Bài giảng Business Driven Information Systems - Chapter two: Decisions and processes value driven business

CHAPTER TWODECISIONS AND PROCESSESVALUE DRIVEN BUSINESSCHAPTER TWO OVERVIEWSECTION 2.1 – Decision Support SystemsMaking Business Decisions Metrics: Measuring SuccessSupport: Enhancing Decision Making with MISThe Future: Artificial IntelligenceSECTION 2.2 – Business ProcessesEvaluating Business ProcessesModels: Measuring PerformanceSupport: Enhancing Business Processes with MISThe Future: Business Process ManagementSECTION 2.1DECISION SUPPORT SYSTEMSLEARNING OUTCOMESExplain the importance of decision making for managers at each of the three primary organization levels along with the associated decision characteristicsDefine critical success factors (CSFs) and key performance indicators (KPIs), and explain how managers use them to measure the success of MIS projectsClassify the different operational, managerial, and strategic support systems, and explain how managers can use them to make decisions & gain competitive advantageDescribe artificial intelligence and identify its five main typesMAKING BUSINESS DECISIONSManagerial decision-making challengesAnalyze large amounts of informationApply sophisticated analysis techniquesMake decisions quicklyThe Decision-Making ProcessThe six-step decision-making processProblem identificationData collectionSolution generationSolution testSolution selectionSolution implementationDecision-Making Essentials Decision-making and problem-solving occur at each level in an organizationDecision-Making EssentialsOperational decision making - Employees develop, control, and maintain core business activities required to run the day-to-day operationsStructured decisions - Situations where established processes offer potential solutionsOPERATIONALDecision-Making EssentialsManagerial decision making – Employees evaluate company operations to identify, adapt to, and leverage changeSemistructured decisions – Occur in situations in which a few established processes help to evaluate potential solutions, but not enough to lead to a definite recommended decision MANAGERIALDecision-Making EssentialsStrategic decision making – Managers develop overall strategies, goals, and objectivesUnstructured decisions – Occurs in situations in which no procedures or rules exist to guide decision makers toward the correct choiceSTRATEGICMETRICS: MEASURING SUCCESSProject – A temporary activity a company undertakes to create a unique product, service, or resultMetrics – Measurements that evaluate results to determine whether a project is meeting its goalsMETRICS: MEASURING SUCCESSCritical success factors (CSFs) – The crucial steps companies make to perform to achieve their goals and objectives and implement strategiesCreate high-quality productsRetain competitive advantagesReduce product costsIncrease customer satisfactionHire and retain the best professionalsMETRICS: MEASURING SUCCESSMETRICS: MEASURING SUCCESSKey performance indicators (KPIs) – The quantifiable metrics a company uses to evaluate progress toward critical success factorsTurnover rates of employeesNumber of product returnsNumber of new customersAverage customer spendingMETRICS: MEASURING SUCCESSExternal KPIMarket share – The portion of the market that a firm captures (external)Internal KPIReturn on investment (ROI) – Indicates the earning power of a projectEfficiency and Effectiveness MetricsEfficiency MIS metrics – Measure the performance of MIS itself, such as throughput, transaction speed, and system availabilityEffectiveness MIS metrics – Measures the impact MIS has on business processes and activities, including customer satisfaction and customer conversation ratesThe Interrelationship Between Efficiency and Effectiveness MetricsIdeal operation occurs in the upper right cornerThe Interrelationship Between Efficiency and Effectiveness MetricsBenchmark – Baseline values the system seeks to attainBenchmarking – A process of continuously measuring system results, comparing those results to optimal system performance (benchmark values), and identifying steps and procedures to improve system performanceSUPPORT: ENHANCING DECISION MAKING WITH MISModel – A simplified representation or abstraction of realityModels help managers to Calculate risks Understand uncertainty Change variables Manipulate time to make decisionsSUPPORT: ENHANCING DECISION MAKING WITH MISTypes of Decision Making MIS SystemsOperational Support SystemsTransaction processing system (TPS) – Basic business system that serves the operational level and assists in making structured decisionsOnline transaction processing (OLTP) - Capturing of transaction and event information using technology to process, store, and updateSource document – The original transaction recordOperational Support SystemsSystems Thinking View of a TPSManagerial Support SystemsOnline analytical processing (OLAP) – Manipulation of information to create business intelligence in support of strategic decision makingDecision support system (DSS) – Models information to support managers and business professionals during the decision-making processManagerial Support SystemsFour quantitative models used by DSSs includeWhat-if analysisSensitivity analysisGoal-seeking analysisOptimization analysis Managerial Support SystemsSystems Thinking View of a DSSManagerial Support SystemsInteraction Between a TPS and DSSStrategic Support SystemsInformation Levels Throughout An OrganizationStrategic Support SystemsExecutive information system (EIS) – A specialized DSS that supports senior level executives within the organizationGranularityVisualization Digital dashboard Strategic Support SystemsInteraction Between a TPS and EISStrategic Support SystemsMost EISs offering the following capabilitiesConsolidationDrill-down Slice-and-diceArtificial intelligence (AI) – Simulates human intelligence such as the ability to reason and learnIntelligent system – Various commercial applications of artificial intelligenceTHE FUTURE: ARTIFICIAL INTELLIGENCE (AI)Artificial Intelligence (AI)Five most common categories of AI 1. Expert system – Computerized advisory programs that imitate the reasoning processes of experts in solving difficult problems2. Neural Network – Attempts to emulate the way the human brain worksFuzzy logic – A mathematical method of handling imprecise or subjective informationArtificial Intelligence (AI)3. Genetic algorithm – An artificial intelligent system that mimics the evolutionary, survival-of-the-fittest process to generate increasingly better solutions to a problem- Shopping bot – Software that will search several retailer websites and provide a comparison of each retailer’s offerings including price and availabilityArtificial Intelligence (AI)4. Intelligent agent – Special-purpose knowledge-based information system that accomplishes specific tasks on behalf of its users 5. Virtual reality - A computer-simulated environment that can be a simulation of the real world or an imaginary worldSECTION 2.2BUSINESS PROCESSESLEARNING OUTCOMESExplain the value of business processes for a company and differentiate between customer-facing and business-facing processesDemonstrate the value of business process modeling and compare As-Is and To-Be modelsDifferentiate between business process improvements, streamlining, and reengineeringDescribe business process management and its value to an organizationEVALUATING BUSINESS PROCESSBusinesses gain a competitive edge when they minimize costs and streamline business processesEVALUATING BUSINESS PROCESSCustomer facing process - Results in a product or service that is received by an organization’s external customerBusiness facing process - Invisible to the external customer but essential to the effective management of the businessEVALUATING BUSINESS PROCESSThe Order-to-Delivery ProcessMODELS: MEASURING PERFORMANCEBusiness process modeling (or mapping) - The activity of creating a detailed flow chart or process map of a work process showing its inputs, tasks, and activities, in a structured sequenceBusiness process model - A graphic description of a process, showing the sequence of process tasks, which is developed for a specificAs-Is process model To-Be process model MODELS: MEASURING PERFORMANCEMODELS: MEASURING PERFORMANCEMODELS: MEASURING PERFORMANCEMODELS: MEASURING PERFORMANCEMODELS: MEASURING PERFORMANCESUPPORT: CHANGING BUSINESS PROCESSES WITH MISWorkflow – Includes the tasks, activities, and responsibilities required to execute each step in a business processSUPPORT: CHANGING BUSINESS PROCESSES WITH MISSUPPORT: CHANGING BUSINESS PROCESSES WITH MISSUPPORT: CHANGING BUSINESS PROCESSES WITH MISTypes of change an organization can achieve, along with the magnitudes of change and the potential business benefitIMPROVING OPERATIONAL BUSINESS PROCESSES - AUTOMATIONCustomers are demanding better products and servicesBusiness process improvement – Attempts to understand and measure the current process and make performance improvements accordinglyAutomation – The process of computerizing manual tasksIMPROVING OPERATIONAL BUSINESS PROCESSES - AUTOMATIONSteps in Business Process ImprovementIMPROVING MANAGERIAL BUSINESS PROCESSES - STREAMLININGStreamlining – Improves business process efficiencies by simplifying or eliminating unnecessary stepsBottleneck – Occur when resources reach full capacity and cannot handle any additional demandsRedundancy – Occurs when a task or activity is unnecessarily repeatedIMPROVING STRATEGIC BUSINESS PROCESSES - REENGINEERINGBusiness process reengineering (BPR) - Analysis and redesign of workflow within and between enterprisesIMPROVING STRATEGIC BUSINESS PROCESSES - REENGINEERINGA company can improve the way it travels the road by moving from foot to horse and then horse to carBPR looks at taking a different path, such as an airplane which ignore the road completelyIMPROVING STRATEGIC BUSINESS PROCESSES - REENGINEERINGProgressive Insurance Mobile Claims ProcessTHE FUTURE: BUSINESS PROCESS MANAGEMENTBusiness process management (BPM) – Focuses on evaluating and improving processes that include both person-to-person workflow and system-to-system communicationsLEARNING OUTCOME REVIEWNow that you have finished the chapter please review the learning outcomes in your text