and effort required to obtain information useful to executives.

Executive Support System (ESS)

What is a human resources information system (HRIS)?

Manages human resources functions Employee relationship management (ERM) system

facilitates communication with employees

Human Resource Systems

• To view information systems as more than a set of technologies that support efficient business operations, work group and enterprise collaboration. Or effective business decision making.

• IT can change the way businesses compete

• A strategic information system is any information system that uses IT to help an organization…• Gain a competitive advantage• Reduce a competitive disadvantage• Or meet other strategic enterprise objectives

Strategic ITStrategic IT

The major role of information systems applications in business is to provided effective support a company’s strategies for gaining competitive advantage.

This strategic role of information systems involves using information technology to develop products, services, and capabilities that give a company major advantages over the competitive forces it faces in the global marketplace.

• This is accomplished through a strategic information architecture ---the collection of strategic information systems that support the competitive position and strategies of a business enterprise. So a strategic information system can be any kind of information system that uses information technology to help an organization gain a competitive advantage, reduce a competitive disadvanrage.

• To succeed, a business must develop strategies to counter these forces…• Rivalry of competitors within its industry

• New entrants into an industry and its markets

• Substitute products that may capture market share

• Bargaining power of customers

• Bargaining power of suppliers

Competitive ForcesCompetitive Forces

Competitive Forces and StrategiesCompetitive Forces and Strategies

• Competition is a positive characteristic in business, and competitors share a natural and often healthy, rivalry.

• This rivalry encourage and sometimes require a constant effort to gain competitive advantage in the marketplace.

• Against the threat of new entrants also expands significant organizational resources.

• The threat of substitutes is another competitive force confronting a business. The effect of this force is seen almost daily in a wide variety of industries.

• It is often at its strongest during periods of rising costs or inflation. When airline prices get too high, peoples substitute care travel on their vacations. Exp.

• If the customers’ bargaining power gets to strong, they can drive prices to unmanageably low level or simply refuse to buy the products or service.

• If a key suppliers’ bargaining power gets to strong, it can force the price of goods and services to unmanageably high levels. 2-53

• Cost Leadership• Become low-cost producers• Help suppliers or customers reduce costs• Increase cost to competitors

• Differentiation Strategy• Differentiate a firm’s products from its

competitors’• Focus on a particular segment or niche of market.• PIMSAT, focus on IT programs, and IU focus on

Business studies

Five Competitive StrategiesFive Competitive Strategies

• Innovation Strategy• Unique products, services, or markets• Radical changes to business processes

• Example: Amazon’s online, full-service customer systems

• Growth Strategy• Expand company’s capacity to produce• Expand into global markets• Diversify into new products or services

• Example: Wal-Mart’s merchandise ordering via global satellite tracking

Competitive Strategies (continued)Competitive Strategies (continued)

• Alliance Strategy• Establish linkages and alliances with customers,

suppliers, competitors, consultants, and other companies

• Includes mergers, acquisitions, joint ventures, virtual companies

• Example: Wal-Mart uses automatic inventory replenishment by supplier.

• As a consultants,

Competitive Strategies (continued)Competitive Strategies (continued)

• These strategies are not mutually exclusive• Organizations use one, some, or all• A given activity could fall into one or more

categories of competitive strategy

• Not everything innovative serves to differentiate one organization from another• Likewise, not everything that differentiates

organizations is necessarily innovative

Using Competitive StrategiesUsing Competitive Strategies

Ways to Implement Basic StrategiesWays to Implement Basic Strategies

• Lock in Customers and Suppliers• Deter them from switching to competitors

• Build in Switching Costs• Make customers and suppliers dependent on the

use of innovative IS

• Erect Barriers to Entry• Discourage or delay other companies from

entering the market• Increase the technology or investment needed to

Other Competitive StrategiesOther Competitive Strategies

• Build Strategic IT Capabilities• Take advantage of strategic opportunities when

they arise• Improve efficiency of business practices

• Leverage Investment in IT• Develop products and service that would not be

possible without a strong IT capability

Other Competitive StrategiesOther Competitive Strategies

• What is the business value in being customer-focused?• Keep customers loyal• Anticipate their future needs• Respond to customer concerns• Provide top-quality customer service

• Focus on customer value• Quality, not price, has become the primary

determinant of value• Consistently

Customer-Focused BusinessCustomer-Focused Business

• Companies that consistently offer the best value from the customer’s perspective…• Track individual preferences• Keep up with market trends• Supply products, services, and information

anytime, anywhere• Tailor customer services to the individual• Use Customer Relationship Management (CRM)

systems to focus on the customer

Providing Customer ValueProviding Customer Value

Building Customer Value via the InternetBuilding Customer Value via the Internet

• View the firm as a chain of basic activities that add value to its products and services• Primary processes directly relate to

manufacturing or delivering products• Support processes help support the day-to-day

running of the firm and indirectly contribute to products or services

• Use the value chain to highlight where competitive strategies will add the most value

The Value Chain and Strategic ISThe Value Chain and Strategic IS

Using IS in the Value ChainUsing IS in the Value Chain

• A company that emphasizes strategic business use of IT would use it to gain a competitive differentiation• Products

• Services

• Capabilities

Strategic Uses of ITStrategic Uses of IT

• Called BRP or simply Reengineering• Fundamental rethinking and radical redesign of

business processes• Seeks to achieve improvements in cost, quality,

speed, and service

• Potential payback is high, but so is risk of disruption and failure

• Organizational redesign approaches are an important enabler of reengineering• Includes use of IT, process teams, case managers

Reengineering Business ProcessesReengineering Business Processes

BPR Versus Business ImprovementBPR Versus Business Improvement

• IT plays a major role in reengineering most business processes• Can substantially increase process efficiencies

• Improves communication

• Facilitates collaboration

The Role of Information TechnologyThe Role of Information Technology

• Many processes are reengineered with…• Enterprise resource planning software

• Web-enabled electronic business and commerce systems

A Cross-Functional ProcessA Cross-Functional Process

• IT that supports this process…• CRM systems using intranets and the Internet• Supplier-managed inventory systems using the

Internet and extranets• Cross-functional ERP software to integrate

manufacturing, distribution, finance, and human resource processes

• Customer-accessible e-commerce websites for order entry, status checking, payment, and service

• Customer, product, and order status databases accessed via intranets and extranets

Reengineering Order ManagementReengineering Order Management

• Agility is the ability to prosper• In rapidly changing, continually fragmenting

global markets• By selling high-quality, high-performance,

customer-configured products and services• By using Internet technologies

• An agile company profits in spite of• Broad product ranges• Short model lifetimes• Individualized products• Arbitrary lot sizes

Becoming an Agile CompanyBecoming an Agile Company

• An agile company…• Presents products as solutions to customers’

problems• Cooperates with customers, suppliers and

competitors• Brings products to market as quickly and cost-

effectively as possible• Organizes to thrive on change and uncertainty• Leverages the impact of its people and the

knowledge they possess

Strategies for AgilityStrategies for Agility

How IT Helps a Company be AgileHow IT Helps a Company be Agile

• A virtual company uses IT to link…• People• Organizations• Assets• Ideas

• Inter-enterprise information systems link…• Customers• Suppliers• Subcontractors• Competitors

Creating a Virtual CompanyCreating a Virtual Company

A Virtual CompanyA Virtual Company

• Basic business strategies• Share information and risk with alliance partners• Link complimentary core competencies• Reduce concept-to-cash time through sharing• Increase facilities and market coverage• Gain access to new markets and share market or

customer loyalty• Migrate from selling products to selling solutions

Virtual Company StrategiesVirtual Company Strategies

• A knowledge-creating company or learning organization…• Consistently creates new business knowledge• Disseminates it throughout the company• Builds it into its products and services

Building a Knowledge-Creating CompanyBuilding a Knowledge-Creating Company

• Explicit Knowledge• Data, documents, and things written down or

stored in computers

• Tacit Knowledge• The “how-to” knowledge in workers’ minds• Represents some of the most important

information within an organization• A knowledge-creating company makes such tacit

knowledge available to others

Two Kinds of KnowledgeTwo Kinds of Knowledge

• Successful knowledge management• Creates techniques, technologies, systems,

and rewards for getting employees to share what they know

• Makes better use of accumulated workplace and enterprise knowledge

Knowledge ManagementKnowledge Management

Knowledge Management TechniquesKnowledge Management Techniques

• Knowledge management systems• A major strategic use of IT• Manages organizational learning and know-how• Helps knowledge workers create, organize, and

make available important knowledge• Makes this knowledge available wherever and

whenever it is needed

• Knowledge includes• Processes, procedures, patents, reference works,

formulas, best practices, forecasts, and fixes

Knowledge Management Systems (KMS)Knowledge Management Systems (KMS)

Produces and stores results

Electronic device operating under the control of instructions stored in its own memory

Processes data into informationinformation

Data that is organized, meaningful, and useful

Accepts datadata

Raw facts, figures, and symbols

What is HardwareWhat is Hardware

• Hardware is the general term that is used to describe physical artifacts of technology.

What is an input device?

Hardware used to enter dataand instructions

Input DevicesInput Devices

What is an output device?

Hardware that conveys information to one or morepeople

What is storage?

Storage mediaStorage media

Physical material on which data, instructions, and information are stored

Storage mediaStorage media

Physical material on which data, instructions, and information are stored

Storage deviceStorage device

Records and retrieves items to and from a storage medium

Storage deviceStorage device

Records and retrieves items to and from a storage medium

Holds data, instructions, and information for future use

Computer For Individual UsersComputer For Individual Users

• Desktop computers• The most common type of computer• Sits on the desk or floor• Performs a variety of tasks

• Workstations• Specialized computers• Optimized for science or graphics• More powerful than a desktop

Mainframe Very powerful, expensive computer that supports thousands of connected users[Also called an Enterprise Server]

Supercomputer The fastest, most powerful, most expensive computer. Used for applications requiring complex mathematical calculations

Server Controls access to network resources and provides centralized storage

What is a notebook computer?

Portable, small enough to fit on your lap

Also called a laptop computer

Generally more expensive than desktop computers with equal capabilities

What is a Tablet PC?

Especially useful for taking notes

Resembles a letter-sized slate Allows you to write on the

screen using a digital pen

Consists of a seriesof instructions thattells the computer

what to do andhow to do it

Consists of a seriesof instructions thattells the computer

what to do andhow to do it

What is software?

Also called aprogram

Computer SoftwareComputer Software

• Definition:• Key to productive use of computers. • A computer program that tells the computer how to

perform particular tasks.• Information that the computer uses to get the job done.

• Types of Software• Software can be categorized into two types:

• System Software• Application Software.

What is system software?

Operating System (OS)Operating System (OS)is a set of programs that coordinates all activities among computer hardware devices

Utility ProgramsUtility Programs allow the user to perform maintenance-type tasks usually related to managing a computer, its devices or its programs

Programs that control or maintain the operations of the computer and its devices

What is application software?

Presentation Graphics

Spreadsheet

Database

Word Processing

Programs designed to make users more productive

Create/Produce useful data

Word ProcessingWord Processing

• Word Processing software is used to create and print documents. A key advantage of word processing software is that users easily can make changes in documents.

Electronic SpreadsheetsElectronic Spreadsheets

• Electronic spreadsheet software allows the user to add, subtract, and perform user-defined calculations on rows and columns of numbers. These numbers can be changed and the spreadsheet quickly recalculates the new results.

Database SoftwareDatabase SoftwareDatabase SoftwareDatabase Software

• Allows the user to enter, retrieve, and update data in an organized and efficient manner, with flexible inquiry and reporting capabilities.

Computer SoftwareComputer Software

What is a programmer?

Someone who developsapplication or system software Programmer writes

the instructions todirect the computer toprocess data intoinformation

What is a graphical user interface (GUI)?

Allows you to interact with the software using graphics and visual images such as icons

Controls how you enter data and instructions and how the screen displays information

Bit and ByteBit and Byte

• Bit• Short for binary digit• Smallest element of data• Either zero or one

• Byte• Group of eight bits, which operate as a single

unit• Represents one character or number

Representing Characters in BytesRepresenting Characters in Bytes

Using Binary Code to CalculateUsing Binary Code to Calculate

Storage Capacity MeasurementStorage Capacity Measurement

• Kilobyte (KB): one thousand bytes

• Megabyte (MB): one million bytes

• Gigabyte (GB): one billions bytes

• Terabyte (TB): one trillion bytes

• Petabyte (PB): one quadrillion bytes

Common Number SystemsCommon Number Systems

System Base Symbols

Used by humans?

Used in computers?

Decimal 10 0, 1, … 9 Yes No

Binary 2 0, 1 No Yes

Octal 8 0, 1, … 7 No No

Hexa-decimal

16 0, 1, … 9,

A, B, … F

Quantities/Counting (1 of 3)Quantities/Counting (1 of 3)

Decimal Binary Octal

Hexa-decimal

0 0 0 0

1 1 1 1

2 10 2 2

3 11 3 3

4 100 4 4

5 101 5 5

6 110 6 6

7 111 7 7108

Quantities/Counting (2 of 3) Quantities/Counting (2 of 3)

Hexa-decimal

8 1000 10 8

9 1001 11 9

10 1010 12 A

11 1011 13 B

12 1100 14 C

13 1101 15 D

14 1110 16 E

15 1111 17 F109

Quantities/Counting (3 of 3) Quantities/Counting (3 of 3)

Hexa-decimal

16 10000 20 10

17 10001 21 11

18 10010 22 12

19 10011 23 13

20 10100 24 14

21 10101 25 15

22 10110 26 16

23 10111 27 17 Etc.

Quick ExampleQuick Example

2510 = 110012 = 318 = 1916

Decimal to Decimal (just for fun)Decimal to Decimal (just for fun)

Hexadecimal

Decimal Octal

Binary

12510 => 5 x 100 = 52 x 101 = 201 x 102 = 100

Weight

Decimal to Decimal (just for fun)

Weight “0”

Binary to DecimalBinary to Decimal

Hexadecimal

Decimal Octal

Binary

Binary to DecimalBinary to Decimal

• Technique• Multiply each bit by 2n, where n is the “weight”

of the bit• The weight is the position of the bit, starting from

0 on the right• Add the results

ExampleExample

1010112 => 1 x 20 = 11 x 21 = 20 x 22 = 01 x 23 = 80 x 24 = 01 x 25 = 32

Bit “0”

Octal to DecimalOctal to Decimal

Hexadecimal

Decimal Octal

Binary

Octal to DecimalOctal to Decimal

ExampleExample

7248 => 4 x 80 = 42 x 81 = 167 x 82 = 448

Hexadecimal to DecimalHexadecimal to Decimal

Hexadecimal

Decimal Octal

Binary

Hexadecimal to DecimalHexadecimal to Decimal

ExampleExample

ABC16 => C x 160 = 12 x 1 = 12 B x 161 = 11 x 16 = 176 A x 162 = 10 x 256 = 2560

274810

Decimal to BinaryDecimal to Binary

Hexadecimal

Decimal Octal

Binary

Decimal to BinaryDecimal to Binary

• Technique• Divide by two, keep track of the remainder• First remainder is bit 0 (LSB, least-significant bit)• Second remainder is bit 1• Etc.

ExampleExample

12510 = ?22 125 62 12 31 02 15 12 7 12 3 12 1 12 0 1

12510 = 11111012

Decimal to OctalDecimal to Octal

Hexadecimal

Decimal Octal

Binary

Decimal to OctalDecimal to Octal

• Technique• Divide by 8• Keep track of the remainder

ExampleExample

123410 = ?8

8 1234 154 28 19 28 2 38 0 2

123410 = 23228

Decimal to HexadecimalDecimal to Hexadecimal

Hexadecimal

Decimal Octal

Binary

Decimal to HexadecimalDecimal to Hexadecimal

• Technique• Divide by 16• Keep track of the remainder

ExampleExample

123410 = ?16

123410 = 4D216

16 1234 77 216 4 13 = D16 0 4

Octal to BinaryOctal to Binary

Hexadecimal

Decimal Octal

Binary

Octal to BinaryOctal to Binary

• Technique• Convert each octal digit to a 3-bit equivalent

binary representation

ExampleExample

7058 = ?2

111 000 101

7058 = 1110001012

Hexadecimal to BinaryHexadecimal to Binary

Hexadecimal

Decimal Octal

Binary

Hexadecimal to BinaryHexadecimal to Binary

• Technique• Convert each hexadecimal digit to a 4-bit

equivalent binary representation

ExampleExample

10AF16 = ?2

1 0 A F

0001 0000 1010 1111

10AF16 = 00010000101011112

Binary to OctalBinary to Octal

Hexadecimal

Decimal Octal

Binary

Binary to OctalBinary to Octal

• Technique• Group bits in threes, starting on right• Convert to octal digits

ExampleExample

10110101112 = ?8

1 011 010 111

1 3 2 7

10110101112 = 13278

Binary to HexadecimalBinary to Hexadecimal

Hexadecimal

Decimal Octal

Binary

Binary to HexadecimalBinary to Hexadecimal

• Technique• Group bits in fours, starting on right• Convert to hexadecimal digits

ExampleExample

10101110112 = ?16

10 1011 1011

10101110112 = 2BB16

Octal to HexadecimalOctal to Hexadecimal

Hexadecimal

Decimal Octal

Binary

Octal to HexadecimalOctal to Hexadecimal

• Technique• Use binary as an intermediary

ExampleExample

10768 = ?16

1 0 7 6

001 000 111 110

10768 = 23E16

Hexadecimal to OctalHexadecimal to Octal

Hexadecimal

Decimal Octal

Binary

Hexadecimal to OctalHexadecimal to Octal

• Technique• Use binary as an intermediary

ExampleExample

1F0C16 = ?8

1 F 0 C

0001 1111 0000 1100

1 7 4 1 4

1F0C16 = 174148

Exercise – Convert ...Exercise – Convert ...

Don’t use a calculator!

Hexa-decimal

1110101

Exercise – Convert …Exercise – Convert …

Hexa-decimal

33 100001 41 21

117 1110101 165 75

451 111000011 703 1C3

431 110101111 657 1AF

Answer

WEB BROWSERSWEB BROWSERS

WORD PROCESSING & DESKTOP PUBLISHING

ELECTRONIC SPREADSHEETS & PRESENTATION GRAPHICS

Electronic Spreadsheets Worksheet of rows and columns Used for calculations and charts E.g., Lotus 1-2-3, Microsoft Excel, Corel

QuattroPro, BO XIPresentation Graphics

Convert numeric data into graphics displays Prepare multimedia presentations including

graphics, photos, animation, and video clips E.g., Microsoft PowerPoint, Lotus Freelance,

Corel Presentations

ELECTRONIC SPREADSHEETS & PRESENTATION GRAPHICS

PERSONAL INFORMATION MANAGER & GROUPWARE

Personal Information Manager (PIM) Software for end user productivity and collaboration Store information about clients, schedules, manage appointments,

manage tasks E.g., Lotus Organizer, Microsoft Outlook

Groupware Software that helps workgroups collaborate on group assignments E-mail, discussion groups, databases, videoconferencing E.g., Lotus Notes, Novell GroupWise, Microsoft Exchange

PERSONAL INFORMATION MANAGER & GROUPWARE

SOFTWARE ALTERNATIVESSOFTWARE ALTERNATIVES

• Outsourcing development and maintenance of software

• Application service providers (ASPs)• Companies that own, operate and maintain

application software and computer system resources

• Use the application for a fee over the Internet• Pay-as-you-go

SOFTWARE ALTERNATIVESSOFTWARE ALTERNATIVES

SOFTWARE LICENSINGSOFTWARE LICENSING

• All software (COTS, ASP) is licensed

• You don’t buy software: you buy a license to use the software under the terms of the licensing agreement

• Licensed to protect the vendor’s property rights

SYSTEM SOFWARESYSTEM SOFWARE

Software that manages and supports a computer system

System management programs Programs that manage hardware, software,

network, and data resources E.g., operating systems, network management

programs, database management systems, systems utilities

Systems development programs Programs that help users develop information

system programs

SYSTEM MANAGEMENT PROGRAMS

OPERATING SYSTEMOPERATING SYSTEM

• Integrated system of programs that• Manages the operations of the CPU• Controls the input/output and storage resources

and activities of the computer system• Provides support services as computer executes

applications programs

OS BASIC FUNCTIONSOS BASIC FUNCTIONS

USER INTERFACEUSER INTERFACE

• Part of the operating system that allows you to communicate with it

• Three main types:• Command-driven• Menu-driven• Graphical user interfaces (GUI)

USER INTERFACEUSER INTERFACE

RESOURCE MANAGEMENTRESOURCE MANAGEMENT

• Part of operating system that manages the hardware and networking resources of a computer system• Includes CPU, memory, secondary storage

device, telecommunications, and input/output peripherals

FILE MANAAGEMENTFILE MANAAGEMENT

• Part of the operating system that controls the creation, deletion, and access of files of data and programs

FILE MANAGEMENTFILE MANAGEMENT

TASK MANAGEMENTTASK MANAGEMENT

• Part of the operating system that manages the accomplishment of computing tasks of the end users

• Multitasking• Task management approach that allows for

several tasks to be performed in a seemingly simultaneous fashion

• Also called multiprogramming or time-sharing

TASK MANAGEMENTTASK MANAGEMENT

POPULAR OSPOPULAR OS

• Windows• GUI, multitasking, networking, multimedia• Microsoft’s operating system• Different versions manage servers

• Unix• Multitasking, multiuser, network-managing• Portable – can run on mainframes, midrange and PCs

• Linux• Low-cost, powerful reliable Unix-like operating system• Open-source

• MAC OS X• Apple operating system for the iMac• GUI, multitasking, multimedia

OTHER SYSTEM SOFTWAREOTHER SYSTEM SOFTWARE

Utilities Miscellaneous housekeeping functions Example, Norton utilities includes data backup,

virus protection, data compression, etc.Performance monitors

Programs that monitor and adjust computer system to keep them running efficiently

Security monitors Programs that monitor and control use of

computer systems to prevent unauthorized use of resources

WEB LANGUAGESWEB LANGUAGES

• HTML • A page description language that creates hypertext documents for the

• XML• Describes the contents of Web pages by applying identifying tags or

contextual labels to the data in Web documents

• Java• Object-oriented programming language that is simple, secure and

platform independent• Java applets can be executed on any computer

WEB LANGUAGESWEB LANGUAGES

Data Resource ManagementData Resource Management

Foundation Data ConceptsFoundation Data Concepts

Data Organization Structure is logically organized into:-Data Organization Structure is logically organized into:- Character Field Record File Database

Like writing can be organized into letters, word, paragraph & sentences

CHARACTERCHARACTER

• Consists of a single alphabets, numeric or other symbol.

• It is a byte used to represent a particular character.

fieldfield

• Consists of a grouping of related characters.• E.g., person names represent the name field. i.e.,

last name, first name, state, city, telephone #

RECORDRECORD

• Fields when grouped together make a record.

• An allocation of attributes to describe any entity.• E.g.,

• Person payroll records• Employee claims record• Student academic records

FILEFILE

• Group of related records is a data file or table.

• A single table may be referred to as a flat file.

• E.g., • Employee file• Student file• Inventory file• Payroll file etc

DATABASEDATABASE

• An integrated collection of logically related data elements.

• It contains all the records

EmployeeRecord 1

EmployeeRecord 2

EmployeeRecord 3

EmployeeRecord 4

NameField

SS No.Field

SalaryField

NameField

SS No.Field

SalaryField

NameField

SS No.Field

SalaryField

NameField

SS No.Field

SalaryField

Jones T.A. 275-32-3874 20,000 Klugman J.L. 349-88-7913 28,000 Alverez, J.S. 542-40-3718 100,000 Porter, M.L. 617-87-7915 50,000

Human ResourceDatabase

Payroll File Benefit File

Data Organization StructureData Organization Structure

Electric Utility Database

Entities: Customers, Meters, Bills, Payments, Meter Readings

Relationships: Bills Sent to Customers Customers Make Payments Customers Use Meters

Billing

MeterReading

PaymentProcessing

ServiceStart/Stop

Example: An Electric Utility DatabaseExample: An Electric Utility Database

DATABASE STRUCTURESDATABASE STRUCTURES

• DBMS packages are designed to use specific data structures to provide end users with quick; easy access to information stored in the databases.

DATABASE STRUCTURESDATABASE STRUCTURES

Five Major Database StructuresFive Major Database Structures

•Hierarchical Structure•Network Structure•Relational Model•Object-Oriented•Multidimensional Structure

HIERARCHICAL STRUCTUREHIERARCHICAL STRUCTURE

• One-to-many relationship

• Relationship b/w records from a hierarchy structure all of them are dependent.

• Root element

NETWORK STRUCTURENETWORK STRUCTURE

• Allow many-to-many relationships among records.

• E.g., employee records can be related to more than one project record & vice versa.

RELATIONAL STRUCTURERELATIONAL STRUCTURE

• It is used by most microcomputers DBMS packages as well as by both midrange & mainframes systems.

• In this, all data elements within the database are viewed as being stored in the form of simple two dimensional tables sometimes referred to as relations .

Department Table Employee Table

Deptno Dname Dloc Dmgr Empno Ename Etitle Esalary DeptnoEmp 1Emp 2Emp 3Emp 4Emp 5Emp 6

Dept ADept BDept C

Dept ADept B

Dept A

Dept BDept CDept B

MULTIDIMENSIONAL STRUCTUREMULTIDIMENSIONAL STRUCTURE

Object-oriented structureObject-oriented structure

Attributes•Customer•Balance•Interest Operations•Deposit (Amount)•Withdraw (Amount)•Get Owner

Attributes•Credit Line•Monthly Statements Operations•Calculate Interest•Print Monthly Statement

Attributes•Number of Withdrawals•Quarterly Statement Operations•Calculate Interest Paid•Print Quarterly Statement

Bank Account Object

Checking Account Object Savings Account Object

Inheritance Inheritance

Web based Web based applicationsapplications

Describing the Describing the attributes of an attributes of an entity, plus the entity, plus the

operations that can operations that can be performs upon the be performs upon the

datadata

Supports Supports inheritanceinheritance

Object-oriented structureObject-oriented structure

Database DevelopmentDatabase Development

Database management packages like Microsoft Access or Lotus Approach allow end users to easily develop the database they need.

Database DevelopmentDatabase Development• Database Administrators (DBAs)• Data Definition Language (DDL)

• Oracle 10g or IBM DB2 • Data Dictionary or Metadata Repository

• Database management catalog or directory that contain metadata.

• Relies on specialized database software component to manage a database.

• Metadata• Data on data

Data MiningData Mining• Identify New Product Bundles• Find Root Causes to Quality or Manufacturing

Problems• Prevent Customer Attrition• Cross-Sell to Existing Customers• Profile Customers with More Accuracy

Types of DatabasesTypes of Databases• Operational Databases• Distributed Databases• External Databases• Hypermedia Databases

Distributed Database ModelDistributed Database Model

Client PC

DistributedDatabases

on Intranetsand OtherNetworks

End UserDatabases

DataWarehouse

DataMarts

OperationalDatabases

of theOrganization

NetworkServer

ExternalDatabases

on theInternet and

OnlineServices

Operational DatabasesOperational Databases

Types of DatabasesTypes of Databases

Web-Based Information SystemWeb-Based Information System

WebBrowser

The InternetIntranetsExtranets Web

ServerSoftware

HTMLXML

Web PagesImage FilesVideo FilesAudio Files

NetworkServer

Client PCsHypermedia

Database

Types of DatabasesTypes of Databases

Data WarehousesData WarehousesApplications Data Marts

Finance

Marketing

Accounting

ManagementReporting

Purchasing

InveentoryControl

Shipping

Logistics

Data Warehouse ComponentsData Warehouse Components

Applications and Data MartsApplications and Data Marts

Database Management SystemDatabase Management System

• In mainframe and server computer systems, a software package that is used to…• Create new databases and database applications

• Maintain the quality of the data in an organization’s databases

• Use the databases of an organization to provide the information needed by end users

Common DBMS Software ComponentsCommon DBMS Software Components

• Database definition• Language and graphical tools to define entities,

relationships, integrity constraints, and authorization rights

• Nonprocedural access• Language and graphical tools to access data

without complicated coding

• Application development• Graphical tools to develop menus, data entry

forms, and reports

Common DBMS Software ComponentsCommon DBMS Software Components

• Procedural language interface• Language that combines nonprocedural access

with full capabilities of a programming language

• Transaction processing• Control mechanism prevents interference from

simultaneous users and recovers lost data after a failure

• Database tuning• Tools to monitor, improve database performance

Database Management SystemDatabase Management System

• Database Development• Defining and organizing the content,

relationships, and structure of the data needed to build a database

• Database Application Development• Using DBMS to create prototypes of queries,

forms, reports, Web pages

• Database Maintenance• Using transaction processing systems and other

tools to add, delete, update, and correct data

DBMS Major FunctionsDBMS Major Functions

Database InterrogationDatabase Interrogation

• End users use a DBMS query feature or report generator• Response is video display or printed report• No programming is required

• Query language • Immediate response to ad hoc data requests

• Report generator• Quickly specify a format for information you

want to present as a report

• SQL Queries• Structured, international standard query language

found in many DBMS packages• Query form is SELECT…FROM…WHERE…

• Boolean Logic• Developed by George Boole in the mid-1800s

• Used to refine searches to specific information

• Has three logical operators: AND, OR, NOT

• Example• Cats OR felines AND NOT dogs OR Broadway

• Graphical and Natural Queries• It is difficult to correctly phrase SQL and other

database language search queries

• Most DBMS packages offer easier-to-use, point-and-click methods

• Translates queries into SQL commands

• Natural language query statements are similar to conversational English

Graphical Query WizardGraphical Query Wizard

Database MaintenanceDatabase Maintenance

• Accomplished by transaction processing systems and other applications, with the support of the DBMS• Done to reflect new business transactions and

other events

• Updating and correcting data, such as customer addresses

Application DevelopmentApplication Development

• Use DBMS software development tools to develop custom application programs• Not necessary to develop detailed data-handling

procedures using conventional programming languages

• Can include data manipulation language (DML) statements that call on the DBMS to perform necessary data handling

Telecommunicationsand Networks

Types of Communications NetworksTypes of Communications Networks

• Primary types of communications networks• Wide Area • Local Area • Virtual Private • Client/Server• Peer-to-peer

Wide Area Network (WAN)Wide Area Network (WAN)

• Telecommunication network that covers a large geographic area

Local Area Network (LAN)Local Area Network (LAN)

• Connects computers within a limited physical area, such as an office, classroom, or building

Virtual Private Networks (VPN)Virtual Private Networks (VPN)

• Used to establish secure intranets and extranets• The Internet is the main backbone network• Relies on network firewalls, encryption, and

other security features to build a “pipe” through the Internet

• Creates a private network without the high cost of a separate proprietary connection

Virtual Private NetworkVirtual Private Network

Client/Server NetworksClient/Server Networks

• Clients• End user personal computers or networked

computers

• Servers• Used to manage the networks

• Processing• Shared between the clients and servers• Sometimes called a two-tier architecture

• Larger computer systems are being replaced with multiple client/server networks

Client/Server NetworkClient/Server Network

Network ComputingNetwork Computing

• Networks are the central computing resource of the organization• Thin clients provide a browser-based user

interface for processing applets

• Thin clients include• Network computers• Net PCs• Other low-cost network devices or

information appliances

• Application and database servers provide• The operating system• Application software• Applets• Databases• Database management software

• Sometimes called a three-tier client/server model because it consists of• Thin clients• Application servers• Database servers

Peer-to-Peer NetworksPeer-to-Peer Networks

• Central Server Architecture• P2P file-sharing software connects all PCs

to a central server• When a PC requests a file, the server searches

all active peers on the network• The server sends the requesting PC a list of

links to all active peers who have the file• Clicking a link connects the two PCs and

automatically transfers the file to the requesting PC

Peer-to-Peer NetworksPeer-to-Peer Networks

• Pure Peer-to-Peer Architecture• No central directory or server• File-sharing software connects one PC to

another online user• When you request a file, the software searches

every online user and sends you a list of active file names

• Clicking a link automatically transfers the file from that user’s hard drive to yours

Central Server Peer-to-Peer NetworksCentral Server Peer-to-Peer Networks

• Advantages• Can better protect the integrity and security

of the content and users of the network

• Disadvantages• Directory server can be slowed or overwhelmed

by too many users or technical problems

Peer-to-Peer Network DiagramsPeer-to-Peer Network Diagrams

Digital and Analog SignalsDigital and Analog Signals

• Analog or digital refers to the method used to convert information into an electrical signal• Analog: an electrical current is generated that

is proportional to the quantity being observed• Digital: the quantity being observed is expressed

as a number• Analog: if the temperature is 83 degrees, a measuring

device would generate 8.3 volts

• Digital: a measurement of 83 degrees would be displayed as the number 83

Telecommunications MediaTelecommunications Media

• Twisted-Pair Wire• Ordinary telephone wire• Copper wire is twisted

into pairs

• Coaxial Cable• Sturdy copper or

aluminum wire wrappedwith spacers to insulateand protect it

• Fiber-Optic Cable• One or more hair-thin

filaments of glass fiber wrapped in a protective jacket

The Problem of “The Last Mile”The Problem of “The Last Mile”

• Network providers use fiber optic cable as a communications backbone• Houses connected to the backbone are wired

with twisted pair• Users don’t benefit from the faster, better

technology

Wireless TechnologiesWireless Technologies

• Terrestrial Microwave• Earthbound microwave systems transmit

high-speed radio signals• Follows a line-of-sight path between relay

systems spaced about 30 miles apart

• Communications Satellites• Serve as relay stations• Use microwave radio signals• Earth stations beam signals to the satellites• Not suitable for interactive, real-time processing

• Cellular and PCS Telephone and Pager Systems• Geographic areas are divided into cells• Each cell has a low-power transmitter or radio

relay antenna• Computers and other communications processors

coordinate and control the transmissions to and from mobile users

• Wireless LANS• Uses wireless radio-wave technology to

connect PCs within an office or a building• Can be high-frequency, similar to digital

cellular, or low frequency (spread spectrum)

• Bluetooth• Short-range wireless technology• Connects PCs to devices, such as a printer • Fairly low cost to implement

• Other Wireless Systems• Cellular phones• Mobile radio• PDAs

• Telecommunications networks now play vital and pervasive roles in• Web-enabled e-business processes• Electronic commerce• Enterprise collaboration• Other applications that support business

operations, management, and strategic objectives

The Wireless WebThe Wireless Web

• Wireless Internet access is growing as Web-enabled information appliances proliferate• Smart telephones, pagers, PDAs• All are very thin clients in wireless networks

Telecommunications ProcessorsTelecommunications Processors

• Modems• The most common type of communications

processor• Converts a digital signal to an analog frequency

that can be transmitted over phone lines, then back into a digital signal

• Modulation and demodulation

Comparing TechnologiesComparing Technologies

Inter-Network ProcessorsInter-Network Processors

• Switch… makes connections between telecommunications circuits in a network

• Router… intelligent communications processor that interconnects networks based on different protocols

• Hub… a port-switching communications processor

• Gateway… connects networks with different communications architectures

Communications ProcessorsCommunications Processors

• Multiplexer… allows a single communications channel to carry simultaneous data transmissions from many terminals• In time division multiplexing (TDM), the

multiplexer divides the time each terminal can use the high-speed into short time slots

• Multiplexers increase the number of transmissions possible

• Does not increase the number of physical data channels

Telecommunications SoftwareTelecommunications Software

• May reside in PCs, servers, mainframes, and communications processors• Vital part of all telecommunications networks• Used to manage network performance• WANs often use telecommunications monitors

or teleprocessing monitors• Other networks use operating system software• Middleware helps diverse networks

communicate with each other

Network Management FunctionsNetwork Management Functions

• Traffic Management• Manage network resources and traffic to

avoid congestion and optimize service levels

• Security• Provide authentication, encryption, firewall,

auditing, and enforcement

• Network Monitoring• Troubleshoot and watch over the network,

alerting administrators of potential problems

Network Management FunctionsNetwork Management Functions

• Capacity Planning• Survey network resources, traffic patterns, and

users’ needs• Determine the best way to accommodate the

needs of the network as it grows and changes

Network TopologiesNetwork Topologies

• Topology• The structure of a network

• Star Network• Ties end user computers to a central computer

• Ring Network• Ties local computer processors together in a ring

on a relatively equal basis

• Bus Network• Local processors share the same communications

channel

• Mesh Network• Uses direct communications lines to connect

some or all of the computers in the ring to each other

• Switch• A message-switching computer that handles

data communication between autonomous local computers

Network Architectures and ProtocolsNetwork Architectures and Protocols

• Protocol• A standard set of rules and procedures for the

control of communications in a network

• Handshaking• The process of exchanging predetermined

signals and characters• Establishes a telecommunications session

between terminals and computers

Network Architectures and ProtocolsNetwork Architectures and Protocols

• Network Architecture• Master plan of standard protocols, hardware,

software, and interfaces between end users and computer systems

• Goal is to promote an open, simple, flexible, and efficient telecommunications environment

OSI and TCP/IP ModelsOSI and TCP/IP Models

• Open Systems Interconnection (OSI) Model• A seven-layer model that serves as a standard

model for network architectures• Model for how messages should be transmitted

between two points in a network• Each layer adds functions

• Transmission Control Protocol/Internet Protocol (TCP/IP)• A five-layer telecommunications protocol used by

the Internet

OSI and TCP/IP ModelsOSI and TCP/IP Models

Voice Over IPVoice Over IP

• Internet Telephony• Using an Internet connection to pass voice

data using IP instead of a telephone network• Often referred to as voice over IP or VoIP• Works like a regular phone, but skips long-

distance charges• Runs over standard network infrastructure• Requires a well-configured network to work

smoothly

BandwidthBandwidth

• Bandwidth• The frequency range of a telecommunications

channel that determines the maximum transmission rate

• Speed and capacity typically measured in bits per second (bps)

• Sometimes call baud rate

• Transmission Rates• Narrow-band = low speed• Broadband = high speed

Transmission SpeedsTransmission Speeds

Switching AlternativesSwitching Alternatives

• Circuit Switching• Switch opens a circuit to establish a link

between a sender and a receiver• It remains open until the communication

session is completed

• Packet Switching• Breaks messages into groups called packets• Transmits packets separately

Network InteroperabilityNetwork Interoperability

• Ensures that anyone anywhere on one network can communicate with anyone anywhere on another network• From a telecommunications perspective, no

need to speak a common language

• Telecommunications would be possible without• Complete accessibility• Transparency• Seamless interoperability across all networks

Electronic Business SystemsElectronic Business Systems

Enterprise Business SystemsEnterprise Business Systems

• E-business means using the Internet, other networks, and IT to support• Electronic commerce• Enterprise communications and collaboration• Web-enabled business processes

• E-commerce is the buying, selling, and marketing of products, services, and information over the Internet and other networks

Cross-Functional SystemsCross-Functional Systems

• Cross the boundaries of traditional business functions • Used to reengineer and improve vital business

processes all across the enterprise

Enterprise Application ArchitectureEnterprise Application Architecture

• Provides a conceptual framework• Helps visualize the basic components, processes,

and interfaces of major e-business applications

• Focuses on accomplishing fundamental business processes in concert with• Customers• Suppliers• Partners• Employees

• Enterprise Resource Planning (ERP)• Concentrates on the efficiency of internal

production, distribution, and financial processes

• Customer Relationship Management (CRM)• Focuses on acquiring and retaining profitable

customers via marketing, sales, and services

• Partner Relationship Management (PRM)• Aims at acquiring and retaining partners who

can enhance the selling and distribution of products and services

• Supply Chain Management (SCM)• Focuses on developing the most efficient and

effective sourcing and procurement processes

• Knowledge Management (KM)• Focuses on facilitating internal group

collaboration and decision support

Enterprise Application IntegrationEnterprise Application Integration

• EAI software connects cross-functional systems

• Serves as middleware to provide• Data conversion• Communication between systems• Access to system interfaces

• Cross-functional information systems that process data resulting from the occurrence of business transactions• Transactions include sales, purchases, deposits,

withdrawals, refunds, and payments

• Online transaction processing (OLTP) is a real-time system that captures transactions immediately

The Transaction Processing CycleThe Transaction Processing Cycle

Enterprise Collaboration Systems (ECS)Enterprise Collaboration Systems (ECS)

• EC systems are cross-functional information systems that enhance team and workgroup• Communication• Coordination• Collaboration

• Systems may include• Networked PC workstations• Servers• Databases• Groupware and application packages

ECS ToolsECS Tools

Functional Business SystemsFunctional Business Systems

• A variety of types of information systems that support the business functions of• Accounting• Finance• Marketing• Operations management• Human resource management

IT in BusinessIT in Business

Marketing SystemsMarketing Systems

• Marketing systems are concerned with• Planning, promotion, and sale of existing

products in existing markets

• Development of new products and new markets

• Better attracting and serving present and potential customers

Marketing Information SystemsMarketing Information Systems

Interactive MarketingInteractive Marketing

• Interactive Marketing• A customer-focused marketing process• Uses the Internet, intranets, and extranets• Establishes two-way transactions between a

business and its customers or potential customers

• Goal• Profitably use networks to attract and keep

customers• Get customers to help create, purchase, and

improve products and services

Targeted MarketingTargeted Marketing

• An advertising and promotion management concept with five targeting components

Targeted Marketing ComponentsTargeted Marketing Components

• Community: customized ads to appeal to specific virtual communities

• Content: ads placed on a variety of selected websites, aimed at a specific audience

• Context: ads placed on web pages that are relevant to a product or service

• Demographic/Psychographic: web marketing aimed at specific types or classes of people

• Online behavior: promotions tailored to each visit to a site by an individual

Sales Force AutomationSales Force Automation

• Outfit sales force with notebook computers, web browsers, and sales contact software• Connect them to marketing websites and the

company intranet

• Goals• Increase personal productivity• Speed up capture and analysis of sales data• Gain strategic advantage

Manufacturing Information SystemsManufacturing Information Systems

• Supports the production/operations functions• Includes all activities concerned with planning

and control of the processes producing goods or services

Computer-Integrated ManufacturingComputer-Integrated Manufacturing

CIM ObjectivesCIM Objectives

• Simplify production processes, product designs, and factory organization

• Automate production processes and the business functions that support them

• Integrate all production and support processes using• Networks• Cross-functional business software• Other information technologies

CIM SystemsCIM Systems

• Computer-aided manufacturing (CAM)• Automate the production process

• Manufacturing execution systems (MES)• Performance monitoring information systems

for factory floor operations

• Process control• Control ongoing physical processes

• Machine control• Controls the actions of machines

Human Resource Management (HRM)Human Resource Management (HRM)

• Information systems designed to support• Planning to meet personnel needs

• Development of employees to their full potential

• Control of all personnel policies and programs

HRM SystemsHRM Systems

HRM and the InternetHRM and the Internet

• Recruiting employees using the corporate website and commercial recruiting services

• Posting messages in selected Internet newsgroups

• Communicating with job applicants via e-mail

HRM and Corporate IntranetsHRM and Corporate Intranets

• Corporate intranet uses• Process common HRM transactions

• Allow around-the-clock HRM services

• Disseminate information faster than through previous company channels

• Collect information from employees online

• Allow HRM tasks to be performed with little HRM department intervention

• Training

Employee Self-ServiceEmployee Self-Service

• Intranet applications can allow employees to• View benefits

• Enter travel and expense reports

• Verify employment and salary information

• Access and update personal information

• Enter time-sensitive data

Accounting Information SystemsAccounting Information Systems

• The oldest and most widely used information system in business• Records and reports business transactions and

economic events

• Produces financial statements

• Forecasts future conditions

• Typically consists of• Order processing

• Inventory control

• Accounts receivable

• Accounts payable

• Payroll

• General ledger systems

Financial Management SystemsFinancial Management Systems

• Supports business managers and professionals making decisions concerning• The financing of a business

• The allocation and control of financial resources within a business

Financial Management System ExampleFinancial Management System Example

Enterprise Business SystemsEnterprise Business Systems

What is CRM?What is CRM?

• Managing the full range of the customer relationship involves• Providing customer-facing employees with a

single, complete view of every customer at every touch point and across all channels

• Providing the customer with a single, complete view of the company and its extended channels

• CRM uses IT to create a cross-functional enterprise system that integrates and automates many of the customer-serving processes

Application Clusters in CRMApplication Clusters in CRM

Contact and Account ManagementContact and Account Management

• CRM helps sales, marketing, and service professionals capture and track relevant data about• Every past and planned contact with prospects

and customers• Other business and life cycle events of customers

• Data are captured through customer touchpoints• Telephone, fax, e-mail• Websites, retail stores, kiosks• Personal contact

SalesSales

• A CRM system provides sales reps with the tools and data resources they need to• Support and manage their sales activities• Optimize cross- and up-selling

• CRM also provides the means to check on a customer’s account status and history before scheduling a sales call

Marketing and FulfillmentMarketing and Fulfillment

• CRM systems help with direct marketing campaigns by automatic such tasks as• Qualifying leads for targeted marketing• Scheduling and tracking mailings• Capturing and managing responses• Analyzing the business value of the campaign• Fulfilling responses and requests

Customer Service and SupportCustomer Service and Support

• A CRM system gives service reps real-time access to the same database used by sales and marketing• Requests for service are created, assigned,

and managed• Call center software routes calls to agents• Help desk software provides service data

and suggestions for solving problems

• Web-based self-service enables customers to access personalized support information

Retention and Loyalty ProgramsRetention and Loyalty Programs

• It costs 6 times more to sell to a new customer

• An unhappy customer will tell 8-10 others

• Boosting customer retention by 5 percent can boost profits by 85 percent

• The odds of selling to an existing customer are 50 percent; a new one 15 percent

• About 70 percent of customers will do business with the company again if a problem is quickly taken care of

Retention and Loyalty ProgramsRetention and Loyalty Programs

• Enhancing and optimizing customer retention and loyalty is a primary objective of CRM• Identify, reward, and market to the most loyal

and profitable customers• Evaluate targeted marketing and relationship

programs

The Three Phases of CRMThe Three Phases of CRM

Benefits of CRMBenefits of CRM

• Benefits of CRM• Identify and target the best customers• Real-time customization and personalization

of products and services• Track when and how a customer contacts

the company• Provide a consistent customer experience• Provide superior service and support across

all customer contact points

CRM FailuresCRM Failures

• Business benefits of CRM are not guaranteed• 50 percent of CRM projects did not produce

promised results• 20 percent damaged customer relationships

• Reasons for failure• Lack of understanding and preparation• Not solving business process problems first• No participation on part of business stakeholders

involved

Trends in CRMTrends in CRM

• Operational CRM• Supports customer interaction with greater

convenience through a variety of channels• Synchronizes customer interactions consistently

across all channels• Makes the company easier to do business with

• Analytical CRM• Extracts in-depth customer history, preferences,

and profitability from databases• Allows prediction of customer value

and behavior• Allows forecast of demand• Helps tailor information and offers to

customer needs

• Collaborative CRM• Easy collaboration with customers,

suppliers, and partners• Improves efficiency and integration

throughout supply chain• Greater responsiveness to customer needs

through outside sourcing of products and services

• Portal-based CRM• Provides users with tools and information

that fit their needs• Empowers employees to respond to

customer demands more quickly• Helps reps become truly customer-faced• Provides instant access to all internal and

external customer information

ERP: The Business BackboneERP: The Business Backbone

• ERP is a cross-functional enterprise backbone that integrates and automates processes within• Manufacturing• Logistics• Distribution• Accounting• Finance• Human resources

What is ERP?What is ERP?

• Enterprise resource planning is a cross-functional enterprise system • An integrated suite of software modules• Supports basic internal business processes• Facilitates business, supplier, and customer

information flows

ERP Application ComponentsERP Application Components

ERP Process and Information FlowsERP Process and Information Flows

Benefits and Challenges of ERPBenefits and Challenges of ERP

• ERP Business Benefits• Quality and efficiency• Decreased costs• Decision support• Enterprise agility

• ERP Costs• Risks and costs are considerable• Hardware and software are a small part

of total costs• Failure can cripple or kill a business

Costs of Implementing a New ERPCosts of Implementing a New ERP

Causes of ERP FailuresCauses of ERP Failures

• Most common causes of ERP failure• Under-estimating the complexity of planning,

development, training• Failure to involve affected employees in

planning and development• Trying to do too much too fast• Insufficient training• Insufficient data conversion and testing• Over-reliance on ERP vendor or consultants

Trends in ERPTrends in ERP

Supply Chain Management (SCM)Supply Chain Management (SCM)

• Fundamentally, supply chain management helps a company• Get the right products• To the right place• At the right time• In the proper quantity• At an acceptable cost

Goals of SCMGoals of SCM

• The goal of SCM is to efficiently• Forecast demand• Control inventory• Enhance relationships with customers, suppliers,

distributors, and others• Receive feedback on the status of every link in

the supply chain

What is a Supply Chain?What is a Supply Chain?

• The interrelationships• With suppliers, customers, distributors, and

other businesses • Needed to design, build, and sell a product

• Each supply chain process should add value to the products or services a company produces• Frequently called a value chain

Supply Chain Life CycleSupply Chain Life Cycle

Electronic Data InterchangeElectronic Data Interchange

• EDI• One of the earliest uses of information

technology for supply chain management

• The electronic exchange of business transaction documents between supply chain trading partners

• The almost complete automation of an e-commerce supply chain process

• Many transactions occur over the Internet, using secure virtual private networks

Typical EDI ActivitiesTypical EDI Activities

Roles and Activities of SCM in BusinessRoles and Activities of SCM in Business

Planning & Execution Functions of SCMPlanning & Execution Functions of SCM

• Planning• Supply chain design• Collaborative demand and supply planning

• Execution• Materials management• Collaborative manufacturing• Collaborative fulfillment• Supply chain event management• Supply chain performance management

Benefits and Challenges of SCMBenefits and Challenges of SCM

• Key Benefits• Faster, more accurate order processing• Reductions in inventory levels• Quicker times to market• Lower transaction and materials costs• Strategic relationships with supplier

Goals and Objectives of SCMGoals and Objectives of SCM

Benefits and Challenges of SCMBenefits and Challenges of SCM

• Key Challenges• Lack of demand planning knowledge, tools,

and guidelines• Inaccurate data provided by other information

systems• Lack of collaboration among marketing,

production, and inventory management• SCM tools are immature, incomplete, and

hard to implement

Trends in SCMTrends in SCM

Electronic Commerce SystemsElectronic Commerce Systems

The Scope of e-CommerceThe Scope of e-Commerce

E-Commerce TechnologiesE-Commerce Technologies

Categories of e-CommerceCategories of e-Commerce

• Business-to-Consumer• Virtual storefronts, multimedia catalogs,

interactive order processing, electronic payment, online customer support

• Business-to-Business• Electronic business marketplaces, direct links

between businesses, auctions and exchanges

• Consumer-to-Consumer• Online auctions, posting to newspaper sites,

personal websites, e-commerce portals

Essential e-Commerce ArchitectureEssential e-Commerce Architecture

Access Control and SecurityAccess Control and Security

• E-commerce processes must establish mutual trust and secure access between parties• User names and passwords• Encryption key• Digital certificates and signatures

• Restricted access areas• Other people’s accounts• Restricted company data• Webmaster administration areas

Profiling and PersonalizingProfiling and Personalizing

• Profiling gathers data on you and your website behavior and choices• User registration• Cookie files and tracking software• User feedback

• Profiling is used for• Personalized (one-to-one) marketing• Authenticating identity• Customer relationship management• Marketing planning• Website management

Search ManagementSearch Management

• Search processes help customers find the specific product or service they want• E-commerce software packages often include

a website search engine• A customized search engine may be acquired

from companies like Google or Requisite Technology

• Searches are often on content or by parameters

Content and Catalog ManagementContent and Catalog Management

• Content Management Software• Helps develop, generate, deliver, update, and

archive text and multimedia information at e-commerce websites

• Catalog Management Software• Helps generate and manage catalog content

• Catalog and content management software works with profiling tools to personalize content• Includes product configuration and

mass customization

Workflow ManagementWorkflow Management

• E-business and e-commerce workflow manage-ment depends on a workflow software engine• Contains software model of business processes

• Workflow models express predefined• Sets of business rules• Roles of stakeholders• Authorization requirements• Routing alternative• Databases used• Task sequences

Example of Workflow ManagementExample of Workflow Management

Event NotificationEvent Notification

• Most e-commerce applications are event driven• Responds to such things as customer’s first

website visit and payments• Monitors all e-commerce processes• Records all relevant events, including problem

situations• Notifies all involved stakeholders• Works in conjunction with user-profiling software

Collaboration and TradingCollaboration and Trading

• Processes that support vital collaboration arrangements and trading services• Needed by customers, suppliers, and other

stakeholders

• Online communities of interest• E-mail, chat, discussion groups• Enhances customer service• Builds loyalty

Electronic Payment ProcessesElectronic Payment Processes

• Complex processes• Near-anonymous and electronic nature

of transactions• Many security issues• Wide variety of debit and credit alternatives• Financial institutions may be part of the process

Electronic Payment ProcessesElectronic Payment Processes

• Web Payment Processes• Shopping cart process• Credit card payment process• Debit and other more complex processes

• Electronic Funds Transfer (EFT)• Major payment system in banking, retail• Variety of information technologies capture

and process money and credit card transfers• Most point-of-sale terminals in retail stores

are networked to bank EFT systems

Electronic Payment ExampleElectronic Payment Example

Securing Electronic PaymentsSecuring Electronic Payments

• Network sniffers easily recognize credit card formats• Encrypt data between customer and merchant• Encrypt data between customer and financial

institution• Take sensitive information off-line

E-Commerce Application TrendsE-Commerce Application Trends

E-Commerce Success FactorsE-Commerce Success Factors

• Some of the success factors in e-commerce• Selection and value• Performance and service• Look and feel• Advertising and incentives• Personal attention (one-to-one marketing)• Community relationships• Security and reliability

Differences in MarketingDifferences in Marketing

Web Store RequirementsWeb Store Requirements

Developing a Web StoreDeveloping a Web Store

• Build a website• Choose or set up web hosting• Use simple design tools and templates• Include a shopping cart and payment support

• Market the website• Include Web page and e-mail advertising

and promotions• Exchange advertising with other Web stores• Register with search engines and directories• Sign up for affiliate programs

Serving Your CustomersServing Your Customers

• Convert visitors into loyal customers• Develop one-to-one relationship with customers• Create incentives to encourage registration• Use Web cookies to identify visitors• Use tracking services to record and analyze

website behavior and customer preferences• Create an attractive, friendly, efficient store• Offer fast order processing and payment• Notify when orders are processed and shipped• Provide links to related websites

Managing a Web StoreManaging a Web Store

• Manage both the business and the website• Record and analyze traffic, inventory, sales• Use CRM features to help retain customers• Link sales, inventory data to accounting systems

• Operate 24 hours a day, seven day a week

• Protect transactions and customer records• Use security monitors and firewalls• Use redundant systems and power sources• Employ passwords and encryption• Offer 24-hour tech support

B2B E-CommerceB2B E-Commerce

• B2B is the wholesale and supply side of the commercial process• Businesses buy, sell, or trade with other

businesses

• Relies on multiple electronic information technologies• Catalog systems• Trading systems• Data interchange• Electronic funds transfers

E-Commerce MarketplacesE-Commerce Marketplaces

• One to Many• Sell-side marketplaces• One supplier dictates product offerings and prices

• Many to One• Buy-side marketplaces• Many suppliers bid for the business of a buyer

• Some to Many• Distribution marketplaces• Unites suppliers who combine their product

catalogs to attract a larger audience

E-Commerce MarketplacesE-Commerce Marketplaces

• Many to Some• Procurement marketplaces• Unites major buyers who combine purchasing

catalogs• Attracts more competition and thus lower prices

• Many to Many• Auction marketplaces• Dynamically optimizes prices

E-Commerce PortalsE-Commerce Portals

• B2B e-commerce portals offer multiple marketplaces• Catalogs• Exchanges• Auctions

• Often developed and hosted by third-party market-maker companies• Infomediaries serve as intermediaries in

e-business and e-commerce transactions

B2B E-Commerce Web PortalB2B E-Commerce Web Portal

Clicks and BricksClicks and Bricks

• Success will go to those who can integrate Internet initiatives with traditional operations• Merging operations has trade-offs

E-Commerce IntegrationE-Commerce Integration

• The business case for merging e-commerce with traditional business operations• Move strategic capabilities in traditional

operations to the e-commerce business• Integrate e-commerce into the traditional

business• Sharing of established brands• Sharing of key business information• Joint buying power and distribution efficiencies

Other Clicks and Bricks StrategiesOther Clicks and Bricks Strategies

• Partial e-commerce integration• Joint ventures and strategic partnerships

• Complete separation• Spin-off of an independent e-commerce company

• Barnes and Noble’s experience• Spun off independent e-commerce company• Gained venture capital, entrepreneurial culture,

and flexibility• Attracted quality management• Accelerated decision making• Failed to gain market share

E-Commerce Channel ChoicesE-Commerce Channel Choices

• An e-commerce channel is the marketing or sales channel created by a company for its e-commerce activities• There is no universal strategy or e-commerce

channel choice• Both e-commerce integration and separation

have major business benefits and shortcoming• Most businesses are implementing some

measure of clicks and bricks integration

E-Commerce Strategy ChecklistE-Commerce Strategy Checklist

• Questions to ask and answer• What audiences are we attempting to reach?• What action do we want those audiences to take?• Who owns the e-commerce channel within the

organization?• Is the e-commerce channel planned alongside

other channels?• Is there a process for generating, approving,

releasing, and withdrawing content?• Will our brand translate to the new channel?• How will we market the channel itself?

Decision Support SystemsDecision Support Systems

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Levels of Managerial Decision MakingLevels of Managerial Decision Making

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Decision StructureDecision Structure

• Structured (operational)• The procedures to follow when decision

is needed can be specified in advance

• Unstructured (strategic)• It is not possible to specify in advance

most of the decision procedures to follow

• Semi-structured (tactical)• Decision procedures can be pre-specified,

but not enough to lead to the correct decision

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Management Information

SystemsDecision Support

Systems

Decision support provided

Provide information about the performance of the

organization

Provide information and techniques to analyze

specific problems

Information form and frequency

Periodic, exception, demand, and push reports

and responses

Interactive inquiries and responses

Information format

Prespecified, fixed format Ad hoc, flexible, and adaptable format

Information processing methodology

Information produced by extraction and manipulation

of business data

Information produced by analytical modeling of

business data

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Decision Support TrendsDecision Support Trends

• The emerging class of applications focuses on• Personalized decision support• Modeling• Information retrieval• Data warehousing• What-if scenarios• Reporting

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Business Intelligence ApplicationsBusiness Intelligence Applications

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• Decision support systems use the following to support the making of semi-structured business decisions• Analytical models• Specialized databases• A decision-maker’s own insights and judgments• An interactive, computer-based modeling process

• DSS systems are designed to be ad hoc, quick-response systems that are initiated and controlled by decision makers

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DSS ComponentsDSS Components

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DSS Model BaseDSS Model Base

• Model Base• A software component that consists of

models used in computational and analytical routines that mathematically express relations among variables

• Spreadsheet Examples• Linear programming• Multiple regression forecasting• Capital budgeting present value

10-375

Applications of Statistics and ModelingApplications of Statistics and Modeling

• Supply Chain: simulate and optimize supply chain flows, reduce inventory, reduce stock-outs

• Pricing: identify the price that maximizes yield or profit

• Product and Service Quality: detect quality problems early in order to minimize them

• Research and Development: improve quality, efficacy, and safety of products and services

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Management Information SystemsManagement Information Systems

• The original type of information system that supported managerial decision making• Produces information products that support

many day-to-day decision-making needs

• Produces reports, display, and responses

• Satisfies needs of operational and tactical decision makers who face structured decisions

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Management Reporting AlternativesManagement Reporting Alternatives

• Periodic Scheduled Reports• Prespecified format on a regular basis

• Exception Reports• Reports about exceptional conditions• May be produced regularly or when an

exception occurs

• Demand Reports and Responses• Information is available on demand

• Push Reporting• Information is pushed to a networked computer

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Example of Push ReportingExample of Push Reporting

10-379

Online Analytical ProcessingOnline Analytical Processing

• OLAP• Enables managers and analysts to examine

and manipulate large amounts of detailed and consolidated data from many perspectives

• Done interactively, in real time, with rapid response to queries

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Online Analytical OperationsOnline Analytical Operations

• Consolidation• Aggregation of data• Example: data about sales offices rolled up

to the district level

• Drill-Down• Display underlying detail data• Example: sales figures by individual product

• Slicing and Dicing• Viewing database from different viewpoints• Often performed along a time axis

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OLAP ConfigurationOLAP Configuration

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Geographic Information SystemsGeographic Information Systems

• GIS• DSS uses geographic databases to construct

and display maps and other graphic displays

• Supports decisions affecting the geographic distribution of people and other resources

• Often used with Global Positioning Systems (GPS) devices

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Data Visualization SystemsData Visualization Systems

• DVS• Represents complex data using interactive,

three-dimensional graphical forms (charts, graphs, maps)

• Helps users interactively sort, subdivide, combine, and organize data while it is in its graphical form

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DVS ExampleDVS Example

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Using Decision Support SystemsUsing Decision Support Systems

• Using a decision support system involves an interactive analytical modeling process• Decision makers are not demanding

pre-specified information• They are exploring possible alternatives

• What-If Analysis• Observing how changes to selected variables

affect other variables

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Using Decision Support SystemsUsing Decision Support Systems

• Sensitivity Analysis• Observing how repeated changes to a single

variable affect other variables

• Goal-seeking Analysis• Making repeated changes to selected variables

until a chosen variable reaches a target value

• Optimization Analysis• Finding an optimum value for selected variables,

given certain constraints

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Data MiningData Mining

• Provides decision support through knowledge discovery• Analyzes vast stores of historical business data• Looks for patterns, trends, and correlations• Goal is to improve business performance

• Types of analysis• Regression• Decision tree• Neural network• Cluster detection• Market basket analysis

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Analysis of Customer DemographicsAnalysis of Customer Demographics

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Market Basket AnalysisMarket Basket Analysis

• One of the most common uses for data mining• Determines what products customers purchase

together with other products

• Results affect how companies• Market products• Place merchandise in the store• Lay out catalogs and order forms• Determine what new products to offer• Customize solicitation phone calls

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Executive Information SystemsExecutive Information Systems

• EIS• Combines many features of MIS and DSS• Provide top executives with immediate and

easy access to information• Identify factors that are critical to accomplishing

strategic objectives (critical success factors)• So popular that it has been expanded to

managers, analysis, and other knowledge workers

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Features of an EIS Features of an EIS

• Information presented in forms tailored to the preferences of the executives using the system• Customizable graphical user interfaces

• Exception reports

• Trend analysis

• Drill down capability

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Enterprise Information PortalsEnterprise Information Portals

• An EIP is a Web-based interface and integration of MIS, DSS, EIS, and other technologies• Available to all intranet users and select

extranet users• Provides access to a variety of internal and

external business applications and services• Typically tailored or personalized to the user

or groups of users• Often has a digital dashboard• Also called enterprise knowledge portals

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Dashboard ExampleDashboard Example

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Enterprise Information Portal ComponentsEnterprise Information Portal Components

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Enterprise Knowledge PortalEnterprise Knowledge Portal

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Artificial Intelligence (AI)Artificial Intelligence (AI)

• AI is a field of science and technology based on• Computer science• Biology• Psychology• Linguistics• Mathematics• Engineering

• The goal is to develop computers than can simulate the ability to think• And see, hear, walk, talk, and feel as well

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Attributes of Intelligent BehaviorAttributes of Intelligent Behavior

• Some of the attributes of intelligent behavior• Think and reason• Use reason to solve problems• Learn or understand from experience• Acquire and apply knowledge• Exhibit creativity and imagination• Deal with complex or perplexing situations

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Attributes of Intelligent BehaviorAttributes of Intelligent Behavior

• Attributes of intelligent behavior (continued)• Respond quickly and successfully to new

situations• Recognize the relative importance of

elements in a situation• Handle ambiguous, incomplete, or

erroneous information

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Domains of Artificial IntelligenceDomains of Artificial Intelligence

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Cognitive ScienceCognitive Science

• Applications in the cognitive science of AI• Expert systems• Knowledge-based systems• Adaptive learning systems• Fuzzy logic systems• Neural networks• Genetic algorithm software• Intelligent agents

• Focuses on how the human brain works and how humans think and learn

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RoboticsRobotics

• AI, engineering, and physiology are the basic disciplines of robotics• Produces robot machines with computer

intelligence and humanlike physical capabilities

• This area include applications designed to give robots the powers of• Sight or visual perception• Touch• Dexterity• Locomotion• Navigation

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Natural InterfacesNatural Interfaces

• Major thrusts in the area of AI and the development of natural interfaces• Natural languages• Speech recognition• Virtual reality

• Involves research and development in• Linguistics• Psychology• Computer science• Other disciplines

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Latest Commercial Applications of AILatest Commercial Applications of AI

• Decision Support• Helps capture the why as well as the what of

engineered design and decision making

• Information Retrieval• Distills tidal waves of information into simple

presentations• Natural language technology• Database mining

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Latest Commercial Applications of AILatest Commercial Applications of AI

• Virtual Reality• X-ray-like vision enabled by enhanced-reality

visualization helps surgeons• Automated animation and haptic interfaces

allow users to interact with virtual objects

• Robotics• Machine-vision inspections systems• Cutting-edge robotics systems

• From micro robots and hands and legs, to cognitive and trainable modular vision systems

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Expert SystemsExpert Systems

• An Expert System (ES)• A knowledge-based information system

• Contain knowledge about a specific, complex application area

• Acts as an expert consultant to end users

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Components of an Expert SystemComponents of an Expert System

• Knowledge Base• Facts about a specific subject area• Heuristics that express the reasoning procedures

of an expert (rules of thumb)

• Software Resources• An inference engine processes the knowledge

and recommends a course of action• User interface programs communicate with

the end user• Explanation programs explain the reasoning

process to the end user

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Components of an Expert SystemComponents of an Expert System

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Methods of Knowledge RepresentationMethods of Knowledge Representation

• Case-Based • Knowledge organized in the form of cases• Cases are examples of past performance,

occurrences, and experiences

• Frame-Based• Knowledge organized in a hierarchy or

network of frames• A frame is a collection of knowledge about

an entity, consisting of a complex package of data values describing its attributes

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Methods of Knowledge RepresentationMethods of Knowledge Representation

• Object-Based• Knowledge represented as a network of objects• An object is a data element that includes both

data and the methods or processes that act on those data

• Rule-Based• Knowledge represented in the form of rules

and statements of fact• Rules are statements that typically take the

form of a premise and a conclusion (If, Then)

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Expert System Application CategoriesExpert System Application Categories

• Decision Management• Loan portfolio analysis• Employee performance evaluation• Insurance underwriting

• Diagnostic/Troubleshooting• Equipment calibration• Help desk operations• Medical diagnosis• Software debugging

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• Design/Configuration• Computer option installation• Manufacturability studies• Communications networks

• Selection/Classification• Material selection• Delinquent account identification• Information classification• Suspect identification

• Process Monitoring/Control

10-412

• Process Monitoring/Control• Machine control (including robotics)• Inventory control• Production monitoring• Chemical testing

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Benefits of Expert SystemsBenefits of Expert Systems

• Captures the expertise of an expert or group of experts in a computer-based information system• Faster and more consistent than an expert• Can contain knowledge of multiple experts• Does not get tired or distracted• Cannot be overworked or stressed• Helps preserve and reproduce the knowledge

of human experts

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Limitations of Expert SystemsLimitations of Expert Systems

• The major limitations of expert systems• Limited focus• Inability to learn• Maintenance problems• Development cost• Can only solve specific types of problems

in a limited domain of knowledge

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Developing Expert SystemsDeveloping Expert Systems

• Suitability Criteria for Expert Systems• Domain: the domain or subject area of

the problem is small and well-defined

• Expertise: a body of knowledge, techniques, and intuition is needed that only a few people possess

• Complexity: solving the problem is a complex task that requires logical inference processing

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Developing Expert SystemsDeveloping Expert Systems

• Suitability Criteria for Expert Systems• Structure: the solution process must be able

to cope with ill-structured, uncertain, missing, and conflicting data and a changing problem situation

• Availability: an expert exists who is articulate, cooperative, and supported by the management and end users involved in the development process

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Development ToolDevelopment Tool

• Expert System Shell• The easiest way to develop an expert system

• A software package consisting of an expert system without its knowledge base

• Has an inference engine and user interface programs

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Knowledge EngineeringKnowledge Engineering

• A knowledge engineer• Works with experts to capture the knowledge

(facts and rules of thumb) they possess

• Builds the knowledge base, and if necessary, the rest of the expert system

• Performs a role similar to that of systems analysts in conventional information systems development

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Neural NetworksNeural Networks

• Computing systems modeled after the brain’s mesh-like network of interconnected processing elements (neurons)• Interconnected processors operate in parallel

and interact with each other• Allows the network to learn from the data it

processes

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Fuzzy LogicFuzzy Logic

• Fuzzy logic• Resembles human reasoning• Allows for approximate values and

inferences and incomplete or ambiguous data• Uses terms such as “very high” instead of

precise measures• Used more often in Japan than in the U.S.• Used in fuzzy process controllers used in

subway trains, elevators, and cars

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Example of Fuzzy Logic Rules and QueryExample of Fuzzy Logic Rules and Query

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Genetic AlgorithmsGenetic Algorithms

• Genetic algorithm software • Uses Darwinian, randomizing, and other

mathematical functions• Simulates an evolutionary process, yielding

increasingly better solutions to a problem• Being uses to model a variety of scientific,

technical, and business processes• Especially useful for situations in which

thousands of solutions are possible

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Virtual Reality (VR)Virtual Reality (VR)

• Virtual reality is a computer-simulated reality• Fast-growing area of artificial intelligence• Originated from efforts to build natural, realistic,

multi-sensory human-computer interfaces• Relies on multi-sensory input/output devices• Creates a three-dimensional world through

sight, sound, and touch• Also called telepresence

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Typical VR ApplicationsTypical VR Applications

• Current applications of virtual reality• Computer-aided design• Medical diagnostics and treatment• Scientific experimentation• Flight simulation• Product demonstrations• Employee training• Entertainment

10-425

Intelligent AgentsIntelligent Agents

• A software surrogate for an end user or a process that fulfills a stated need or activity• Uses built-in and learned knowledge base

to make decisions and accomplish tasks in a way that fulfills the intentions of a user

• Also call software robots or bots

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User Interface AgentsUser Interface Agents

• Interface Tutors – observe user computer operations, correct user mistakes, provide hints/advice on efficient software use

• Presentation Agents – show information in a variety of forms/media based on user preferences

• Network Navigation Agents – discover paths to information, provide ways to view it based on user preferences

• Role-Playing – play what-if games and other roles to help users understand information and make better decisions

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Information Management AgentsInformation Management Agents

• Search Agents – help users find files and databases, search for information, and suggest and find new types of information products, media, resources

• Information Brokers – provide commercial services to discover and develop information resources that fit business or personal needs

• Information Filters – Receive, find, filter, discard, save, forward, and notify users about products received or desired, including e-mail, voice mail, and other information media

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