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237-L09-6up - Agenda Questions BUS 237 Information Systems...

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BUS 237 1 Lecture 8: Decision Making and Business Intelligence BUS 237 Information Systems in Business BUS 237 Agenda Questions? Decision Making Business Intelligence (BI) Online Transaction Processing (OLTP) Online Analytical Processing (OLAP) Data Warehouse Data Mart BUS 237 2 This Could Happen to You Consider ways in which information systems can improve decision making in DSI From the process perspective IS facilitate competitive strategy by adding value to or reducing the costs of processes From the decision-making perspective IS add value or reduce costs by improving the quality of human decisions BUS 237 3 Learning Objectives BUS 237 4 Q1. What are the challenges managers face in making decisions? Q2. What is OLTP and how does it support decision making? Q3. What are OLAP and the data resource challenge? Q4. What are BI systems and how do they provide competitive advantage? Q5. What are the purposes and components of a Data Warehouse? Q6. What is a Data Mart, and how does it differ from a Data Warehouse? Q7. What are typical Data Mining applications? Q1. What are the challenges managers face in making decisions? For business managers, decision making is a daily occurrence Factors that make business decision making challenging: Uncertainty and complexity Information overload Data quality IS(s) are valuable to the extent they help augment the knowledge of managers about their business environment during decision-making BUS 237 5 Managerial Functions Day-to-day management not very glamorous Traditional perspective defines management as the process of accomplishing organizational goals through planning, execution, and control: Planning refers to the activities involved in defining the goals of the organization and describing how it will accomplish these goals Execution is the process of assigning responsibilities and resources to accomplish a plan Control is the process of monitoring activities to ensure they develop as planned making corrections when necessary These functions include decision making BUS 237 6
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BUS 237 2 Decision Making The act of choosing between alternatives or a commitment to action There can be a loose coupling between a decision and an action May involve both individuals and groups although groups can be a blame diffusions mechanism BUS 237 7 BUS 237 8 Simon’s Rational Decision Making Model Intelligence Gather information from external and internal sources Design Generate alternative decisions Choice Select one of the alternatives Implementation Alternative is put into action BUS 237 9 Rationality vs. Satisficing Rationality a rational decision making process for making logically sound decisions The rational decision makers must always seek the “optimal” means to desired ends Satisficing – a process which searches for “good enough” or “satisfactory” option, rather than an optimum solution Bounded rationality
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