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Page 1: McGraw-Hill/Irwin © The McGraw-Hill Companies, All Rights Reserved UNIT THREE Streamlining Business Operations

McGraw-Hill/Irwin © The McGraw-Hill Companies, All Rights Reserved

UNIT THREE

Streamlining Business Operations

Page 2: McGraw-Hill/Irwin © The McGraw-Hill Companies, All Rights Reserved UNIT THREE Streamlining Business Operations

9-2

UNIT THREE

• Chapter Nine – Enabling the Organization—Decision Making

• Chapter Ten – Extending the Organization— Supply Chain Management

• Chapter Eleven – Building a Customer-centric Organization—Customer Relationship Management

• Chapter Twelve – Integrating the Organization from End to End—Enterprise Resource Planning

Page 3: McGraw-Hill/Irwin © The McGraw-Hill Companies, All Rights Reserved UNIT THREE Streamlining Business Operations

9-3

UNIT THREE

• Decision-enabling, problem-solving, and opportunity-seizing systems

Page 4: McGraw-Hill/Irwin © The McGraw-Hill Companies, All Rights Reserved UNIT THREE Streamlining Business Operations

McGraw-Hill/Irwin © The McGraw-Hill Companies, All Rights Reserved

CHAPTER 9

Enabling the

Organization—Decision Making

Page 5: McGraw-Hill/Irwin © The McGraw-Hill Companies, All Rights Reserved UNIT THREE Streamlining Business Operations

9-5

LEARNING OUTCOMES

9.1 Define the systems organizations use to make decisions and gain competitive advantages

9.2 Describe the three quantitative models typically used by decision support systems

Page 6: McGraw-Hill/Irwin © The McGraw-Hill Companies, All Rights Reserved UNIT THREE Streamlining Business Operations

9-6

LEARNING OUTCOMES

9.3 Describe the relationship between digital dashboards and executive information systems

9.4 List and describe four types of artificial intelligence systems

Page 7: McGraw-Hill/Irwin © The McGraw-Hill Companies, All Rights Reserved UNIT THREE Streamlining Business Operations

9-7

DECISION MAKING

Page 8: McGraw-Hill/Irwin © The McGraw-Hill Companies, All Rights Reserved UNIT THREE Streamlining Business Operations

9-8

DECISION MAKING

• Model – a simplified representation or abstraction of reality

• IT systems in an enterprise

Page 9: McGraw-Hill/Irwin © The McGraw-Hill Companies, All Rights Reserved UNIT THREE Streamlining Business Operations

9-9

TRANSACTION PROCESSING SYSTEMS

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

Page 10: McGraw-Hill/Irwin © The McGraw-Hill Companies, All Rights Reserved UNIT THREE Streamlining Business Operations

9-10

TRANSACTION PROCESSING SYSTEMS

• Transaction processing system - the basic business system that serves the operational level (analysts) in an organization

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

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

Page 11: McGraw-Hill/Irwin © The McGraw-Hill Companies, All Rights Reserved UNIT THREE Streamlining Business Operations

9-11

DECISION SUPPORT SYSTEMS

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

• Three quantitative models used by DSSs include:1. Sensitivity analysis – the study of the impact that

changes in one (or more) parts of the model have on other parts of the model

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

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

Page 12: McGraw-Hill/Irwin © The McGraw-Hill Companies, All Rights Reserved UNIT THREE Streamlining Business Operations

9-12

DECISION SUPPORT SYSTEMS

• What-if analysis

Page 13: McGraw-Hill/Irwin © The McGraw-Hill Companies, All Rights Reserved UNIT THREE Streamlining Business Operations

9-13

DECISION SUPPORT SYSTEMS

• Goal-seeking analysis

Page 14: McGraw-Hill/Irwin © The McGraw-Hill Companies, All Rights Reserved UNIT THREE Streamlining Business Operations

9-14

DECISION SUPPORT SYSTEMS

• Interaction between a TPS and a DSS

Page 15: McGraw-Hill/Irwin © The McGraw-Hill Companies, All Rights Reserved UNIT THREE Streamlining Business Operations

9-15

EXECUTIVE INFORMATION SYSTEMS

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

• Most EISs offering the following capabilities:– Consolidation – involves the aggregation of

information and features simple roll-ups to complex groupings of interrelated information

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

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

Page 16: McGraw-Hill/Irwin © The McGraw-Hill Companies, All Rights Reserved UNIT THREE Streamlining Business Operations

9-16

EXECUTIVE INFORMATION SYSTEMS

• Interaction between a TPS and an EIS

Page 17: McGraw-Hill/Irwin © The McGraw-Hill Companies, All Rights Reserved UNIT THREE Streamlining Business Operations

9-17

EXECUTIVE INFORMATION SYSTEMS

• Digital dashboard – integrates information from multiple components and presents it in a unified display

Page 18: McGraw-Hill/Irwin © The McGraw-Hill Companies, All Rights Reserved UNIT THREE Streamlining Business Operations

9-18

ARTIFICIAL INTELLIGENCE (AI)

• Intelligent system – various commercial applications of artificial intelligence

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

Page 19: McGraw-Hill/Irwin © The McGraw-Hill Companies, All Rights Reserved UNIT THREE Streamlining Business Operations

9-19

ARTIFICIAL INTELLIGENCE (AI)

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

Page 20: McGraw-Hill/Irwin © The McGraw-Hill Companies, All Rights Reserved UNIT THREE Streamlining Business Operations

9-20

ARTIFICIAL INTELLIGENCE (AI)

• Four most common categories of AI include:1. Expert system – computerized advisory

programs that imitate the reasoning processes of experts in solving difficult problems

2. Neural Network – attempts to emulate the way the human brain works– Fuzzy logic – a mathematical method of handling

imprecise or subjective information

Page 21: McGraw-Hill/Irwin © The McGraw-Hill Companies, All Rights Reserved UNIT THREE Streamlining Business Operations

9-21

ARTIFICIAL INTELLIGENCE (AI)

• Four most common categories of AI include:3. Genetic algorithm – an artificial intelligent

system that mimics the evolutionary, survival-of-the-fittest process to generate increasingly better solutions to a problem

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

Page 22: McGraw-Hill/Irwin © The McGraw-Hill Companies, All Rights Reserved UNIT THREE Streamlining Business Operations

9-22

DATA MINING

• Data-mining software includes many forms of AI such as neural networks and expert systems

Page 23: McGraw-Hill/Irwin © The McGraw-Hill Companies, All Rights Reserved UNIT THREE Streamlining Business Operations

9-23

OPENING CASE STUDY QUESTIONSSecondLife

1. How could companies use Second Life to enhance decision making for a new product or service?

2. How could financial companies use neural networks in Second Life to help their businesses?

Page 24: McGraw-Hill/Irwin © The McGraw-Hill Companies, All Rights Reserved UNIT THREE Streamlining Business Operations

9-24

OPENING CASE STUDY QUESTIONSSecondLife

3. How could a company such as Nike use decision support systems on Second Life to help its business?

4. How could an apparel company use Second Life to build a digital dashboard to monitor virtual operations?

Page 25: McGraw-Hill/Irwin © The McGraw-Hill Companies, All Rights Reserved UNIT THREE Streamlining Business Operations

9-25

CHAPTER NINE CASEDARPA Grand Challenge

• The DARPA Grand Challenge was designed to leverage American ingenuity to develop autonomous vehicle technologies that can be used by the military

• With the goal of saving lives on the battlefield, the DARPA Grand Challenge brings together individuals and organizations from industry, the R&D community, government, the armed services, and academia, and includes students, backyard inventors, and automotive enthusiasts

Page 26: McGraw-Hill/Irwin © The McGraw-Hill Companies, All Rights Reserved UNIT THREE Streamlining Business Operations

9-26

CHAPTER NINE CASE QUESTIONS

1. Describe how the DoD is using AI to improve its operations and save lives

2. Explain why the DoD would use an event, such as the DARPA Grand Challenge, to further technological innovation

Page 27: McGraw-Hill/Irwin © The McGraw-Hill Companies, All Rights Reserved UNIT THREE Streamlining Business Operations

9-27

CHAPTER NINE CASE QUESTIONS

3. Describe how autonomous vehicles could be used by organizations around the world to improve business efficiency and effectiveness

4. The Ansari X is another technological innovation competition focusing on spacecraft. To win the $10 million Ansari X Prize, a private spacecraft had to be the first to carry the weight equivalent of three people to an altitude of 62.14 miles twice within two weeks. SpaceShipOne, a privately built spacecraft, won the $10 million Ansari X Prize on October 4, 2004. Describe the potential business impacts of the Ansari X competition


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