Organisational Information Systems

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Lecture
Organisational Information Systems (Unit 2)
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Different ways in which information can create
value for organisations
Customers and markets
Add value
Organisation A
Organisation B
Reduce cost
Manage risks
Transactions and processes
Market, financial, legal, operational
Organisation C
Create new reality
New products, new services, new business
ideas
(Chaffey and Wood, 2005)
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Information Systems
Support of business operations
Support of managerial decision making
Operations Support Systems
Management Support Systems
Transaction Processing Systems
Process Control Systems
Enterprise Collaboration Systems
Processing business transactions
Control of industrial processes
Team and work group collaboration
Management Information Systems
Decision Support Systems
Executive Information Systems
Pre-specified reporting for managers
Interactive decision support
Information tailored for executives
Operations and management classification of
information systems
(James A OBrien (2004),
Management Information Systems,
Managing information
technology in the business enterprise, 6th
Edition, McGraw-Hill Irwin).
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Advances in IT and telecommunications
Globalisation
Digital firms
Virtual enterprise
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Globalisation
..the increasing integration of economies around
the world, particularly through trade and
financial flows. .. the movement of people
(labour) and knowledge (technology) across
international borders.
(The IMF Staff (2002) at www,imf.org/external/np/e
xr/ib/2000/041200.htm)
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Virtual enterprise
A company that joins with another company
operationally, but not physically, to design and
manufacture a product distributed geographically
and whose work is coordinated through electronic
communications share skills, costs, and access
to one anothers markets
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Digital firms
A firm in which nearly all organisations
significant business relationships with
customers, suppliers, and employees are digitally
enabled and mediated. Core business processes are
accomplished through digital networks
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Digital Firms

• sense and respond to their environments more
  rapidly than traditional firms
• offer extraordinary opportunities for more
  flexible global organisation and management.
• time shifting and space shifting are the norms

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The Emerging Digital Firm
Customers
Factories

• Online marketing
• Online sales
• Built-to-order products
• Customer service
• Sales force automation

• Just-in-time production
• Continuous inventory replenishment
• Production planning

Remote offices and work groups

• Communicate plans and policies
• Group collaboration
• Electronic communication
• Scheduling

Suppliers
Business partners

• Procurement
• Supply chain management

• Joint design
• outsourcing

(Laudon Laudon, 9th Edition, 200612)
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Exercise

• Laudon and Laudon, 10th Edition Read the case
  study on Accenture in Chapter 1, page 9 and do
  the exercises at the end.
• OR
• Laudon and Laudon, 9th Edition Read the case
  study on CEMEX in Chapter 1, page 14, and do the
  exercises at the end.

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Characteristics of organisational problems and
solutions
Bounded-rationality
The rational model
Satisficing
Optimising
Solution
Problem
structured
unstructured
Semi-structured
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(No Transcript)
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Decision Dimensions in an Organisation
Stair and Reynolds
High
Impact on reaching corporate goals
Decision making authority
Problem uniqueness
Need for external data
Number of people and functions affected by
decision
Planning horizon
Low
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Decision Support Systems

• A set of interactive software programs that
  provide managers with data, tools, and models to
  make semistructured and unstructured decisions.

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DSS support management decision making by
integrating

• Company performance data
• Business rules based on decision tables
• Analytical tools and models for forecasting and
  planning

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The structure of DSS
User
DSS
Internal and External databases
(Information Systems, Zwass, p57)
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Decision Models
Summary statistics, trend projections,
hypothesis testing, etc.

• Statistical Models
• Financial and Accounting Models
• Production Models
• Marketing Models
• Human Resource Models

Cash flow, internal rate of return,
other investment analysis
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Examples of Model driven DSS

• Voyage estimating system (Laudon Laudon,
  Chapter 2, pages 54-57
• More examples in Laudon Laudon, Chapter 12,

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1
request
Cargo booking agent
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Confirm/reject
Availability/ minimum price
Cargo size, rate data
CargoProf revenue management system
Cargo availability forecast
Passenger booking agent
Passenger forecast data
(Laudon Laudon, 8th ed., page 351)
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Data driven DSS

• Make use of OLAP and data mining to extract
  useful information.
• With OLAP uses need to have a good idea of what
  information they are looking for.
• OLAP allows data to be viewed from different
  perspectives, i.e. the same data is viewed in
  different ways using multiple dimensions.

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Data driven DSS

• Data mining is more discovery driven.
• Finds hidden patterns and relationships.
• Data mining can yield associations, sequences,
  classifications, clusters, and forecasts.

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Types of Analytical Modelling

• What-if Analysis
• Change selected variables and observe its effect
  on other variables
• Sensitivity Analysis
• Observe how repeated changes to one variable
  affect other variables
• Goal-seeking Analysis (how-can)
• Make repeated changes to selected variables until
  a chosen variable reach a target value
• Optimisation Analysis
• Finding an optimum value for selected variables,
  under a set of given constraints

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Group Decision Support Systems (GDSS)

• Computer-based systems that enhance group
  decision making and improve the flow of
  information among group members.

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GDSS Alternatives
Figure 10.14
Stair Raynolds
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Decision Room
Decision room alternative

• Decision makers are located in the same building
  or geographic area.
• Decision makers are occasional users of the GDSS
  approach.

Stair Raynolds
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Local Decision network
Schultheis Sumner
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GDSS Alternatives

• Teleconferencing alternative

-Location of group members is
distant. -Decision frequency is low. -Group
meetings at different locations are tied
together
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Teleconferencing
chairs
terminals
table
video cameras
public screen
Schultheis Sumner
Robert Schulthesis and Mary Sumner
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Wide area decision network
Wide area decision network

• Location of group members is geographically
  remote.
• Decision frequency is high.
• Virtual workgroups
• Groups of workers located around the world
  working on common problems via a GDSS

Stair Raynolds
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The Executive Support System
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The Executive Support System (ESS)

• An IS that is focused on meeting the strategic
  needs of the organisation
• Designed explicitly for the purposes of senior
  management
• Used by senior management without technical
  intermediaries Easy to
  use, easy to learn

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• Use state-of-the-art integrated graphics,
  text, and communication technology

Web browsing, e-mail, groupware tools, DSS and
Expert System capabilities

• Also known as an Executive Information System
  (EIS)

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The Executive Support System (ESS)

• Require a greater proportion of
  information from outside the business

Competitors, government, trade associations,
consultants, etc.

• Are linked with value added business processes

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ESS Support

• defining an overall vision
• strategic planning
• strategic organising and staffing
• strategic control
• crisis management

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Expert Systems

• Knowledge Based Information System (KBIS)
• Expert System (ES)

• A KBIS that uses its knowledge about a specific
  area to act as an expert consultant to the end
  user

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Expert System
USER
Knowledge Base
Fact Fact Realtionship Fact
Realtionship Realtionship
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Expert System Development
THE EXPERT and/or THE KNOWLEDGE ENGINEER
Knowledge Acquisition programme
Components of an Expert System, and the
components involved in building the knowledge
base. (Adapted from OBrien (2004293) and
Oz(2006333))
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Whale Watcherhttp//www.aiinc.ca/demos/whale.ht
ml
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Expert Systems Applications in Business
Chapter 11, Minicase 2, Page 501-502 of Turban
etal. Pages 438-439, Laudon and Laudon
http//www.exsys.com/exsys.html - Case Studies
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Expert Systems Applications in Business
CLUES (Countrywides Loan Underwriting Expert
Systems) Intelligent help desk -
IBM, Microsoft, Compaq CADS
(Consumer Appliance Diagnostic System) - Whirlpool
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Web-based Expert Systems

• Disseminating knowledge and expertise
• Transferring ESs over the Net to human users and
  other computerised systems
• Also supports the spread of multimedia-based ES
  (intellimedia systems)

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Laudon Laudon, p47
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Artificial Intelligence
Robotics Applications
Cognitive Science Applications
Natural Interface Applications
Natural languages Speech recognition
Multisensory interfaces Virtual reality
Expert systems Learning systems Fuzzy
Logic Genetic Algorithms Neural
Networks Intelligent Agents
Visual perception Tactility Dexterity
Locomotion Navigation
The major application areas of AI (OBrien,
2002223)
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Intelligent Support Systems

• Systems that augment a managers intelligence and
  expertise
• Expert Systems (ES)
• Artificial intelligence
• Natural Language processing
• Neural networks
• Fuzzy Logic
• Intelligent agents