The document provides information on management and management information systems. It defines management as the process of coordinating work activities so that they are completed efficiently and effectively with and through other people. It also discusses the key components of an information system including hardware, software, data, people, and procedures. Transaction processing systems are described as systems that record and process business transactions like sales, inventory, and accounting.
2. What 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
3. What 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
4. effIcIency and effectIveneSS In
ManageMent
Management Strives For:
Low resource waste (high efficiency)
High goal attainment (high effectiveness)
Resource
Usage
Efficiency (Means)
Goal
Attainment
Effectiveness (Ends)
Low Waste High Attainment
5. Key reSourceS of MIS
InforMatIon
Data
Are raw facts that describe a particular phenomenon
e.g Current Temperature, Price of property, Age of a person etc.
A message which source wants to communicate to the receiver
e.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
7. 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
8. 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
9. 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
11. 1.accuracy
• The information a user receives
has been processed correctly
• Correct information
• Free from errors
• Inaccurate information can lead to
incorrect decisions
15. 5. MeanIngful
Relevant to the user who
receives or uses it.
Unnecessary information must
be eliminated.
16. 6.coSt-effectIve
The cost to produce the information
should be less than the actual cost
of the information.
17. 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
18. 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
19. 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”
20. 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)
21. 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”
23. 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
24. typeS 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
25. typeS 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
26. tranSactIon 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
27. tWo 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
28. exaMple 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.
29. 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 tpS
31. 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
32. 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 SySteM
33. 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 SySteM
35. 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.
37. 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
38. 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
41. executIve 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.
43. What is a human resources information system
(HRIS)?
Manages human resources functions
Employee relationship management (ERM) system
facilitates communication with employees
45. 2-47
A strategic information system is
any information system that uses IT to
help an organization…
StrategIc It
46. 2-48
Cost Leadership
Become low-cost producers
Help suppliers or customers reduce costs
Differentiation Strategy
Differentiate a firm’s products from its competitors’
Focus on a particular segment or niche of market
fIve coMpetItIve StrategIeS
47. 2-49
Innovation Strategy
Unique products, services, or markets
Radical changes to business processes
Growth Strategy
Expand company’s capacity to produce
Expand into global markets
coMpetItIve StrategIeS
48. 2-50
Alliance Strategy
Establish linkages and alliances with customers, suppliers, competitors,
consultants, and other companies
coMpetItIve StrategIeS
49. hoW IS a coMputer defIned?
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
50. What IS hardWare
Hardware is the general term that
is used to describe physical
artifacts of technology.
51. What IS an Input devIce?
Hardware used
to enter data
and instructions
54. What IS an output devIce?
Hardware that
conveys
information
to one or more
people
55. 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
56. coMputer 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
57. 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
58. 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
59. 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
60. Consists of a series
of instructions that
tells the computer
what to do and
how to do it
Consists of a series
of instructions that
tells the computer
what to do and
how to do it
What IS SoftWare?
Also called a
program
Also called a
program
61. coMputer 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.
62. What IS SySteM SoftWare?
Operating System (OS)Operating System (OS)
is a set of programs
that coordinates all
activities among
computer hardware
devices
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
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
63. What IS applIcatIon SoftWare?
Presentation
Graphics
Spreadsheet
Database
Word
Processing
Programs designed to make
users more productive
Create/Produce useful data
64. Word 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.
65. electronIc 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.
66. databaSe SoftWaredatabaSe SoftWare
Allows the user to enter, retrieve, and update data in an organized and efficient
manner, with flexible inquiry and reporting capabilities.
67. coMputer SoftWare
What is a programmer?
Someone who develops
application or system
software
Programmer writes
the instructions to
direct the computer to
process data into
information
68. 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
69. 3-71
bIt 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
72. 3-74
Storage 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
73. coMMon 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
No No
75
81. Binary to
Decimal
Technique
Multiply each bit by 2
n
, 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
83
82. Examp
le
1010112 => 1 x 20
= 1
1 x 21
= 2
0 x 22
= 0
1 x 23
= 8
0 x 24
= 0
1 x 25
= 32
4310
Bit “0”
84
84. Octal to
Decimal
Technique
Multiply each bit by 8
n
, 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
86
87. Hexadecimal to
Decimal
Technique
Multiply each bit by 16
n
, 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
89
88. Examp
le
ABC16 => C x 160
= 12 x 1 = 12
B x 161
= 11 x 16 = 176
A x 162
= 10 x 256 = 2560
274810
90
90. Decimal 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.
92
120. 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 XI
Presentation 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
122. 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
124. SOFTWARE 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
126. SOFTWARE 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
127. SYSTEM 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
129. OPERATING 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
131. USER INTERFACE
Part of the operating system that allows you to
communicate with it
Three main types:
Command-driven
Menu-driven
Graphical user interfaces (GUI)
133. RESOURCE 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
134. FILE MANAAGEMENT
Part of the operating system that controls the
creation, deletion, and access of files of data and
programs
136. TASK 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
138. POPULAR 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
139. OTHER 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
140. WEB LANGUAGES
HTML
A page description language that creates hypertext documents for the Web
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
143. Foundation 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
144. CHARACTER
Consists of a single alphabets, numeric or other
symbol.
It is a byte used to represent a particular character.
145. field
Consists of a grouping of related characters.
E.g., person names represent the name field. i.e., last name, first name, state, city, telephone
#
146. RECORD
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
147. FILE
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
148. DATABASE
An integrated collection of logically related data
elements.
It contains all the records
149. Foundation Data Concepts
Employee
Record 1
Employee
Record 2
Employee
Record 3
Employee
Record 4
Name
Field
SS No.
Field
Salary
Field
Name
Field
SS No.
Field
Salary
Field
Name
Field
SS No.
Field
Salary
Field
Name
Field
SS No.
Field
Salary
Field
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 Resource
Database
Payroll File Benefit File
Data Organization StructureData Organization Structure
150. Foundation Data Concepts
Electric Utility Database
Entities:
Customers, Meters, Bills,
Payments, Meter Readings
Relationships:
Bills Sent to Customers
Customers Make Payments
Customers Use Meters
Billing
Meter
Reading
Payment
Processing
Service
Start/Stop
Example: An Electric Utility DatabaseExample: An Electric Utility Database
151. DATABASE STRUCTURES
DBMS packages are designed to use specific data
structures to provide end users with quick; easy
access to information stored in the databases.
152. DATABASE STRUCTURES
Five Major Database StructuresFive Major Database Structures
•Hierarchical Structure
•Network Structure
•Relational Model
•Object-Oriented
•Multidimensional Structure
153. HIERARCHICAL STRUCTURE
One-to-many relationship
Relationship b/w records from a hierarchy structure
all of them are dependent.
Root element
154. NETWORK STRUCTURE
Allow many-to-many relationships among records.
E.g., employee records can be related to more than
one project record & vice versa.
155. RELATIONAL 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 Deptno
Emp 1
Emp 2
Emp 3
Emp 4
Emp 5
Emp 6
Dept A
Dept B
Dept C
Dept A
Dept B
Dept A
Dept B
Dept C
Dept B
158. Object-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 basedWeb based
applicationsapplications
Describing theDescribing the
attributes of anattributes of an
entity, plus theentity, plus the
operations that canoperations that can
be performs upon thebe performs upon the
datadata
SupportsSupports
inheritanceinheritance
161. Database 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
162. Data 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
164. Distributed Database ModelDistributed Database Model
Client PC
Distributed
Databases
on Intranets
and Other
Networks
End User
Databases
Data
Warehouse
Data
Marts
Operational
Databases
of the
Organization
Network
Server
External
Databases
on the
Internet and
Online
Services
166. Web-Based Information SystemWeb-Based Information System
Web
Browser
The Internet
Intranets
Extranets Web
Server
Software
HTML
XML
Web Pages
Image Files
Video Files
Audio Files
Network
Server
Client PCs
Hypermedia
Database
Types of Databases
167. Data Warehouses
Applications Data Marts
Finance
Marketing
Sales
Accounting
Management
Reporting
ERP
Purchasing
CRM
Inveentory
Control
Shipping
Logistics
170. 5-172
Database 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
171. 5-173
Common 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
172. 5-174
Common 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
173. 5-175
Database 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
175. 5-177
Database 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
176. 5-178
Database Interrogation
SQL Queries
Structured, international standard query language found in many DBMS packages
Query form is SELECT…FROM…WHERE…
177. 5-179
Database Interrogation
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
178. 5-180
Database Interrogation
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
180. 5-182
Database 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
181. 5-183
Application 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
183. 6-185
Types of Communications Networks
Primary types of communications networks
Wide Area
Local Area
Virtual Private
Client/Server
Peer-to-peer
184. 6-186
Wide Area Network (WAN)
Telecommunication network that covers a large
geographic area
185. 6-187
Local Area Network (LAN)
Connects computers within a limited physical area,
such as an office, classroom, or building
186. 6-188
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
188. 6-190
Client/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
190. 6-192
Network 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
191. 6-193
Network Computing
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
193. 6-195
Peer-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
194. 6-196
Peer-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
195. 6-197
Central 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
197. 6-199
Digital 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
201. 6-203
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
202. 6-204
Wireless 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
203. 6-205
Wireless Technologies
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
204. 6-206
Wireless Technologies
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
205. 6-207
Wireless Technologies
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
206. 6-208
The 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
207. 6-209
Telecommunications 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
209. 6-211
Inter-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
211. 6-213
Communications 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
212. 6-214
Telecommunications 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
213. 6-215
Network 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
214. 6-216
Network 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
215. 6-217
Network 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
216. 6-218
Network Topologies
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
218. 6-220
Network 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
219. 6-221
Network 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
220. 6-222
OSI 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
222. 6-224
Voice 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
223. 6-225
Bandwidth
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
225. 6-227
Switching 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
226. 6-228
Network 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
228. 7-230
Enterprise 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
229. 7-231
Cross-Functional Systems
Cross the boundaries of traditional business
functions
Used to reengineer and improve vital business processes all across the enterprise
231. 7-233
Enterprise 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
232. 7-234
Enterprise Application Architecture
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
233. 7-235
Enterprise Application Architecture
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
234. 7-236
Enterprise Application Integration
EAI software connects cross-functional systems
Serves as middleware to provide
Data conversion
Communication between systems
Access to system interfaces
235. 7-237
Transaction Processing Systems
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
238. 7-240
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
240. 7-242
Functional Business Systems
A variety of types of information systems
that support the business functions of
Accounting
Finance
Marketing
Operations management
Human resource management
242. 7-244
Marketing 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
244. 7-246
Interactive 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
246. 7-248
Targeted 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
247. 7-249
Sales 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
248. 7-250
Manufacturing Information Systems
Supports the production/operations functions
Includes all activities concerned with planning and control of the processes producing goods
or services
250. 7-252
CIM 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
251. 7-253
CIM 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
252. 7-254
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
254. 7-256
HRM 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
255. 7-257
HRM 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
256. 7-258
Employee 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
257. 7-259
Accounting 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
258. 7-260
Accounting Information Systems
Typically consists of
Order processing
Inventory control
Accounts receivable
Accounts payable
Payroll
General ledger systems
260. 7-262
Financial 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
263. 8-265
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
265. 8-267
Contact 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
266. 8-268
Sales
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
267. 8-269
Marketing 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
268. 8-270
Customer 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
269. 8-271
Retention 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
270. 8-272
Retention 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
272. 8-274
Benefits 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
273. 8-275
CRM 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
274. 8-276
Trends 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
275. 8-277
Trends in CRM
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
276. 8-278
Trends in CRM
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
277. 8-279
Trends in CRM
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
278. 8-280
ERP: The Business Backbone
ERP is a cross-functional enterprise backbone that
integrates and automates processes within
Manufacturing
Logistics
Distribution
Accounting
Finance
Human resources
279. 8-281
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
282. 8-284
Benefits 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
284. 8-286
Causes 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
286. 8-288
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
287. 8-289
Goals 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
288. 8-290
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
290. 8-292
Electronic 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
294. 8-296
Benefits 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
296. 8-298
Benefits 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
303. 9-305
Access 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
304. 9-306
Profiling 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
305. 9-307
Search 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
306. 9-308
Content 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
307. 9-309
Workflow 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
309. 9-311
Event 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
310. 9-312
Collaboration 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
311. 9-313
Electronic 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
312. 9-314
Electronic 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
314. 9-316
Securing 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
316. 9-318
E-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
319. 9-321
Developing 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
320. 9-322
Serving 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
321. 9-323
Managing 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
322. 9-324
B2B 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
323. 9-325
E-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
324. 9-326
E-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
325. 9-327
E-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
327. 9-329
Clicks and Bricks
Success will go to those who can integrate Internet
initiatives with traditional operations
Merging operations has trade-offs
328. 9-330
E-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
329. 9-331
Other 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
330. 9-332
E-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
331. 9-333
E-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?
334. 10-336
Decision 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
335. 10-337
Decision Support Systems
Management Information
Systems
Decision 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
336. 10-338
Decision Support Trends
The emerging class of applications focuses on
Personalized decision support
Modeling
Information retrieval
Data warehousing
What-if scenarios
Reporting
338. 10-340
Decision Support Systems
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
340. 10-342
DSS 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
341. 10-343
Applications 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
342. 10-344
Management 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
343. 10-345
Management 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
345. 10-347
Online 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
346. 10-348
Online 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
348. 10-350
Geographic 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
349. 10-351
Data 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
351. 10-353
Using 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
352. 10-354
Using 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
353. 10-355
Data 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
355. 10-357
Market 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
356. 10-358
Executive 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
357. 10-359
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
358. 10-360
Enterprise 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
362. 10-364
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
363. 10-365
Attributes 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
364. 10-366
Attributes 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
366. 10-368
Cognitive 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
367. 10-369
Robotics
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
368. 10-370
Natural 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
369. 10-371
Latest 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
370. 10-372
Latest 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
371. 10-373
Expert 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
372. 10-374
Components 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
374. 10-376
Methods 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
375. 10-377
Methods 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)
377. 10-379
Expert System Application Categories
Design/Configuration
Computer option installation
Manufacturability studies
Communications networks
Selection/Classification
Material selection
Delinquent account identification
Information classification
Suspect identification
Process Monitoring/Control
378. 10-380
Expert System Application Categories
Process Monitoring/Control
Machine control (including robotics)
Inventory control
Production monitoring
Chemical testing
379. 10-381
Benefits 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
380. 10-382
Limitations 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
381. 10-383
Developing 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
382. 10-384
Developing 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
383. 10-385
Development 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
384. 10-386
Knowledge 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
385. 10-387
Neural 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
386. 10-388
Fuzzy 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
388. 10-390
Genetic 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
389. 10-391
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
390. 10-392
Typical VR Applications
Current applications of virtual reality
Computer-aided design
Medical diagnostics and treatment
Scientific experimentation
Flight simulation
Product demonstrations
Employee training
Entertainment
391. 10-393
Intelligent 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
392. 10-394
User 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
393. 10-395
Information 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