Chapter 6: Applying Information Technology -

Managerial Support Systems

Review: Organizational Systems

Transaction Processing Systems Enterprise Resource Planning Systems Data Warehousing Office Automation Groupware Intranets Factory Automation

Managerial Support Systems

Decision Support Systems Data Mining Group Support Systems Geographic Information Systems Executive Information Systems Artificial Intelligence, including Expert

Systems and Neural Networks Virtual Reality

Decision Support Systems

Computer-based system, usually interactive, designed to assist managers in making decisions

Incorporates both data and models, and usually intended to assist in the solution of semi- or unstructured problems

Components of a DSS

Data Management Model Management Dialog Management,

or the User Interface

DSS Examples

Scheduling ambulances and ambulance technicians in Montreal

Evaluating motor-vehicle legislation in the state of Idaho

Media planning for print media (advertising) in India

Police-beat allocation in a California city (also Geographic I.S.)

DSS Examples (continued)

United Airlines’ System Operation Advisor -- helps aircraft controllers deal with aircraft shortage problems arising because of delayed flights or mechanical problems

Planning municipal solid waste management

Scheduling and routing home health care nurses

Data Mining

Employs a variety of techniques (such as neural networks) to search or “mine” for small “nuggets” of information from the vast quantities of data stored in an organization’s data warehouse

Uses of Data Mining

Market segmentation -- identify the common characteristics of customers who buy the same products from your company

Customer churn -- predict which customers are likely to leave your company and go to a competitor

Fraud detection -- identify which transactions are most likely to be fraudulent

Uses of Data Mining (continued)

Direct marketing -- which prospects should be included in a mailing list

Interactive marketing -- predict what each individual accessing a Web site in most likely interested in seeing

Market basket analysis -- understand what products or services are commonly purchased together

Uses of Data Mining (continued)

Trend analysis -- reveal the difference between a typical customer this month versus last month

Identification of patterns/trends -- scrutiny of the data to identify patterns

Group Support Systems

System designed to make group sessions more productive by supporting such group activities as brainstorming, issue structuring, voting, and conflict resolution

A variant of DSS in which the system is designed to support a group

A specialized type of groupware

Motivations for GSS

Increased number of meetings and teams

Many group-based activities are inefficient

GSS Characteristics

Parallel human processing Equal opportunity for participation Anonymity Complete record of meeting Output of one phase leads to next Can more easily apply structure

Geographic Information Systems

A computer-based system designed to collect, store, retrieve, manipulate, and display spatial data

A spatially based DSS Typically a digitized map with other data

linked to the map coordinates

How GIS Works

Two basic ways to represent spatial data:– By rasters

» Grids of equal-sized cells groupedor linked to make lines and shapes

» Values of cells vary» Example: Satellite images, pixels on screen

– By vector» Points, Lines, and Polygons» Approximates curves, can link into networks» Example: Property boundaries, sales territories

A Closer Look: Vectors Geographic data are:

– type of feature » several lines connect to form a road

» polygons start and end at same point

– where it is in reference system » (x,y) for start and end of each line segment

Attribute data are:– descriptive values associated to feature

» name of street segment» number of people in house» average household income for county

Spatial Analysis Organizing features in layers like clear map

overlays allows comparisons:– between features at same place– between same attributes at different places

Can answer questions like:– What is adjacent to this feature?– Where is the closest something to this feature?– What points are contained within this feature?

Can display map features based on attribute values (called Thematic Mapping)

Sources of GIS Data

Geo-referenced data:– #1 Government

» Census Bureau, USGS, NASA, Dept. of Defense

– #2 Create yourself» Digitize from map, Global Positioning System,

Geocode from own databases

– #3 Buy it or download it» Businesses that collect, repackage, aggregate public

and private sources of information

Executive Information Systems

A computer application designed to be used directly by top managers, without the assistance of intermediaries, to provide the executive easy on-line access to current information about the status of the organization and its environment

Now usually made available to most levels of management

EIS continued

Traditionally, an EIS was to support strategicplanners at the “top” of the organization

Today, an EIS may be used to provide statusinformation to all workers who “need to know”

EIS at versus strategic at all apex levels

Characteristics of an EIS

Primarily used for tracking and control Customized to the individual executive

(at least top-level executives) Graphical Easy to use Incorporates both hard and soft data

Artificial Intelligence

The study of how to make computers do things that are presently done better by people

AI Research Areas

Natural languages Robotics Perceptive systems Expert systems Neural networks

Expert Systems

One branch of Artificial Intelligence (AI)

Concerned with building systems that incorporate the decision-making logic of a human expert

Major Pieces of an Expert System

Knowledge base (developed by a knowledge engineer working with the expert or experts)

Inference engine User interface

Obtaining an Expert System

Buy a fully developed system (e.g., Lending Advisor)

Use an artificial intelligence (AI) shell, also called an expert system shell

Have an expert system custom-built by internal or external knowledge engineers

Examples of Expert Systems

MYCIN - diagnose blood diseases (Stanford)

CATS-1 - diagnose mechanical problems in diesel locomotives (GE)

Dipmeter - provide advice when drill bit gets stuck while drilling an oil well

Magic - determine human services benefits (Merced County, CA)

More Examples of Expert Systems

Credit Clearing House - provide information to subscribers about firms in apparel industry (D&B)

MOCA - schedule routine maintenance on American Airlines’ entire fleet

MSE - Market Surveillance Expert - assist in investigating insider trading (American Stock Exchange)

Neural Networks

Named after study of how human nervous system works

Use statistical analysis to recognize patterns from vast amounts of data by a process of adaptive learning

Consist of software that attempts to emulate the processing patterns of the biological brain

Examples of Neural Networks

BankAmerica - neural network evaluates commercial loan applications

American Express - system reads handwriting on credit card slips

State of Wyoming - system reads hand-printed numbers on tax forms

Arco and Texaco - neural network helps pinpoint oil and gas deposits

More Examples of Neural Networks

Speigel uses a neural network to prune its catalog mailing list to eliminate those who are unlikely to order again

The Fidelity Disciplined Equity Fund (Bradford Lewis) uses a neural network to select stocks that are undervalued

Virtual Reality

The use of computer-based systems to create an environment that seems real to one or more sense (usually including sight)

Used to design dashboard and controls of car, simulate a tank battle, and enable pinpoint control of radiation therapy