Turban, Aronson, Liang

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Management Support SystemsAn Overview
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Learning Objectives

• Understand how management uses computer
  technologies.
• Learn basic concepts of decision-making.
• Understand decision support systems.
• Recognize different types of decision support
  systems used in the workplace.
• Determine which type of decision support system
  is applicable in specific situations.
• Learn what role the Web has played in the
  development of these systems.

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Opening Vignette Casino Harrahs The Problem

• Gaming is highly competitive and profitable.
• Early 90s gambling on riverboats
• 1990-97 casinos tripled.
• In the past star treatment for high rollers,
  free drink for slot m/c players.
• End of 80s Slot m/cs surpassed table games, 25
  million players
• Loyal slot plaers is the key to profitability!

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Opening Vignette The Solution

• Player-tracking system
• 30 of customers who spend b/w 100-500 account
  for 80 of total revenue, almost 100 of profits.
• Total rewards program
• Magnetic cards to capture info on How long they
  play, how much they spend, games preferred,
  winning ratios...
• Incentives based on money inserted, not won!,
  free meals, rooms, shows
• Electronically linked clubs

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Opening Vignette The Solution

• Magnetic card readers read customer ID., send a
  personalized greeting
• Electronic gaming m/cs capture transaction data
  and send to mainframe
• Onsite transaction system store all casino,
  hotel and dining transaction data
• National data warehouse links computer system
  and customer data to a server that tallies
  customer history and rewards.
• Predictive analysis software predict customer
  profile
• Web site keeps customers informed, connected
  entertained

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Harrahs Decision Support System

• Transaction Processing System (TPS)
• Data Warehouse
• Data Mining or Business Intelligence
• Regression analysis, neural networks, cluster
  analysis, optimization techniques
• Customer Relationship Management (CRM)
• Decision Support System

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Resulting decisions Some examples

• Defn of the perfect player
• 62 year old woman who lives in 30 min. Kansas
  city, Missouri and playes dollar video pocker!
• Customers who live far away receive discounts in
  meal, hotel, transportation
• Close living customers get food, entertainment,
  cash incentives
• Tight expiration days
• Design new campaigns according to estimated
  response rates, return on investment

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1.2 Managers and Decision Making

• Airlines,
• Retail organizations
• Banks
• Service Companies all use these methods...
• To run effective business in a competitive
  environment, real time, targeted, computerized
  DSS is essential

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Factors Affecting Decision-Making

• Complexity of the systems is increasing, so there
  are more alternative courses of action to choose
  from.
• With new technologies and faster communication,
  the amount of available data is huge.
• Time limitations are getting very strict thus
  the cost of an erronous decision is high.
• Due to several factors like political
  destabilization or globalization, environmental
  uncertainty is increasing.

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1.3 Managerial Decision Making and IS

• Productivity The ratio of outputs to inputs that
  measures the degree of success of an organization
  and its individual parts
• Management Support Systems increase the
  productivity of managerial decision making in a
  complex and uncertain environment by
• evaluating numerous alternatives
• in a very short time.
• Thus, better decisions are made with lower costs
  of error.

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Decision Support Systems

• Computer-based systems that
• collect information from various sources,
• assist in the organization and analysis of the
  data,
• facilitate the evaluation of the alternatives by
  the use of specific models,
• provide a good user interface through which users
  can easily navigate and interact.

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What do Decision Support Systems Offer?

• Quick computations at a lower cost
• Group collaboration and communication
• Increased productivity
• Access to multiple databases and warehouses
• Ability to analyze multiple alternatives and
  apply risk management
• Enterprise resource management and empowerment
• Tools to obtain and maintain competitive
  advantage which is based on price, timeliness,
  quality, customization and support.
• Overcome cognitive limits in processing and
  storage

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Cognitive Limits

• The human mind has limited processing and storage
  capabilities.
• Any single person is therefore limited in their
  decision making abilities.
• Collaboration with others allows for a wider
  range of possible answers, but will often be
  faced with communications problems.
• Computers improve the coordination of these
  activities.
• This knowledge sharing is enhanced through the
  use of GSS, KMS, and EIS.
• What is the role of web here?

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Management Support Systems

• Not Repetitive, unstructured problems
• Specialized heuristics
• No regular reports
• System makes decisions

• Repetitive, structured problems
• Linear logic
• Regular reports
• Low support of decision

MIS (TPS)
ES
EIS GSS KMS
DSS
Structured processes are routine, repetitive
problems w/ standard solution methods Unstructured
processes are fuzzy, complex problems w/o
cut-and-dried solution methods. Decision making
process has three phases Intellegence
Searching for conditions that call for
decisions Design Inventing, developing and
analyzing possible courses of action. Choice
Selecting a course of action from those available
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Management Support Systems Technologies (Tools)

• DSS
• MS/OR Techniques
• Business Analytics
• Data Mining
• Data Warehouse
• Business Intelligence
• OLAP
• CASE tools
• GSS

• EIS/EIP
• ERM/ERP
• CRM
• SCM
• KMS/KMP
• ES
• ANN
• Intelligent Agents
• E-commerce DSS

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Components of a DSS

• Database Management System (DBMS)
• Collect data from various resources
• Organize data
• Provide user interface to access data
• Model base Management System
• Keep track of models
• Provides run control for the models
• Provides data in the format required as a model
  input
• Provides format of the model output
• Provides sensitivity analysis after the model is
  run
• Provides the decision maker, the ability to
  question the assumptions of the model
• User Interface
• Provides input screens by which users request
  data and models
• Provides output screens where the results are
  shown
• Message Management System
• Provide the features of web environment for data
  collection, modeling
• Provide group support for decision making
• Provides integration with other MSSs.

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Management Science/Operations Research

• Adopts systematic approach
• Define problem
• Classify into standard category
• Construct mathematical model
• Evaluate alternative solutions
• Select solution

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MSS as an umbrella term

• Used to describe any computerized system that
  supports decision making.
• Ex In an organization MSS encompasses
• KMS for personnel,
• DSS for marketing and accounting,
• SCM
• Several expert systems for diagnostics

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Group Support Systems

• Getting people at one place is expensive and time
  consuming
• Time limitation to give the decision
• Traditional meetings last long
• Systems that provide interaction and
  communication between people with the aid of IT
  are called
• collaborative computing systems,
• groupware systems, electronic systems, or simply
  GSS
• Videoconferencing, audioconferencing, electronic
  brainstorming, voting, document sharing, etc..

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Enterprise Information Systems

• Evolved from Executive Information Systems
  combined with Web technologies
• EIPs view information across entire organizations
• Provide rapid access to detailed information
  through drill-down.
• Provide user-friendly interfaces through portals.
• Identifies opportunities and threats

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Enterprise Information Systems

• Specialized systems include ERM/ERP, CRM, and SCM
• Provides timely and effective corporate level
  tracking and control.
• Filter, compress, and track critical data and
  information.
• What is the relation b/w ERP, CRM, SCM?

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Knowledge Management Systems

• Do not reinvent the wheel each time!
• Knowledge that is organized and stored in a
  repository for use by an organization
• Can be used to solve similar or identical
  problems in the future
• ROIs as high as a factor of 25 within one to two
  years
• Web technologies feature prominantly
• Provides access to knowledge repository, a
  textual database

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Issues in Knowledge Management Systems

• Where to find knowledge
• How to classify it
• How to ensure its quality
• How to store it
• How to maintain it
• How to use it
• Motivate people to contribute their knowledge
• People who leave the organization take their
  knowledge with them

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Expert Systems

• Decison makers ask for expert opinions.
• Attempts to mimic human experts problem solving
• Uses technologies that apply reasoning
  methodologies in a specific domain
• Examples include
• Artificial Intelligence Systems
• Artificial Neural Networks (neural computing)
• Genetic Algorithms
• Fuzzy Logic
• Intelligent Agents
• Most ES software is implemented on the web tools
  (java applets), installed on web servers and use
  web browsers for interfaces. Ex Corvid Exsys

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Expert Systems

• Expertise is transferred from expert to computer
• The knowledge is stored in the computer
• Users run the computer whenever advice is needed
• The ES asks for facts, make inferences, arrive at
  a conclusion like a human consultant
• May explain the logic behind the advice

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Methodologies of ES Artificial Neural Networks

• In the absence of explicit data, ANN recall
  similar experiences, learn from them in a
  computerized system.
• Uses pattern recognition approach, i.e., learns
  patterns in data presented during training and
  can apply it to new cases, predict the future
  behaviors of systems, people, markets, etc.
• Ex Detecting unusual credit card expenditures

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Methodologies of ES

• Genetic algorithms mimic the process of
  evolution and search for an extremely good
  solution by survival of the fittest rule
• Ex Max. Advertising profit at tv stations
• Fuzzy logic assist decision makers in solving
  problems with imprecise statements of parameters,
  approaches the problems the way people do.
• Intelligent agents learn what you want to do,
  take over some tasks like travel agents, real
  estate agents

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Hybrid Support Systems

• Integration of different computer system tools to
  resolve problems
• Tools perform different tasks, but support each
  other
• Together, produce more sophisticated answers
• Work together to produce smarter answers
• Ex United Sugars Corporation (DSS in action
  1.11)

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Emerging Technologies

• Grid computing
• Improved GUIs
• Model-driven architectures with code reuse
• M-based and L-based wireless computing
• Intelligent agents
• Genetic algorithms
• Heuristics and new problem-solving techniques