decision support chapter 10. overview databases are really information technology decision support...
Post on 20-Dec-2015
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TRANSCRIPT
OverviewDatabases are really information technology
Decision Support is a business application that actually uses databases
Levels of Management Decision Making
Strategic – group of executives develop overall organizational goals, strategies, policies, and objectives as part of a strategic planning processTactical – managers and business professionals in self-directed teams develop short- and medium-range plans, schedules and budgets and specify the policies, procedures and business objectives for their subunitsOperational – managers or members of self-directed teams develop short-range plans such as weekly production schedules
Decision StructureStructured – situations where the procedures to follow when a decision is needed can be specified in advance
Unstructured – decision situations where it is not possible to specify in advance most of the decision procedures to follow
Semi structured - decision procedures that can be prespecified, but not enough to lead to a definite recommended decision
Business Intelligence (BI)Text: gathering the right information in a timely manner and usable form.Analyzing information so that it can have a positive impact on business strategy, tactics, or operations.Which markets to enter, customers to target, products to promote ?More about BI later in this course.
It’s a “dog eat dog” world!Competition is intensifying GlobalizationInternet – anywhere, anytime
Competition is a click away!
Speed of change is increasing
We do this by:Empower employees to research their own decisions (not just CEO).Provide easy access to data and tools to analyze the data
Data warehouse – Demand reports!Encourage sharing across
Departments – collective intelligenceThe entire enterprise
BI techniquesData mining – patterns and trends in dataOLAP – online analytical processing
Multidimensional analysisRegion by salesperson by product by time
Decision SupportDrill down /drill up for correct level of detail
Recap: Data MiningDiscovery of patterns in dataTrendsRelationships and behaviors
Using statistics, AIGenerates & tests hypotheses
Data mining vs. OLAPData mining
Looking for patterns in data
Online analytical processing (OLAP)Multidimensional analysis
OLAPTop-down, query drivenMust know data well – interactionRelationships between data:
Geography (Region)Sales person Product
BI applications:Market Segmentation
Common characteristics of customers who buy the same products from your company.
Direct marketingIdentifies which prospects should be included in a mailing list to obtain the highest response rate.
Market basket analysisIdentifies what products or services are commonly purchased together.
Peanut butter & jellyCereal and milk
Department needsSALES
Which products are selling toWhich demographicsWhich marketsWhich sales channel ?
Other needs:Manage Customer relationships
Need a 360 degree view of the customer
Improve product planningproduction planningcontract negotiations with suppliers
Improve marketing and advertising programsReduce costs and find new opportunities !
ExampleAuto maker Fiat found that it was paying 10 cents more for a lug nut for one vehicle than another.Renegotiated contract saving $100,000 per year.Do this for 100 parts…
Decision Support Systems (DSS)Definition:
Computer-based information systems that provide interactive information support to managers and business professionals during the decision-making process using the following to make semi structured business decisions
Analytical modelsSpecialized databasesA decision maker’s own insights and judgmentsAn interactive, computer-based modeling process