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