Assalamualaikum ....

CHAPTER 9 : ENABLING THE ORGANIZATION ( DECISION MAKING )

Learning outcomes

9.1 Define the systems organizations use to make decisions and gain cimpetitive advantages.

9.2 Describe the three quantitative models typically used by decision support systems.

9.3 Describe the relationship between digital dash-boards and executive information systems.

9.4 List and describe four types of artificial intelligence systems.

                                     MODEL

A model is a simplified representation or abstraction of reality.

-Models can calculate risks, understand uncertainly , change variable, and manipulate time.

- Decision-making information systems work by building models out of organization information to lend insight into important business issues and opportunities.

Each system uses different models to assist in decision making, problem solving, and opportunity capturing. This system includes:

-Transaction Processing System.

-Decision Support Systems.

-Executive Information Systems.

·                                 Transaction Processing Systems

The structure of a typical organization is similar to a pyramid. Organizational activities occur at different levels of the pyramid. People in the organization have unique information needs and thus require various sets of IT tools.

- Online transaction processing is the manipulation of information to create business intelligence in support of strategic decision making.

·                                 Decision Support System

A decision support system (DSS) models information to support managers and business professionals during the decision making process.

Three quantitative models are typically used by DSSs:

-Sensitivity analysis is the study of the impact that changes in one (or more) parts of the model have on other parts of the model.

-What-if analysis check the impact of change in an assumption on the proposed solution.

- Goal -seeking analysis finds the inputs necessary to achieve a goal such as a desired level of output.

·                                 Executive Information Systems

-Consolidation involves the aggregation of information and features simple rollups to complex groupings of interrelated information.

-Drill-down enables users to get details, and details of details, of information viewing monthly, weekly, daily, or even hourly information represents drill down capability.

-Slide-and-dice is the ability to look at information from different perspectives.

+DIGITAL DASHBOARDS

A common feature of EIA is digital dashboard. Digital dashboards integrate information from multiple components and tailor the information to individual preferences. Digital dashboards commonly use indicators to help executives quickly identify the status of the key information or critical success factors.

- Digital dashboards, whether basic or comprehensive, deliver results quickly.

- EIS systems such as digital dashboards, allow executives to move beyond reporting to using information to directly impact business performance.

- Digital Dashboards help executives react to information as it becomes available and make decision, solve problems, and change strategies daily instead of monthly.

Artificial Intelligence(AI)

Executive information systems are starting to take advantage of artificial intelligence to help executives make strategic decisions.

Phili Lumish said that competing in the internet arena is competing with the entire world rather than a store down the block or a few miles away.

- Intelligent Systems are various commercial applications of artificial intelligence. --

- Artificial intelligence (AI) simulates human intelligence such as ability to reason and learn.

AI systems dramatically increase the speed and consistency of decision making, solve problems with incomplete information, and solve complicated issues that cannot be solved by conventional computing. There are many categories of AI systems:

-Expert System

-Neural Networks

-Genetic Algorithms

-Intelligent agents

+ Expert system are computerized advisory program that imitate the reasoning processes of experts in solving difficult problems.

+A neural Network, also called an artificial neural network, is a category of AI that attempts to emulate the way the human brain works.

- Fuzzy logic: It is an artificial method of handing imprecise or subjective information.

+A genetic algorithms is an artificial intelligence system that mimic the evolutionary, survival-of-the-fittest process to generate increasingly better solutions to a problem.

+ Intelligent agents is a special-purpose knowledge-based information system that accomplished specific task as on behalf of its users. A shopping both is simple example of an intelligent agent.

- Shopping bot is the software that will search several retailer websites and provide a comparison of each retailer's offering including price and availability.

Multi-Agent Systems and Agent Modeling

By observing the ecosystem like ant or bee colonies, artificial intelligence scientists can use hardware and software models that incorporate insect characteristics and behavior to:

- Learn how people-based system behave

- predict how they will behave under a given set of circumstances

- improve human system to make them more efficient and effective.

This concept of learning from ecosystems and adapting their characteristics to human and organizational situations is called biomimicry.

+ Data Mining

- Data miming system sift instantly through the information to uncover patterns and relationships that would elude an army of human research.

- Data-mining software typically includes many forms of AI such us networks and expert system.

Assalamualaikum

CHAPTER 8 : ACCESSING ORGANIZATIONAL INFORMATION ( DATA WAREHOUSE)

Learning outcomes

·         8.1 Describe the roles and purposes of data warehouses and data marts in an organization.

·         8.2 Compare the multidimensional nature of data warehouses (and data mats) with the two-dimensional nature of databases.

·         8.3 Identify the importance of ensuring the cleanliness of information throughout an organization.

·         8.4 Explain the relationship between business intelligence and a data warehouse.

Accessing Organizational Information

The company also uses data warehouse information to perform the following:

·         Base labor budgets on actual number or guests served per hour.

·         Develop promotional sale item analysis to help avoid losses from overstocking or understocking inventory.

·         Determine theoretical and actual costs of food and the use of ingredients.

                                    History of Data Warehousing

Operational systems typically include accounting, order entry, customer service, and sales and are not appropriate for business analysis for the following reasons:

·         Information from other operational applications is not included.

·         Operational systems are not integrated, or not available in one place.

·         Operational information is mainly current—does not include the history that is required to make good decisions.

·         Operational information frequently has quality issues —the information needs to be cleansed

·         Without information history, it is difficult to tell how and why things change over time.

·         Operational systems are not designed for analysis and decision support.

Data Ware house Fundamentals

A data warehouse is a logical collection of information—gathered from many different operational databases—that supports business analysis activities and decision-making tasks.

Extraction, transformation, and loading (ETL), which is a process that extracts information form internal and external databases, transforms the information using a common set of enterprise definitions, and loads the information into a data warehouse.

 MULTIDIMENSIONAL ANALYSIS AND DATA MINING

A cube is the common term for the representation of multidimensional information.

Data mining is the process of analyzing data to extract information not offered by the raw data alone.

Date-mining tools use a variety of techniques to find patterns and relationships in large volumes of information and infer rules from them that predict future behavior and guide decision making.

                                              INFORMATION CLEANSING OR SCRUBBING

Information cleansing or scrubbing is a process that weeds out and fixes or discards inconsistent, incorrect, or incomplete information.

Business Intelligence

Business intelligence (BI) refers to applications and technologies that are used to gather, provide access to, and analyze data and information to support decision-making efforts.

A certain school of thought draws parallels between the challenges in business and those of war, specifically:

·         Collecting information.

·         Discerning patterns and meaning in the information.

·         Responding to the resultant information.

ENABLING BUSINESS INTELLIGENCE

Technology – the most significant enabler of business intelligence.

People – Understanding the role of people in BI allows organizations to systematically create insight and turn these insights into actions.

Culture – A key responsibility of executives is to shape and manage corporate culture.

ASSALAMUALAIKUM..

CHAPTER 7 : STORING ORGANIZATIONAL INFORMATION (DATABASE)

Learning outcomes

·         7.1 Define the fundamental concepts of the relational database model.

·         7.2 Evaluate the advantages of the relational database model.

·         7.3 Compare relational integrity constraints and business-critical integrity constraints.

·         7.4 Describe the benefits of a data-driven website.

·         7.5 Describe the two primary methods for integrating information across multiple databases.

                             Storing Organizational Information

Organizational information is stored in a database.

 

                                            Relational Database Fundamentals

A database maintains information about various types of objects (inventory), events (transactions), people (employees), and places (warehouses).

In a hierarchical database model, information is organized into a tree-like structure that allows repeating information using parent/child relationships in such a way that it cannot have too many relationships.

The network database model is a flexible way of representing objects and their relationships.

The relational database model is a type of database that stored information in the form of logically related two-dimensional tables.

 

ENTITIES AND ATTRIBUTES

An entity in the relational database model is a person , place, thing, transaction, or event about which information is stored.

 KEYS AND RELATIONSHIPS

A primary key is a field (or group of fields) that uniquely identifies a given entity in a table.

A foreign key in the relational database model is a primary key of one table that appears as an attribute in another table and acts to provide a logical relationship between the two tables.

 

                                 Relational Database Advantages

From a business perspective, database information offers many advantages, including:

·         Increased flexibility.

·         Increased scalability and performance.

·         Reduced information redundancy.

·         Increased information integrity (quality).

·         Increased information security.

INCREASED FLEXIBILITY

The physical view of information deals with the physical storage of information on a storage device such as a hard disk.

The logical view of information focuses on how users logically access information to meet their particular business needs.

           INCREASED SCALABILITY AND PERFORMANCE

Scalability refers to how well a system can adapt to increased demands.

Performance measures how quickly a system performs a certain process or transaction.

 

          REDUCED INFORMATION REDUNDANCY

Redundancy is the duplication of information, or storing the same information in multiple places.

 

          INCREASED INFORMATION INTEGRITY (QUALITY)

Information integrity is a measure of the quality of information.

Within a database environment, integrity constraints are rules that help ensure the quality of information.

There are two types of integrity constraints: (1) relational integrity constraints and (2) business-critical integrity constraints.

Relational integrity constraints are rules that enforce basic and fundamental information-based constraints.

Business-critical integrity constraints enforce business rules vital to an organization’s success and often require more insight and knowledge than relational integrity constraints.

 

          INCREASED INFORMATION SECURITY

Information is an organizational asset and must be protected.

Database offer several security features including :

• password - provides authentication of the user
• Access level - determines who has access to the different types of information.
• Access control - determine types of user access,such as read-only access.

 

                                   Database Management Systems

A database management system (DBMS) is software through which users and application programs interact with a database.

 

DATA-DRIVEN WEBSITES

A data-driven website is an interactive website kept constantly updated and relevant to the needs of its customers through the use of a database.

 DATA-DRIVEN BUSINESS INTELLIGENCE

Companies can gain business intelligence by viewing the data accessed and analyzed from their website.

 

                            Integrating Information among Multiple Databases

An integration allows separate systems to communicate directly with each other.

Without integrations, an organization will (1) spend considerable time entering the same information in multiple systems and (2) suffer from the low quality and inconsistency typically embedded in redundant information.

A forward integration takes information entered into a given system an sends it automatically to all downstream systems and processes.

A backward integration takes information entered into a given system and sends it automatically to all upstream systems and processes.

 

ASSALAMUALAIKUM.............

CHAPTER 6 : VALUING ORGANIZATIONAL INFORMATION

Learning Outcomes

6.1 Describe the broad levels, formats, and granularities of information.

6.2 Differentiate between transactional and analytical information.

6.3 List, describe, and provide an example of each of the five characteristics of high quality information.

6.4 Assess the impact of low quality information on an organization and the benefits of high quality information on an organization.

                                    Organizational Information

Organizational Information: Companies use the tool within an enterprise information portal (EIP) to search corporate information for answers to customer questions and to fulfill sales orders.

Information granularity refers to the extent of detail within the information (fine and detailed or coarse and abstract).

The value of Transactional and Analytical Information

Transactional information encompasses all of the information contained within a single business process or unit of work, and its primary purpose is to support the performing of daily operational tasks.

Analytical information encompasses all organizational information, and its primary purpose is to support the performing of managerial analysis tasks.

                                              The Value of Timely Information

Real-time information means immediate, up-to-date information.

Real-time systems provide real-time information in response to query requests.

                                              The Value of Quality Information

The four primary sources of low quality information are:

1.       Online customers intentionally enter inaccurate information to protect their privacy.

2.       Different systems have different information entry standards and formats.

3.       Call center operators enter abbreviated or erroneous information by accident or to save time.

4.       Third-party and external information contains inconsistencies, inaccuracies, and error.

Understanding the costs of poor information

Bad information can cause serious business ramifications such as:

·         Inability to accurately track customers, which directly affects strategic initiatives such as CRM and SCM.

·         Difficulty identifying the organization’s most valuable customers.

·         Inability to identify selling opportunities and wasted revenue from marketing to nonexisting customers and nondeliverable mail.

·         Difficulty tracking revenue because of inaccurate invoices.

·         Inability to build strong relationships with customers—which increases buyer power.

Assalamualaikum .........

CHAPTER 5 : ORGANIZATIONAL STRUCTURES THAT SUPPORT STRATEGIC INITIATIVES

Learning outcomes

5.1 Compare the responsibilities of a chief information officer (CIO), chief technology officer (CTO), chief privacy officer (CPO), chief security officer (CSO), and chief knowledge officer (CKO).

5.2 Explain the gap between IT people and business people and the primary reason this gap exists.

5.3 Define the relationship between security and ethics.

                                       Organizational Structures

Employees across the organization must work closely together to develop strategic initiatives that create competitive advantages. Understanding the basic structure of a typical IT department including titles, roles, and responsibilities will help an organization build a cohesive enterprise wide team.

IT Roles and Responsibilities

• The chief information officer (CIO) is responsible for

1. overseeing all uses of information technology
2. ensuring the strategic alignment of IT wigh business goals and objectives

Broad functions of a CIO include:

1. Manager-- ensure the delivery of all IT projects, on time and within budget.
2. Leader--ensure the strategic vision of IT is inline with the strategic vision of the organization.
3. Communicator--advocate and communicate the IT strategy by building and maintaining strong executive relationships.

 

• The chief technology officer (FTO) is responsible for ensuring the throughput, speed, accuracy, availability, and reliability of an organization's information technology.
• The chief security officer (CSO) is responsible for ensuring the security of IT systems and developing strategies and IT safeguards against attacks from gackers and viruses.
• The chief privacy officer (CPO) is responsible for ensuring the ethical and legal use of information within an organization.
• The chief knowledge officer (CKO) is responsible for collecting,  maintaining, and distributing the organization's knowledge.

                    The Gap between Business Personnel and IT Personnel

• Business personnel possess expertise in functional areas such as marketing , accounting, and sales.
•    IT personnel have the technological expertise.
•    This typically causes a communications gap between the business personnel and IT personnel.
•    Business personnel must seek to increase their understanding of IT
•    IT personnel must seek to increase their understanding of the business.
•    It is the responsibility of the CIO to ensure effective communication between business personnel and    IT personnel

Organizational Fundamentals---Ethics and Security

         Ethics and security are two fundamental building blocks that organizations must base their businesses on.

 

 

Ethics

Technology poses new challenges for our ethics---the principles and standards that guide our behavior toward other people.

Privacy is the right to be left alone when you want to be, to have control over your own personal possessions, and to not be obersved without your consent.

 

 

Protection Intellectual Assets

1. Organizational information is intellectual capital.
2. The Health Insurance Portability and Accountability Act (HIPAA) protectes the privacy and security of personal health records and has the potential to impact every business in the United States.
3. Information security is a broad term encompassing the protection of information form accidental of intentional misuse by persons inside or outside an organization. 

 

 

 

Assalamualaikum ...

CHAPTER 4: MEASURING THE SUCCESS OF STRATEGIC INITIATIVES

A few questions banking executives recently raised regarding their IT systems include:

• Is the internal IT operation performing satisfactorily?
• Should the company outsource some or all of the IT operations?
• How is the outsourcing company performing?
• What are the risk factors to consider in an IT project?
• What questions should be asked to ensure an IT project proposal is realistic?
• What are the characteristics of a healthy project?
• Which factors are most critical to measure to ensre the project achieves success?

• Key performance indicator - measures that are tied to business drivers.
• Metrics are detailed measure that feed KPIs.
• Performance metrics fall into the nebulous area of business intelligence that is neither technology, nor business centered , but requires input from both IT and business professionals.

Efficiency and Effectiveness

Efficiency IT metrics measure the performance of the IT system itself including throughput, speed, and availability.

Effectiveness IT metrics measure the impact IT has on business processes and activities including customer satisfaction, conversion rates, and sell-through increases.

Benchmarking--Baseline Metrics

Benchmarking is a process of continuously measuring system results, comparing those results to optimal system performance(benchmark values), and identifying steps and procedures to improve system performance.

The Interrelationships of Efficiency and Effectiveness IT Metrics

Efficiency IT metrics

•  Security is an issue for any organization offering products or services over the internet.
• It is inefficient for an organization to implement Internet security , since it slows down processing.

Metrics for Strategic Initiatives

A few of the more common financial ratios include:

• Internal rate of return (IRR) -- the rate at which the net present value of an investment equals zero.
• Return on investment (ROI) -- indicates the earning power of a project and is measured by dividing the benefits of a project by the investment.
• Payback method--number of years to recoup the cost of an initiative based on projected annual net cash flow.
• Break-even analysis--determines the volume of business required to make a profit at the current prices charged for the products or services.

The following metrics will help managers measure and manage their strategic initiatives:

• Website metrics.
• Supply chain management (SCM) metrics.
• Customer relationship management (CRM) metrics.
• Business process reengineering (BPR) metrics.
• Enterprise resource planning (ERP) metric

 BUSINESS PROCESS REENGINEERING (BPR) AND ENTERPRISE RESOURCE PLANNING (ERP) METRICS

The balanced scorecard is a management system, in addition to a measurement system, that enables organizations to clarify their vision and strategy and translate them into action.

The balanced scorecard views the organization from four perspectives,and users should develop metrics, collect data, and analyze their business relative to each of these perspectives:

• The learning and growth perspective.
• The internal business process perspective.
• The customer perspective.
• The financial perspective