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Decision Support Systems and Business Intelligence Baker Alkhlaifat

This document provides an overview of decision support systems and business intelligence. It defines decision support systems as interactive computer-based systems that help decision-makers solve semi-structured and unstructured problems. Business intelligence is described as an umbrella term combining tools, databases, applications, and methodologies to transform data into decisions. The document also presents frameworks for decision support and business intelligence, outlining their major components and benefits for improving decision-making.

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Baker Khlifat
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0% found this document useful (0 votes)
43 views31 pages

Decision Support Systems and Business Intelligence Baker Alkhlaifat

This document provides an overview of decision support systems and business intelligence. It defines decision support systems as interactive computer-based systems that help decision-makers solve semi-structured and unstructured problems. Business intelligence is described as an umbrella term combining tools, databases, applications, and methodologies to transform data into decisions. The document also presents frameworks for decision support and business intelligence, outlining their major components and benefits for improving decision-making.

Uploaded by

Baker Khlifat
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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You are on page 1/ 31

Chapter 1

DECISION SUPPORT SYSTEMS AND BUSINESS INTELLIGENCE

Baker alkhlaifat

1
Managerial Decision Making
• Decision support systems (DSS)

A conceptual framework for a process of supporting


managerial decision- making, usually by modeling problems
and employing quantitative models for solution analysis

• An interactive computer-based system that helps decision


makers in the solution of semi-structured and unstructured
problems

2
Managerial Decision Making
• The nature of managers’ work
– Interpersonal ( Leader )
– Informational ( Monitor )
– Decisional ( Negotiator )

3
Managerial Decision Making
Business Pressures–Responses–Support Model

4
The Business Environment

• The environment in which organizations operate today is becoming


more and more complex, creating:
 opportunities, and
 problems
Example: globalization

• Business environment factors categories:


markets, consumer demands, technology, and societal…

Organizational Responses
Be Reactive‫علي‬
‫ فاـتــــ‬, Anticipative‫ قـادر على لاــتوقعـ‬, Adaptive
‫متكيف‬,
and Proactive‫اـستباقي‬

5
Managerial Decision Making
• The process of decision making

1. Define the problem (or opportunity)


2. Construct a model that describes the real-world problem
3. Identify possible solutions to the modeled problem and
evaluate the solutions
4. Compare, choose, and recommend a potential solution
to the problem

6
Decision Making as a Component
of Problem Solving

Intelligence

Decision
making Design

Problem
Choice solving

Implementation

Monitoring

7
Computerized Support for Decision Making

• Why use computerized decision support systems

– Speedy computations
– Improved communication and collaboration
– Increased productivity of group members
– Improved data management
– Managing big data warehouses
– Using the Web
– Anywhere, anytime support

8
Computerized Support for Decision Making

• Cognitive limits

The limitations of the human mind related to


processing information

9
Type of Decision-makings
Degree of Structuredness (Simon, 1977)
• Structured (Programmed)
– routine & repetitive, predictable problems
– standard solutions exist

• Unstructured (Nonprogrammed)
– non-routine, unpredictable, “fuzzy” complex problems
– no cut-and-dried solutions

• Semistructured (Programmed + Nonprogrammed)


– non-routine, predictable,
– Require a combination of standard solution procedures
and individual judgement 10
A Decision Support Framework
(by Gory and Scott-Morten, 1971)

11
Simon’s Decision-Making Process

12
• Computer support for structured decisions

1- Management science (MS) or operations


research (OR)
The application of a scientific approach and
mathematical models to the analysis and solution of
managerial decision situations (e.g., problems,
opportunities)

13
An Early Framework for Computerized Decision Support

2- Automated decision systems (ADS)

A business rules-based system that uses intelligence


to recommend solutions to repetitive decisions (such
as pricing)

– A relatively new approach to supporting decision


making
– Applies to highly structures decisions

14
Automated Decision-Making Framework

15
• Computer support for unstructured decisions

– Customized solutions
– intuition and judgment
– Computerized communication and collaboration
technologies
– Knowledge management

16
• Computer support for semistructured problems

– A combination of both standard solution procedures and


human judgment
– Management Science can provide models for the
structured portion
– For the unstructured portion, a DSS can improve the
quality of the information on which the decision is based
by providing a range of alternative solutions along with
their potential impacts

17
The benefits of computerized decision support

– Companies work in an unstable or rapidly changing


economy.
– There are difficulties in tracking the numerous business
operations.
– Competition has increased especially global competition.
– Electronic commerce is changing the ways business is done.
– Existing information systems do not fully support decision
making.

18
The Concept of Decision Support Systems (DSS)

19
Business Intelligence (BI)

• An umbrella term that combines architectures,


tools, databases, applications, and methodologies

• BI helps transform data, to information (and


knowledge), to decisions and finally to action

20
The Evolution of BI Capabilities

21
A Framework for Business Intelligence (BI)

• A BI system has four major components

– a data warehouse, with its source data


– business analytics, a collection of tools for
manipulating, mining, and analyzing the data in
the data warehouse;
– business performance management (BPM) for
monitoring and analyzing performance
– a user interface (e.g., dashboard)

22
A Framework for Business Intelligence (BI)

Data warehouse

• Originally, included historical data that were organized


and summarize, so end users could easily view or
manipulate data and information
• Today, some data warehouses include current data as
well, so they can provide real time decision support

23
A Framework for Business Intelligence (BI)

Business analytics

– Reporting and queries


– Advanced analytics
– Data, text and Web mining and other sophisticated
mathematical and statistical tools

24
A Framework for Business Intelligence (BI)

• The data warehouse is a large repository of well-


organized historical data
• Business analytics are the tools that allow transformation
of data into information and knowledge
• Business performance management (BPM) allows
monitoring, measuring, and comparing key performance
indicators
• User interface (e.g., dashboards) allows access and easy
manipulation of other BI components

25
A Framework for Business Intelligence (BI)

– Styles of BI
1. Report Delivery and Alerting
2. Enterprise Reporting (dashboard, scorecard)
3. Cube Analysis
4. Ad-hoc Query
5. Statistics and Data Mining

26
• Benefits of BI

– Faster, more accurate reporting


– Improved decision making
– Improved customer service
– Increased revenue

27
• Management support systems (MSS)

A system that applies any type of decision support tool or


technique to managerial decision-making

• Work system
A system in which human participants and/or machines perform a
business process using information, technology, and other
resources to produce products and/or services for internal or
external customers
28
Work system
• Nine elements of a work system
1. Business process
2. Participants
3. Information
4. Technology
5. Product and services
6. Customers
7. Infrastructure
8. Environment
9. Strategy

29
Work system
1. Business process. Variations in the process rationale,
sequence of steps, or methods used for performing
particular steps
2. Participants. Better training, better skills, higher levels
of commitment, or better real-time or delayed feedback
3. Information. Better information quality, information
availability, or information presentation
4. Technology. Better data storage and retrieval,
models, algorithms, statistical or graphical capabilities,
or computer interaction
-->

30
Work system
5. Product and services. Better ways to evaluate
potential decisions
6. Customers. Better ways to involve customers in the
decision process and to obtain greater clarity about
their needs
7. Infrastructure. More effective use of shared
infrastructure, which might lead to improvements
8. Environment. Better methods for incorporating
concerns from the surrounding environment
9. Strategy. A fundamentally different operational
strategy for the work system

31

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