Enabling the Organization – Decision Making

Decision Making

•Reasons for the growth of decision-making information systems

–People need to analyze large amounts of information

–People must make decisions quickly

–People must apply sophisticated analysis techniques, such as modeling and forecasting, to make good decisions

–People must protect the corporate asset of organizational information

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

Decision Support Systems

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

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•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

  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

  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